Pilgrims fund allocates RM2b for Aussie, UK investments next year
KUALA LUMPUR: Tabung Haji has a RM2 billion budget to spend on property investments in Australia and the United Kingdom next year, says group managing director and chief executive officer Datuk Johan Abdullah.
In an exclusive interview with the Media Prima group recently, he said the pilgrims fund would allocate 15 per cent of its assets for investment next year, compared with 11 per cent this year.
The Tabung Haji board had approved a RM1 billion allocation for property investments in Australia and another RM1 billion for UK ventures, said Johan.
“For property investments, I plan to increase the allocation and explore all the investment instruments available that can provide Tabung Haji with recurring and sustainable returns.
“I will put some in equities, some in fixed income and some into properties, and reverse the 20 per cent in cash that we have into returns,” he added.
Tabung Haji owns three properties in the UK, two in Australia as well as nine buildings in Saudi Arabia, which are generating rental yields, and other investments in Malaysia.
With current assets worth about RM59.33 billion, Tabung Haji has about RM8.8 billion available for investments.
In May this year, Business Times reported that the pilgrims fund had put up for sale its office building on 10 Queen Street Place in London.
Tabung Haji sold its property on 151 Buckingham Palace Road to Gaw Capital Partners last year and is looking to sell the 10 Queen Street Place building for about £200 million (RM1.17 billion).
When asked on the progress of the second property sale, Johan said Tabung Haji was putting it on hold for now as it could not fetch its targeted price.
“As that property provides good income, I am not desperate to sell. If the price offer cannot meet my least expectation, then I will not do the transaction.
“I mentioned about recurring income, but if there is an offer that we could not resist, like the one for the Buckingham Palace Road property, we will proceed and reinvest into other ventures,” he added.
Tabung Haji also owns Unilever’s headquarters in Leatherhead, Surrey.
Last year, the fund added one more property — the Al-Aqiq Hotel in Medina, Saudi Arabia — to its portfolio while continuing to selectively scan for investment opportunities in overseas markets.
Tabung Haji had also undertaken further development of a building in Putrajaya for the offices of multiple agencies under the Islamic Development Department. It is in its final phase and expected to be occupied this year.
During the year, Tabung Haji also took advantage of the bullish UK property market and favourable exchange rates to complete the sale of the 151 Buckingham Palace Road property.
The group had also completed the refinancing of the 3 Collins Square development in Melbourne, Australia, under an Australiandollar denominated financing — the first fully syariah-compliant facility arrangement of its kind involving a property in the country.
The property was acquired in 2013.
For the financial year ended December 31 2015, Tabung Haji posted a 36 per cent increase in income to RM4.47 billion from RM3.29 billion in 2014.
Its net profit after zakat increased by 19 per cent to RM3.53 billion last year from RM2.98 billion in 2014. Zarina Zakariah and Laili Ismail