Malaysian retirement fund buys 3rd asset in Australia for $205 million

Wan Kamaruzaman Wan Ahmad.

PETALING JAYA: Retirement Fund Inc (also known as Kumpulan Wang Persaraan Diperbadankan or KWAP), which manages RM98bil worth of assets, has acquired its third commercial property in Australia for A$172mil (S$205 million).

The country's second-largest pension fund is taking advantage of the favourable currency exchange rate to increase its investment overseas for higher returns.

The ringgit strengthened 5.2 per cent year-to-date against the Australian dollar at 3.02 yesterday.

KWAP had yet to issue an official statement as at press time, but a spokesperson confirmed that the fund had completed the deal to acquire a 26-storey office building in Brisbane.

An Australian daily reported yesterday that the 25,111-sq-m Grade A tower changed hands at a 9 per cent yield in a deal that was handled by CBRE.

KWAP was looking to increase its investment in properties overseas and was eyeing opportunities in Australia and the United States, chief executive officer Wan Kamaruzaman Wan Ahmad told StarBiz last week.

He, however, ruled out further buys in the United Kingdom as the currency exchange rate was not in his favour.

The fund made its first property acquisition abroad in 2010 and currently owns two properties in London and one each in Melbourne and Sydney, both in Australia.

"What we are trying to focus on right now is allocating our assets to be more sustainable and looking at a long-term strategy to beef up our investment portfolio," he said.

Out of KWAP's substantial assets, 55 per cent is invested in fixed income, 35 per cent in the stock market and 10 per cent in property, private equity and infrastructure.

The latest transaction by KWAP has pushed Malaysian property investment in Australia to A$2.8 billion since 2010.