The 3 asset classes PNB is interestedin are — private investment, real estate and public equities

By P PREM KUMAR / Pic by TMR

Permodalan Nasional Bhd (PNB) aims to expand its foreign investment portfolio, from the current 2% of its total asset under management amounting to RM266.5 billion.

PNB chairman Tan Sri Abdul Wahid Omar said the state investment firm intends to increase its presence overseas, “at the right time and value”.

The three asset classes which PNB is interested in are private investment, real estate and public equities, he told a media luncheon yesterday.

He noted that the only stumbling block for PNB to aggressively pursue overseas investments was the weak ringgit compared to the greenback.

“If we estimate a 7% return on overseas investment at the current ringgit level and over time the ringgit rebounds by 5%, my return then is going to be only 2%.

“Our gradual increase in foreign investment is very much on the condition of the ringgit,” said Abdul Wahid.

PNB currently invests in a range of asset classes and has presence in more than 20 major world equity markets.

It has registered asset managers in Singapore, Japan and the UK.

PNB made its first property investment overseas in 2010, through the acquisition of Santos Place, a six-star premium Grade-A 37-storey office building in Brisbane, Australia.

Following the acquisition of Santos Place in Australia, PNB further established its presence globally with the acquisitions of five properties in the UK, all situated in London City.

Meanwhile, Abdul Wahid said the construction of the company’s signature tower Merdeka PNB 118, is currently on track with the sub-structure work for the tower on the former Merdeka Stadium site is now completed.

Physical construction will be more visible next year as works on the iconic tower begin, he said. The tower, once completed in 2021, would be 60% taken by PNB Group of Cos including the current top management, which are housed at Jalan Tun Razak.

The investment firm plans to lease or rent 20% of the 118-storey tower to interested parties, while the remaining 20% will be turned into a hotel.

Abdul Wahid said the challenge ahead for the potential tallest building in the country, would be the occupancy rate once it is opened.

“The challenge obviously is that there is a lot of space for commercial offices now, but it all depends on how we market the iconic product.

“I also believe that in future as Kuala Lumpur is turning into a global city, there will be heavy demand for office space,” he said.

The RM5 billion tower, touted to be the fifth-tallest building in the world upon completion, is being jointly developed by UEM Sunrise Bhd and South Korea’s Samsung C&T Corp.

Formerly known as KL118, the building is owned by PNB Merdeka Ventures Sdn Bhd, a wholly owned subsidiary of PNB.