EPF sells London property to British Land for RM1.14 bil

KUALA LUMPUR (April 15): The Employees Provident Fund (EPF) is disposing of its One Sheldon Square at Paddington Central in London’s West End — its first property disposal in the United Kingdom — to London-listed British Land Co plc for £210 million (RM1.14 billion).

In a statement yesterday, the EPF said it has signed a sale and purchase agreement with real estate investor and manager British Land to effect the disposal of the 9-storey property it acquired in 2010.

“British Land won the bid through an open tender process,” said the EPF.

The property, which comprises 200,000 sq ft of freehold office space, is fully let to Visa Europe Services Inc (VES) until 2022, with a rent review in December 2017.

“Total annual contracted rent is £9.5 million reflecting an average rent of £48.70 per sq ft which is reversionary,” said British Land in a separate statement yesterday.

The announcement yesterday follows an April 10 report quoting EPF chief executive officer Datuk Shahril Ridza Ridzuan (pictured) as saying that the pension fund was ready to divest “one or two” of its properties in the UK to reap the benefits of the massive yield compressions there due to the quantitative easing stimulus introduced by the European Central Bank.

To recap, on Jan 19, 2011, global real estate agent service provider Savills plc had noted that the EPF had purchased the property at £157 million.

Previous reports revealed that the EPF had invested about £565 million in properties in the UK so far, including a 20% stake in the £12 billion redevelopment of the Battersea Power Station in London.

In its announcement of the One Sheldon Square disposal yesterday, the EPF said it continues to diversify its investments across markets, sectors and asset classes to provide optimal and long-term sustainable returns.

To date, it owns significant real estate investments in the UK, Germany, France, Australia and Japan.

In its statement, British Land said the acquisition is in line with its strategy of expanding in London and the southeast of the city, including in and around its existing assets.

“Acquiring One Sheldon Square, which is prominently located at the entrance to Paddington Central, allows us to develop a wider vision for the campus as an attractive mixed-use destination,” British Land said.

Following the acquisition of One Sheldon Square, British Land said it now owns four buildings and 800,000 sq ft of space at Paddington Central.

This article first appeared in The Edge Financial Daily, on April 15, 2015.