EPF expects over 10% returns

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THE Employees Provident Fund expects more than a 10% returns from its 20% stake in Britain’s Battersea Power Station redevelopment and considers its involvement in the project as further diversification of its funds into the British property sector. It did not, however, state the time frame as to when it would rake in the returns.

EPF chief executive officer Tan Sri Azlan Zainol said the fund had set aside £1bil (RM4.96bil) to invest in overseas properties in 2010 and thus far has seven properties in Britain. It has another two or three properties in Australia which it indirectly owns by holding 80% of funds which own them.

“Most of these investments are in office buildings. In Britain, our investments are generating an annual global yield of 5.8% to 6%, some higher. We are still looking for properties to invest in to rent out and are considering more of such investments,” he said after a press conference with the international media recently, which formally introduced the Malaysian consortium members of the Battersea project.

“This investment in Battersea is a separate project and a different form of investment in Britain. We will be directly involved in property development. The yield will be higher, and so will the risk, but we will be mitigating those risks.

“The most important feature (with this Battersea project) is our partners S P Setia Bhd and Sime Darby Bhd. I would not have gone into it unless the two of them are in it.

“So we are looking for places with good returns in UK. We have the approval (to invest) 23% of our funds overseas and so far have invested 12%, so we are looking at long-term developments,” he said, adding that EPF is purely a passive investor.

“There will be a demand for it (the Battersea residentials) as every week, British properties are being promoted and marketed in Malaysia and other parts of Asia, particularly in Hong Kong and Singapore,” he said.

On its investments in Britain, Azlan said the fund would continue to purchase buildings for its yield and expected to make a further £400mil (RM1.98bil) to £500mil (RM2.48bil ) investments within the next two years. On investing in other parts of Europe, Azlan said that was one consideration but it is more comfortable investing in Britain.

Azlan said EPF’s other project development was in Singapore with the Guocoland group. “In Malaysia, it is involved in the Rubber Research Institute of Malaysia land in Sg Buloh and we will be focusing on that in greater detail next year,” he said. – The Star