PETALING JAYA: Although the latest land deal in Kuala Lumpur’s Bukit Bintang shopping district is the highest in terms of price fetched so far, valuers say it does not represent the current land market in the city’s golden triangle.
Transacted at a premium price of RM210mil, which is equivalent to about RM7,209.80 per sq ft, the 29,127-sq-ft parcel was acquired by Urusharta Cemerlang (KL) Sdn Bhd from CDL Hotels (M) Sdn Bhd, a unit of London-based Millenium & Copthorne Hotels plc.
Millenium & Copthorne is a company controlled by Singaporean billionaire Kwek Leng Beng through his 53% stake in Singapore-listed property and hotel group City Developments Ltd.
Located between Grand Millennium Kuala Lumpur hotel and the Pavilion KL mall, the land was earlier slated for a RM500mil serviced apartment project comprising a 42-storey block to be known as Millennium Residences.
CB Richard Ellis Sdn Bhd executive director Paul Khong said the latest sale “is unexpected and it cannot be construed to represent the entire market.”
“This price has to be read together with the fine prints in the sale and purchase agreement.
“From the face value of the transaction, we note that this is a small parcel of land and there is an element of ‘special purchaser’ in the transaction. The buyer owns the land next door and is therefore willing to pay more as ‘marriage value’ for the plot.
“The quantum of premium given is up to negotiations between the parties. Other details of the sale has not been made available like payment structure, completion date, exit clauses and other special terms,” he told StarBizWeek.
KGV-Lambert Smith Hampton Sdn Bhd director Anthony Chua concurred.
He said although it was by far a record price for a land transaction in the city centre, “but it is unique to this particular piece of land; being the last empty lot in the prime location of Jalan Bukit Bintang.”
“It is acquired by a special purchaser who is willing to pay a premium for it, as the land’s value is tied to the buyer’s existing real estate, Pavilion KL, located adjacent to the land.
“There is synergistic advantage to use the land for the expansion of its Pavilion KL development, and the reason may also to prevent competitors from getting into its market foothold,” Chua added.
Pavilion KL is a privatised project by KL City Hall under its urban redevelopment programme to inject more life and wholesome activities into the city.
Developed by Kuala Lumpur Pavilion Sdn Bhd, a subsidiary of Urusharta Cemerlang Sdn Bhd, the four-part development is located on 12.6 acres at the intersection of Jalan Bukit Bintang and Jalan Raja Chulan.
The valuers agree that land in the golden triangle has become a scarce commodity and prices are set to trend further upwards.
Just about three years ago, land in the vicinity were still priced slightly above RM1000 to less than RM2000 per sq ft, but new highs have been recorded since. (See table)
According to Khong, in the past year, parcels of development land with a minimum size of about an acre in the KLCC, Jalan Sultan Ismail and Bukit Bintang vicinities were traded at RM1,500 to RM2,588 per sq ft (being the purchase of Wisma Angkasa Raya by Sunrise Bhd in 2008).
“Going forward, we believe the land value will breach RM3,000 per sq ft as predicted earlier.
“Generally, land values depend largely on the location or frontage, approved plot ratio, approval or land use status, size of the plot, any physical improvements on the land, requirement for demolition of existing structures, terms and conditions of sale, and ‘special purchaser’ element in the sale,” he said.
Mah Sing Group Bhd group managing director-cum-chief executive Tan Sri Leong Hoy Kum said land values had appreciated by about 10% to 20% over the past one year.
“Besides the new land deal, which has created a lot of buzz, it has been a relatively active market,” he said.
“The fact that prices are trending up show signs of confidence among buyers and sellers, and reflects their views on the positive outlook of the country’s economy.”
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