KWAP makes £175m London mall play

The MYR106 billion Malaysian pension has made its third property foray in London in a joint venture with a local operator.

Kumpulan Wang Persaraan (Diperbadankan) (KWAP), the MYR106 billion (€24 billion; $33 billion) Malaysian pension fund, has completed another purchase in the London property market by taking an 80 percent stake in the Intu Uxbridge, according to an Intu Properties statement.

The seller was local shopping mall owner and operator Intu Properties, which is to retain a 20 percent stake in the 440,000 square foot shopping center and is expected to stay on as the operator on behalf of the joint venture. KWAP paid £175 million (€217 million; $294 million) for its stake in the property, a 2 percent premium to its £213.9 million valuation.

Intu is intending to use the proceeds of KWAP’s investment to repay debt and recycle capital into its £1.2 billion development pipeline. “We are delighted to have entered into this partnership, establishing a relationship with a significant overseas investor and demonstrating the investment demand for prime UK shopping centers,” Intu chief executive David Fischel commented. “We look forward to working with our new partner, KWAP.”

Though this is not KWAP’s first foray into London, it does represent its first investment in a UK shopping mall. Previously, KWAP won the bidding for 88 Wood Street with a $357.2 million bid last January, and in October 2012 the pension bought the 10 Gresham Street office building for £200 million.

Outside of London, KWAP is only known to have invested in Australian real estate. Relatively new to the international property market, KWAP currently has only a 2 percent allocation to real estate.