Malaysia’s EPF exits London office to Chinese buyer

Hong Kong-based firm Chinese Estates has acquired the West End office 11/12 St James’s Square for £175m.

The Employees Provident Fund (EPF), Malaysia’s largest pension fund, has sold a London office property to Hong Kong-based real estate developer and investment firm Chinese Estates Group for £175 million ($227 million; €208 million).

The West End property 11/12 St James’s Square has around 80,000 square feet of grade A office accommodation arranged over lower ground, ground and 6 upper floors. It is currently multi-let to several tenants, including Blackstone and Marble Bar Asset Management, with an annual rental income of nearly £8 million.

CBRE advised Chinese Estates, while Savills Investment Management sold the property for EPF.

“We are delighted to have acquired 11/12 St James’s Square on behalf of Chinese Estates following a competitive bidding process. It will be a fantastic addition to their portfolio and is another example of the strength of appetite and commitment from overseas capital, particularly from Asia, for prime London real estate,” commented James Rood, senior director, Central London investment, CBRE.

The office building is the third building on the square to be sold this year. This follows the sale of 8 St James’s Square in January for £213 million and separately, the sale of 3 St James’s Square for £135 million last month. All three buildings have been bought by Hong Kong based investors.

The EPF had RM 731.11 billion ($164.72 billion; €155.61 billion) in total assets under management at the end of 2016, the fund said in a statement in February.

The pension fund has 4.03 percent of this invested in real estate & infrastructure. EPF’s real estate & infrastructure allocation contributed RM 2.49 billion in investment income in 2016, with annual growth of 46.04 percent.