“Magna Prima had an ambitious plan to build a 60-storey twin towers on the land, with a combined gross development value of RM1.8bil. One of the towers is to comprise a mixture of serviced apartments, hotel and offices, while the other tower is expected to be a Grade A office building with Green Building Index elements.”
KWAP eyeing Magna land?
PETALING JAYA: Fresh from acquiring its first property in Malaysia, the Retirement Fund Inc (KWAP) is believed to be eyeing Magna Prima Bhd’s Lai Meng School land in Jalan Ampang.
According to sources, the deal came about as Magna Prima was also looking to divest the freehold property measuring 1.06ha that is situated close to the iconic Petronas twin towers.
Property consultants said that land values in the Kuala Lumpur city centre (KLCC) area were a bit soft and cost between RM3,200 and RM3,500 per sq ft (psf). But Magna Prima was looking at the higher end of the band.
“The valuation range puts the piece of land at between RM360mil to RM400mil. But Magna Prima has gone to the market looking at the higher end of the range ,” a source said.
Magna Prima acquired the land five years ago for RM148.2mil cash, or around RM1,350 per sq ft. But the acquisition also came with the obligation for Magna Prima to build a new Lai Meng school in Bukit Jalil which means the cost to the developer is higher.
KGV International Property Consultants Sdn Bhd executive director Anthony Chua said that at the current market, the price for development land in the Kuala Lumpur city centre area could go as low as RM3,000 psf and up to RM3,500 psf.
“The Lai Meng School land is located at a strategic area, which is a stone’s throw away from KLCC. It is one of the prime parcels along the Jalan Ampang stretch. It has a sizeable area suitable for any type of development and there are not many of that size left,” he told StarBiz.
The Lai Meng land is seen as strategic located next to Hotel Maya and less than 1km walk to KLCC. However, the drawback is that there is a cemetery at the rear end of the land.
But Chua said that having a cemetery should not be a big issue.
According to sources, KWAP is biding for the land at the range of about RM3,300 psf which could see the government-linked investment fund forking out at least RM376.6mil, if it secures the bid.
The highest transacted price for development land around the KLCC area that has been disclosed is RM3,300 psf.
In November 2013, Singapore listed developer, Oxley Holdings Ltd bought a 3.2-acre piece of land in Jalan Ampang for RM3,300 psf, or RM446.7mil.
The company bought the land, that is down the raod from KLCC and separated from the Petronas Twin Towers by a Chinese temple and Wisma Central, from Loke Wan Yat estate.
Both KWAP and Magna Prima have yet to reply to questions from StarBiz.
Last year, Magna Prima secured a plot ratio of 1:12 for the land from the Kuala Lumpur City Council, which means that the company can build up to 12 times the size of the land.
Magna Prima had an ambitious plan to build a 60-storey twin towers on the land, with a combined gross development value of RM1.8bil. One of the towers is to comprise a mixture of serviced apartments, hotel and offices, while the other tower is expected to be a Grade A office building with Green Building Index elements.
However, according to sources close to the low-profile property developer, the project was too big for it to handle as it needed large funding.
Magna Prima had a cash and cash equivalent of RM46mil as at Dec 31, 2014, with borrowings of up to RM543.33mil as at end of last year from RM286.5mil at end-2013.
If KWAP secures the Lai Meng School land, it would be its first foray into the local property development scene as prior to this it had only acquired completed properties for investments.
This comes as KWAP had been reported to be looking for opportunities to acquire plots of land with development potential following a revision to its investment guideline that allows it to undertake construction of property development.
The pension fund, which has an asset size of RM107.68bil as at Sept 30, 2014, had recently acquired its maiden property in Malaysia, the 39-storey Integra Tower, which is part of The Intermark development, for RM1.065bil.
The pension fund currently owns or co-owns nine commercial properties overseas – six in Australia and three in London.
It has allocated between 6% and 8% of its total fund to invest in domestic and international property.
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