By Sharen Kaur - Published by NST Property, July 21, 2022
sharen@nst.com.my
Lembaga Tabung Haji (TH), a Malaysian state-owned firm that funds pilgrimages to Mecca through Shariah-compliant investments, has reportedly paid £247.5 million (about RM1.3 billion) or £1,370 per square foot of net leasable area for Great Minster, a six-story office building in London.
The 179,869-square-metre structure is located at 33 Horseferry Road in West End, London, in a strategic location amidst the most significant business district.
Based on reports, TH purchased the building from Sinarmas Land Ltd, a Singapore-listed real estate firm controlled by Indonesia's Widjaja family.
According to Sinar Mas' filing with the Singapore Exchange, the buyer of the freehold property is a wholly-owned subsidiary of TH.
Sinar Mas said that the sale of the building allows the company to realise an attractive rate of return on investment.
The Singapore company purchased the building in June 2017 for £188.6 million, representing a 31 per cent profit once the transaction is completed in early August this year.
TH group managing director and chief executive officer Datuk Seri Amrin Awaluddin said the acquisition was completed on July 12, 2022.
He said the purchase of the freehold building was in addition to TH's property investment portfolio in the UK since 2012, and that it has strengthened its investment in the international real estate market.
TH invests about 11 per cent of its RM88 billion funds in real estate locally and abroad.
Amrin said the ownership of the Great Minster building will give good returns to TH in the long term, considering its long-term rental contract.
"The maintenance cost is fully borne by the tenants, with increasing annual rental rate and stable market value. This is also in line with TH's investment objective to diversify the types of investment in terms of assets and locations," he said in a statement today.
Great Minster is a government office building that houses the UK's Department for Transport under a long-term lease that expires in 2033.
Amrin said that TH is aggressively exploring opportunities to increase its investments in the property sector overseas in an effort to diversify its investment portfolio.
"This has been identified as the best move to generate competitive and consistent returns for its 8.5 million depositors. London is still an attractive financial hub with a lot of business opportunities currently and in the long term, hence, this is encouraging for the property sector," he said.
Nevertheless, he said TH will remain cautious in making any property investment to ensure it generates immediate returns to cover the cost of the annual Haj pilgrimage and profit distribution, besides providing a long-term return that is stable and safe for the continuity of the fund and its depositors.
Great Minster is a government office building that houses the UK's Department of Transport under a long-term lease that expires in 2033.
Meanwhile, Amrin said that TH is aggressively exploring opportunities to increase its investments in the property sector overseas in an effort to diversify its investment portfolio.
"This has been identified as the best move to generate competitive and consistent returns for its 8.5 million depositors. London is still an attractive financial hub with a lot of business opportunities currently and in the long term, hence, this is encouraging for the property sector," he said.
Nonetheless, he said that TH will be cautious in making any property investment to ensure that it generates immediate returns to cover the cost of the annual Haj pilgrimage and profit distribution, in addition to providing a long-term return that is stable and safe for the fund's and depositors' continuity.
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