EPF in talks to divest 1–2 properties in UK

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KUALA LUMPUR (Apr 10): The Employees Provident Fund (EPF) is in discussions to divest one or two of its property assets in the UK.

"It is probably a good time for us to start looking at disposal of one or two assets," said EPF CEO Datuk Shahril Ridza Ridzuan after presenting the EPF 2014 annual report today.

He said the potential disposals will enable the retirement fund to reap benefits of the massive yield compressions in the UK property market due to the quantitative easing stimulus introduced by the European Central Bank.

Shahril, however, kept mum on details of the potential disposals and did not identify the discussing parties involved. But he said the process will adopt a tender basis.

"We will make the appropriate announcements when the time comes," he said.

On EPF's joint venture (JV) with Eco World Development Group Bhd and Uda Holdings Bhd to develop the Bukit Bintang City Centre, Shahril expects the development order for the project to be submitted and approved this year.

Once approved, he said the JV can proceed with constructions works next year.

For this year, Shahril said the EPF will make minimal changes to its overall investment strategy as the fund operates on a long-term investing basis.

The fund will continue to focus on a well diversified portfolio of investments across multiple asset classes. These include fixed income assets, equities, real estate and infrastructure among others.

But he said the fund will continue to be "overweight" on the equity market similar to last year, as part of its overall investment strategy.

"In 2014, we were fairly overweight on equities, which did very well for us. I think for 2015 we are still likely to be overweight for equities given the poor outlook for fixed income yield," he said.

Moving forward, Shahril maintained his stand that the EPF will adopt a "shareholder perspective" in any future mergers in the banking and financial sector.

"We will adopt a shareholder perspective on whether there is any value creation for shareholders. But the decision is up to the management and the board," he said.

In 2014, the EPF's total dividend credited to members' account jumped 17.5% to an all-time high of RM36.66 billion from RM31.2 billion in 2013.

Its growth of investment assets averaged between 10% and 11% annually, outstripping the growth of the local capital market.

The EPF's total annual contributions amounted to RM57.17 billion last year, with a net inflow of RM23.39 billion after accounting for total amount withdrawn of RM33.78 billion.