JLL Malaysia: KWAP buys KL’s Menara AIA Cap Square

PETALING JAYA (Dec 16): Malaysia’s second largest pension fund Kumpulan Wang Persaraan (Diperbadankan) (KWAP) has bought Kuala Lumpur’s Menara AIA Cap Square from Germany’s Union Investment Real Estate GmbH (UIRE).

According to JLL Malaysia, who advised UIRE on the deal, this is the largest office building sale in Malaysia for 2016.

The 41-storey Grade A office building comprises 601,796 sq ft of net lettable space and current tenants include insurance and financial companies such as AIA and Citibank.

“We’re delighted with this result for both the buyer and the seller. This is a high profile property in a desirable location with an enviable occupancy rate and top quality tenants. With this purchase, KWAP is demonstrating its confidence in the Kuala Lumpur office market and we expect there will be increased interest in other Grade A office properties as a result, from both domestic and international investors,” said Y Y Lau, managing director, JLL Malaysia.

Earlier this year, KWAP sold its 18-storey office building, 88 Wood Street in the City of London, for US$345 million (RM1.54 billion), which it bought in 2013 for US$275 million. Since then, the fund has been looking for investment opportunities in Malaysia, particularly in the capital. 

Menara AIA Cap Square will be the second property KWAP owns in Kuala Lumpur, having purchased the 39-storey office block Integra Tower for RM1.06 billion in April 2015.

“This sale exemplifies that investors believe in Kuala Lumpur’s strong fundamentals in the short and medium term as Malaysia’s prime office investment location and that it remains competitive on a regional basis for attractive rental growth and returns,” said Nick Charlton, associate sirector, JLL Malaysia.

This high profile office deal follows on from the sale of Singapore’s Asia Square Tower 1, a world-class commercial development in the city’s Marina Bay business and financial district. JLL brokered the sale to Qatar Investment Authority on behalf of seller BlackRock in June.