EPF looking to invest in Aussie, S’porean properties
KUALA LUMPUR: The Employees Provident Fund (EPF) is looking to invest in the Australian and Singaporean property markets, its CEO Tan Sri Azlan Zainol said.
“My approach is to drive EPF's investments in property and banking,'' Azlan told StarBiz in a recent interview.
He said the fund's strategy was to diversify its income not just from investments but also business. “Otherwise, how do we manage to pay dividends that are above the fixed deposit rates?'' he asked.
Last year, the EPF declared a dividend of 5.8% compared with 5.5% the previous year. The country's inflation rate at the end of last year was 2.1%.
“Our property investment in the transportation hub, KL Sentral, by Malaysian Resources Corp Bhd (MRCB) has done well. with a 20% payout policy,'' he said.
Meantime in New York, deputy CEO Shahril Ridza Ridzuan told Bloomberg that the fund planned to buy more assets in Europe and Asia, and hold 20% of its assets in non-ringgit currencies compared with 11% currently.
“Its goals are to preserve capital and target returns of about 200 basis points above inflation,'' Shahril was quoted as saying late Tuesday.
So far, the pension fund, which has allocated 1bil for its British property purchases, has invested in three UK properties with yields of between 5.6% and 5.7%.
The EPF has spent 486mil on its three UK properties, which are:
> 40 Portman Square near Oxford Street, bought for 181mil and carrying a yield of 5.55%;
> One Sheldon Square Paddington Central (157mil, yield 5.75%); and
> l 225,000 sq ft office building Whtefriars, central London (148mil, yield 5.75%).
Recent reports said it was buying about 3,000 acres of Rubber Research Institute Malaysia land in Sungai Buloh for close to RM3bil for mixed property development with focus on affordable housing.
The EPF aims to increase the contribution from property from 2% to 5%.
Under its gross investment income, property and miscellaneous income last year rose to RM103.18mil from RM87.85mil the previous year. Total gross investment last year reached RM24.06bil from RM17.22bil previously.
About 68% of EPF's money is in fixed income securities and property, while the rest is in equities.
In fixed income, it invests mostly in Malaysia because of potential currency fluctuations, said Bloomberg, adding that the ringgit had gained 6% against the dollar over the past 12 months.
However, according to Shahril, the fund is diversifying its fixed income portfolio with some select foreign investments.
The EPF is the largest investor with a 44.6% stake in RHB Capital Bhd, the country's fourth largest banking group. RHB Capital paid a dividend of 21.38% for the last financial year.
By YAP LENG KUEN
lengkuen@thestar.com.my
“My approach is to drive EPF's investments in property and banking,'' Azlan told StarBiz in a recent interview.
He said the fund's strategy was to diversify its income not just from investments but also business. “Otherwise, how do we manage to pay dividends that are above the fixed deposit rates?'' he asked.
Last year, the EPF declared a dividend of 5.8% compared with 5.5% the previous year. The country's inflation rate at the end of last year was 2.1%.
Meantime in New York, deputy CEO Shahril Ridza Ridzuan told Bloomberg that the fund planned to buy more assets in Europe and Asia, and hold 20% of its assets in non-ringgit currencies compared with 11% currently.
“Its goals are to preserve capital and target returns of about 200 basis points above inflation,'' Shahril was quoted as saying late Tuesday.
So far, the pension fund, which has allocated 1bil for its British property purchases, has invested in three UK properties with yields of between 5.6% and 5.7%.
The EPF has spent 486mil on its three UK properties, which are:
> 40 Portman Square near Oxford Street, bought for 181mil and carrying a yield of 5.55%;
> One Sheldon Square Paddington Central (157mil, yield 5.75%); and
> l 225,000 sq ft office building Whtefriars, central London (148mil, yield 5.75%).
Recent reports said it was buying about 3,000 acres of Rubber Research Institute Malaysia land in Sungai Buloh for close to RM3bil for mixed property development with focus on affordable housing.
The EPF aims to increase the contribution from property from 2% to 5%.
Under its gross investment income, property and miscellaneous income last year rose to RM103.18mil from RM87.85mil the previous year. Total gross investment last year reached RM24.06bil from RM17.22bil previously.
About 68% of EPF's money is in fixed income securities and property, while the rest is in equities.
In fixed income, it invests mostly in Malaysia because of potential currency fluctuations, said Bloomberg, adding that the ringgit had gained 6% against the dollar over the past 12 months.
However, according to Shahril, the fund is diversifying its fixed income portfolio with some select foreign investments.
The EPF is the largest investor with a 44.6% stake in RHB Capital Bhd, the country's fourth largest banking group. RHB Capital paid a dividend of 21.38% for the last financial year.
By YAP LENG KUEN
lengkuen@thestar.com.my
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