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The Malaysian Ringgit has never been strong, currently 6.39661 MYR to 1 GDP, but with fears of the currency further weakening the Malaysian government has told institutions to sell overseas assets and reinvest the capital in Malaysia in a bid to improve the economy and strengthen the currency. Last year Asian buyers would have snapped up these opportunities but they have been struggling recently due to a dramatic weakening of the Chinese Yen and stock exchange. This has had a knock on affect for the rest of Asia and unfortunately is having adverse effects on the London investment market. The Asian buyers who are left in the market are getting cold feet and pulling out of both residential and commercial schemes which in turn is causing Malaysian investors to panic and put their buildings up for sale. The market has become oversaturated with £200 million plus assets for sale with too few potential buyers – in a bid to fulfil the Malaysian government’s recent demands.
Temasek, an investment company owned by the government of Singapore has pulled out of a joint venture purchase of the Blue Fin Building costing £465 million. The last letting in the building was completed in July 2014, this was for just under 8,000 sqft at a rent of £55 psf. The Blue Fin Building is just one example of multiple deals which have stalled or not completed the past year and is causing real concern among investors in London.
Amongst some of the largest Malaysian overseas investors, Kumpulan Wang Amanah Pencen (KWAP) has put up for sale 88 Wood Street EC2 comprising of 247,000 sqft of office space which they purchased in 2013 for £215 million (yield of 5.8%). Ollie Salter a surveyor at Morgan Pryce believes, “they need to achieve a balance of fulfilling the government’s wishes and doing what is right for the fund.” Other investors such as EPF have put up assets for sale.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.