KUALA LUMPUR (Aug 9): Germany-based Union Investment Real Estate is confident of doubling its investments in Malaysia, from the current RM440 million.
"We are optimistic about the medium term growth prospect of Malaysia's real estate, which explains our investment in Malaysia," managing director Ulrich Dischler told reporters here on Thursday.
In 2007, Union Investment entered the Malaysian market by acquiring Cap Square Tower in Kuala Lumpur from Bandar Raya Development Bhd for RM440 million.
"Cap Square Tower is an important investment for the fund, as it is in line with our strategy to grow our Asian portfolio, through yield accretive acquisitions in stable markets which are supported by sound economic fundamentals," he said, adding that the building currently enjoyed 40 per cent occupancy.
He said Union Investment was also confident of earning a green building index certificate next year for its Cap Square Tower.
Dischler said Malaysia's sound economic fundamentals augured well for its real estate sector and that it was one of the fastest growing economies in Asia.
"Although real estate investment in Malaysia is still at its infancy stage, this presents more opportunities as well as options for value-addition.
"As a core investor with a long term investment horizon, we are confident that Cap Square Tower will benefit from the positive rental reversion in tandem with the progressive growth of the Malaysian economy," he said.
On its plans in Malaysia, he said: "Our strategy is to acquire existing buildings. We are tracking the market and currently there is no specific project that we are negotiating. Of course it also depends on the price expectation."
Dischler said over the next five years, Union Investment also intends to invest up to Euro one billion in the Asian growth markets on behalf of its global real estate funds.
"We remain optimistic about the medium to long term growth prospects and we anticipate rentals and prices to pick up again in 2013-2014.
"Our confidence stems from Asia's robust economic fundamentals, which includes its youthful demographic, dynamic workforce, rising income levels, growing consumer base, sound public finances, sizeable external reserves and healthy corporate balance sheets.
"This would underpin the healthy and sustainable growth of rentals and capital values across Asia's real estate markets," he added. — Bernama
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