KUALA LUMPUR: The Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB) said the potential acquisition of Phase 2 of the Battersea Power Station (BPS) project was purely based on commercial consideration.
This was in line with the funds’ diversification plan to actively expand their real estate and infrastructure assets globally, the EPF and PNB said in a joint statement yesterday.
“The EPF has been actively expanding its real estate and infrastructure assets both domestically and overseas to deliver long-term sustainable income for the benefit of its members.
“The proposed transaction is also in line with PNB’s Strategic STRIVE-15 Plan which outlines a long-term strategy of portfolio diversification and judicious expansion into global assets,” they noted.
The EPF and PNB on Thursday announced that they had signed a Heads of Terms (HoT) with Battersea Phase 2 Holding Co Ltd to initiate preliminary negotiations to buy commercial assets in Phase 2 of the BPS development for an estimated £1.61 billion.
“The EPF and PNB are now contemplating to acquire ownership in Phase 2 of the project, known as The Power Station building, which is the anchor project consisting mainly of retail and office spaces.
“The EPF and PNB view this as a strategic opportunity to secure ownership of a unique and iconic real estate asset in a global city, which will be able to deliver a sustainable income stream into the future to meet their respective income needs,” they said.
The EPF and PNB dismissed claims that there was government intervention, saying the decision was purely an investment consideration initiated together with the BPS board and management team.
“The EPF and PNB are steadfast and committed to uphold the trust of the two institutions’ members and unit holders respectively, as well as the Malaysian public, and any inferences that investment decisions are made for any other reason than for the benefit of the people are completely false and malicious,” they said.
Phase 2 of the project is expected to be completed by late 2020 and has also been pre-let to anchor tenants such as Apple, one of the world’s leading technology companies, for a 500,000 sq ft tenancy – in one of London’s largest ever office prelets.
The funds said this bodes well for potential investors, as it is seen as a precursor to an exciting future for the Battersea Power Station development.
“The purchase price, which is still subject to further due diligence, has been structured based on a completed and tenanted basis, to provide attractive long term yield for the investors,” they added.
The EPF is part of the consortium of developers, consisting of SP Setia Bhd and Sime Darby Property Bhd in the greater BPS development which began in 2012, with the entire development spanning Phase 1 to Phase 7.
The EPF directly owns 20 per cent of the development and had said the reorganisation exercise will not affect its shareholdings in the existing overall development.
PNB, on the other hand, holds majority stakes in SP Setia and Sime Darby Property, which collectively own 80 per cent equity in the BPS development.
“Phase 1 of the project, which comprises largely residential units, is already completed with 100 per cent take-up rate and has been successfully handed over to the residential buyers in the last quarter of 2017, while the residential component of Phase 2 is almost 100 per cent taken up.
The funds said the initial capital invested into the project by the consortium of developers has also been reinvested into developing subsequent phases.