By IZZAT RATNA / Pic By BLOOMBERG

Commercial property values in the UK have recorded strong recovery while the property boom in Australia continues, opening up doors for local fund management firms to cash in on their investments.

Prices of commercial properties, especially in London, are hitting new highs — 16 months after the UK had voted to leave the European Union (EU). The UK’s decision to divorce the EU had created uncertainties over London’s bubbling commercial property.

However, investors from China and Hong Kong have been returning to the capital of the UK and snapping up commercial properties. According to the Financial Times, quoting figures from CBRE Group Inc, Asians purchased two-thirds of the total £4.8 billion (RM26.64 billion) invested in London offices between July and September.

London has always been a darling for Asian property investors, including Malaysian government-linked investment companies (GLICs).

Knight Frank Malaysia MD Sarkunan Subramaniam said the global market has responded favourably to commercial asset classes, offices and hotels.

“Now, it is a good time for GLICs to dispose of their commercial assets overseas, especially within the central business district, which are seeing rising prices.

“Five to six years ago, the pricing for this type of asset class was still competitive compared to now. Any disposal now can reward investors with a higher return,” he told The Malaysian Reserve.

Permodalan Nasional Bhd is considering selling two properties in Britain in what would be its first divestment of foreign real estate assets.

The commercial properties at 1 Silk Street and 90 High Holborn in London had matured, having been purchased in 2012 for a reported £350 million and £140 million respectively.

The Federal Land Development Authority (Felda) is selling the Grand Plaza Serviced Apartments in London.

The Employees Provident Fund sold a London office property to Hong Kong-based Chinese Estates Holdings Ltd for £175 million this year.

Property investments have been key to GLICs’ revenues. But, with the current financial year to end in less than three months and profits waning from GLICs, property sales abroad could boost earnings and ensure favourable dividends.

“Every GLIC must evaluate whether it is the right time to sell or buy. Everything is largely dependent on the timing,” he added.