KUALA LUMPUR: Lembaga Tabung Haji’s two investment holdings subsidiaries only suffered paper losses, the August House was told on Thursday (Feb 27).
Deputy Minister in the Prime Minister's Department (Islamic Affairs) Dr Zulkifli Hasan said that these unrealised losses were due to the current devaluation of the property.
Both subsidiaries, LTH Property Holdings 2 and LTH Property Holdings 3 are special purpose vehicles for Tabung Haji's property investment in the United Kingdom which was reported to have suffered over RM400mil in losses.
He said that there were no plans for Tabung Haji to dispose of the properties in the near future until the market value reaches an appropriate level.
“Therefore, the losses recorded due to current devaluation are expected to be temporary,” he said in Parliament in his winding up speech on Feb 27.
He was responding to Datuk Awang Hashim (PN-Pendang) who asked about the significant losses, which Tabung Haji suffered from 2021 till 2023.
The Auditor-General's Report showed that the combined losses of both subsidiaries for 2023 was RM465.18 mil, this was an increase from losses of RM97.55 mil in 2022 and RM22.25 mil in 2021.
Zulkifli said that property valuations are conducted for accounting purposes at the end of each year and any changes in property values are recorded in the financial statements.
He said that increasingly high inflation rates in the UK had caused a decrease in property values.
However, he noted that interest rates in the UK have been reduced three times since August 2024, from 5.25% to 4.5% in February 2025.
“Tabung Haji expects this reduction in interest rates to have a positive impact on property values in the UK, which will help LTH 2 and LTH 3 to record a reversal or gradual recovery of losses in line with the increase in property values as early as 2025,” he said.
He added that before any investment is made by Tabung Haji, whether domestically or internationally, a feasibility study is conducted by certified consultants and advisors.
He also said that both LTH 2 and LTH 3 recorded strong operational profits from rental income according to market rates based on medium- and long-term lease agreements.
“Measures are taken to strengthen performance including diversifying tenants to support stable and sustainable returns for existing investments,” he said.
On Monday (Feb 24), the Auditor-General’s Report said that both Lembaga Tabung Haji’s investment holding subsidiaries, LTH Property Holdings 2 Limited and LTH Property Holdings 3 Limited, suffered losses.
It was due to impairment of investment properties, influenced by current interest rates and inflation in the UK, and this was the third consecutive year that the subsidiaries suffered losses.
