PETALING JAYA: The Employees Provident Fund (EPF) is making a new investment in properties overseas after a year-long hiatus, this time by taking a significant stake in a Malaysian-owned development project in Australia.
The provident fund is paying A$154mil for a 49% stake in Yarra Park City Pty Ltd (YPC), which holds the rights to a five-acre mixed-use development worth over RM9bil in Melbourne.
The Melbourne project also marked the fund’s second development venture overseas after the Battersea project in London.
In a statement, EPF chief executive officer (CEO) Datuk Shahril Ridza Ridzuan said the Melbourne Square project met EPF’s long-term objectives and would be a good addition to its overseas portfolio.
“The increasing demand for residential property in Melbourne will enable the EPF to generate returns for its members,” he pointed out.
In the statement, OSK said the Melbourne Square development would transform a former carpark bounded by the Westgate Freeway and Kavanagh, Balston and Power Streets in Southbank into a dynamic mixed-use community and retail centre, with an expected gross development value (GDV) of A$2.8bil (RM9.4bil).
OSK CEO and group managing director Tan Sri Ong Leong Huat said the Melbourne Square project was one of the last sizeable prime land available for an iconic development in the city.
“We are delighted to partner the EPF on this exciting project,” he said.
“The project will mark OSK’s maiden foray into Melbourne, whose growing population and vibrant property market have received much interest from international developers in recent years, including several established Malaysian developers,” he pointed out.
The project comprises four towers of residential apartments, an office tower, a hotel/serviced apartment tower and multiple street-level retail lots across the various components.
It will be developed in five stages over eight to 10 years.
Slated for residential use, the towers have a capacity of over 1,000 apartments, with a GDV of over A$900mil.
In a filing with Bursa Malaysia, OSK said its unit PJD had entered into a share sale agreement with the EPF to dispose of its entire stake in Yarra Development Holdings (Australia) Sdn Bhd (Yarra Holdings), which is a wholly-owned subsidiary of PJD.
Subsequently, OSK said its indirect subsidiary, Yarra Australia Development Pty Ltd, had entered into a share subscription agreement with YPC to subscribe to 110.49 million shares or 49% of the entire enlarged paid-up share capital of YPC.
“The disposal and YPC subscription are expected to increase the net earnings of the OSK group by A$38.2mil (RM129mil) and a foreign-exchange gain on the total investment in YPC of RM49.2mil, which was previously recorded as foreign-exchange reserve; or a total increase of 12.86 sen per share for the financial year ending Dec 31, 2017,” said OSK.
It said Yarra Holdings had applied for a credit facility of up to A$175mil from CIMB Bank Bhd, OCBC Bank (M) Bhd and RHB Bank Bhd. YPC has appointed a list of top-tier consultants for the project, including Cox Architects to design the master plan and Stage One of the project, Carr Design for interior design services, Sinclair Brook for project management and CBRE as the sales agent for Stage One, which has just been launched this month.