Record UK deal hints at strains in Malaysia's property sector

Kuala Lumpur

A SURPRISING proposal by two of Malaysia's largest state-owned investment funds to pay a record £1.6 billion (S$2.9 billion) to take over a development at London's famed Battersea power station is stirring talk of a financial bailout and raising questions over the health of the property sector back home.

Late last week, Permodalan Nasional Bhd (PNB) and the Employees' Provident Fund (EPF), state-owned entities with large stakes in dozens of listed entities in Malaysia, announced plans to acquire the "commercial assets" of the ongoing Battersea development from a troika led by conglomerate Sime Darby and aggressive property developer SP Setia.