Malaysians scramble for funds

Malaysia’s government fund for Muslim pilgrims, Lembaga Tabung Haji, is looking to recoup a further £220m from the sale of London property. The fund is suffering from dwindling reserves amid concerns it may not be able to pay dividends to its depositors. It is being pressed by the state to repatriate funds and has exposure to 1MDB, the country’s investment fund, which is currently the subject of an investigation into whether cash has been siphoned off the fund by officials. Tabung Haji, which invests savings for muslims to travel to Mecca, has appointed Savills to sell 10 Queen Street Place, EC4. The price for the 221,198 sq ft UK headquarters of law firm King & Wood Mallesons reflects a yield of 4.3%. However, rents in the building are highly reversionary and the yield is expected to rise to more than 5% following a rent review in 2018. It is let on a lease expiring in 2025. Tabung Haji is likely to make a substantial profit from its investment in 10 Queen Street Place. The office block was its debut purchase in London in 2012, when it paid Irish investor Jaguar Capital £165m.     It is a move similar to that made by the fund last October when it sold 151 Buckingham Palace Road, SW1, to Gaw Capital. It bought the 480,000 sq ft building in 2013 for £205m and sold at close to £250m.     The sale is set to be the latest in a string of disposals by Malaysian funds which, aside from pressure to dispose of assets, are able to exit comfortably having entered the market largely towards the bottom of the cycle. Malaysia’s London  sell-off Asset Seller Value (£m) Notes 10 Queen Street Place, EC4 Tabung Haji 250 On the market 88 Wood Street, EC2 KWAP 270 Being bought by Shaw Foundation 65 Fleet Street, EC4 EPF 170 On the market 151 Buckingham Palace Road, SW1 Tabung Haji 250 Bought by Gaw Capital last October 1 Sheldon Square, W2 EPF/KWAP 210 Bought by British Land last April • To send feedback e-mail david.hatcher@estatesgazette.com or tweet @hatcherdavid or @estatesgazette