PNB disposes of 90 High Holborn in London

Firm is open to any opportunities to sell its remaining assets, if there’s a right offer

By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

Permodalan Nasional Bhd (PNB) has completed the disposal of its 90 High Holborn property in London and has not discounted sales of other assets, as the country’s largest fund manager strengthens its footprint in the UK.

PNB, among the largest Malaysian property owners in the UK, would be impacted as London’s divorce from the European Union draws nearer and thousands of jobs could leave the financial capital.

Group chairman Tan Sri Abdul Wahid Omar, who confirmed the sale of the Holborn property, said while PNB is comfortable with its presence in London, it is open to any opportunities to sell its remaining assets, if there’s a right offer.

“If people come up to us with great offers, that is something we will consider,” he said at a briefing in Kuala Lumpur yesterday.

The sale of 90 High Holborn late Wednesday evening ended months of speculation that PNB was looking to cash in on its London office unit for a reported amount of £190 million (RM1.03 billion).

The government-linked fund management firm bought the property for £140 million in 2012, along with the Milton & Shire House (£350 million) and One Exchange Square (£410 million) in the years that followed. It also has stakes in Battersea and owns Aviation House.

Abdul Wahid, however, did not reveal Holborn’s transaction value and the purchaser.

He said the deal generated both yields and cash will likely go into the fund’s multibillion dollar investment in the Battersea Power Station project.

“We are still within the confidentiality period with the purchaser. Once that is sorted out, we will be able to announce the deal in greater detail.

“But for now, we can confirm that the transaction was completed last night,” he said yesterday.

A report published by UK-based Acadata Ltd on March 12 showed that London house prices were falling at the fastest pace since recession hit nearly a decade ago, with the capital’s most expensive areas seeing the biggest decline.

Average prices fell to £593,396 in January to mark the highest decline since August 2009.

PNB has not downplayed the possibility of expanding its global assets portfolio elsewhere. The fund held a commercial building in Brisbane, Australia, for seven years before selling it off for A$370 million (RM1.09 billion) to Singapore’s sovereign wealth fund, GIC Pte Ltd.

Group CEO Datuk Abdul Rahman Ahmad said the company recently recruited a core member from the Boston Consulting Group to lead its property investment arm and seek opportunities across borders as well as in Malaysia.

He also noted that PNB had an 18.6% of assets in cash to deploy capital for further investments.

Meanwhile, due diligence on its purchase of the Power Station building in the Battersea project was still ongoing with the share purchase agreement expected to be signed in mid- 2018, Abdul Rahman said.

It was announced in January that PNB and the Employees Provident Fund (EPF) entered into a heads of terms agreement to purchase RM8.8 billion worth of commercial assets in the second phase of the Battersea Power Station from SP Setia Bhd.

The redevelopment project is being undertaken by Battersea Project Holding Co Ltd, of which SP Setia holds a 40% stake, alongside fellow property developer Sime Darby Property Bhd, who also has a 40% stake. The EPF holds the remaining 20% interest in the joint venture.

The proposed asset purchases are aimed at reorganising the ownership of the commercial portion of the Battersea project under PNB and the EPF, who are long-term investors in the redevelopment, while Sime Darby Property and SP Setia are principally property developers.

If successful, the respective shareholdings in Battersea Project Holding Co will remain unchanged. The project is expected to be completed by 2020 and has been pre-let to anchor tenants such as Apple Inc.

PNB had earlier declared dividends of 6.25 sen and 6.75 sen for its Amanah Saham Malaysia and Amanah Saham Bumiputera 2 (ASB2) funds respectively. It also announced dividends of 4.80 sen, 5.20 sen and 5.15 sen per unit for its education, health and retirement funds under the Amanah Saham Gemilang umbrella.