KUALA LUMPUR: The Ministry of Finance (MoF) has disclosed that the Employees Provident Fund (EPF), which owns a 20 per cent stake in the UK-Battersea Power Station (BPS), has made a RM24 million provision for the project.
This is in accordance with International Financial Reporting Standard 17 (IFRS 17).
The Ministry revealed this via a written reply to a query from Aminolhuda Hassan on the impact of losses from EPF's investment in the London-based Battersea project, posted on the parliament website.
For the quarter ended June 30, 2024, BPS made an accounting provision of RM120 million for among others, certain lease guarantees provided for 50 Electric Boulevard (Phase 3B), an office building recently completed but not yet fully leased.
This is in compliance with IFRS 17 – Insurance Contracts, an accounting standard that became effective in January 2023.
MOF said that EPF's 20 per cent ownership in Battersea Projects Holding Company Ltd (BPHCL) translates to a RM24 million share of this provision.
"However, the IFRS 17 provision amount is expected to gradually decrease as the occupancy rate of 50 Electric Boulevard increases," MOF wrote.
MOF also pointed out that BPS, which opened in 2022, currently has its office space fully leased, with Apple as the primary tenant.
"The occupancy rate for retail space is now at 95 per cent, showing good progress within two years since its opening. BPS attracted 12 million visitors in 2023," they added.
Battersea Power Station is a RM51 billion project to turn the former industrial brownfield site over a 17 hectare (over eight million sq ft) area into a community of homes, shops, bars, restaurants, cafes, offices and over seven hectare of public space. The overall project is divided into eight phases.
The Battersea Power Station site is owned by a consortium of Permodalan Nasional Bhd, Sime Darby Property Bhd, S P Setia Bhd and the Employees' Provident Fund.