KUALA LUMPUR: Mammoth Empire Holdings Sdn Bhd — whose flagship development is Empire City Damansara in Petaling Jaya, Selangor — has put the land earmarked for its ambitious multibillion ringgit Empire City Damansara 2 project up for sale.
According to sources, the property developer and asset manager hopes to fetch RM800 million for the 64-acre (25.9ha) site opposite the existing 23-acre Empire City along the Damansara–Puchong Expressway (LDP).
The Empire City 2 site is double the size of the ongoing Empire City project. Both sites are located just before the LDP Penchala toll plazas.
Mammoth Empire had planned a behemoth integrated development comprising world-class theme parks, concert auditoriums, cultural centres, retail and office suites on the land, with a gross development value in excess of RM10 billion.
It isn’t clear why Mammoth Empire is planning to divest the land which it had purchased seven years ago, and what the company plans to do with the money from the sale. The decision to divest the asset will, nevertheless, free up cash for Mammoth Empire and enable it to monetise its asset instead of holding on to it given the current soft property market.
The sale comes just eight months following the sale of Empire Shopping Gallery in Subang Jaya, Selangor, to Pelaburan Hartanah Bhd for RM571 million. The Edge Malaysia weekly had reported that the bulk of the money from the sale will go towards the completion of Empire City, while the remainder was to be used for working capital.
Based on an advertisement that appeared over the weekend, a 63.85-acre leasehold parcel comprising three adjoining and contiguous prime commercial development land has been put up for sale via tender. The advertisement also stated that the asset was located opposite Empire City, along PJU8/8, next to the proposed light rail transit extension line.
Henry Butcher Real Estate Sdn Bhd has been hired as the exclusive marketing agent. The closing date for the tender is Oct 31.
Officials from Mammoth Empire could not be reached for comment over the weekend. The Edge Financial Daily was also unable to reach officials from Henry Butcher for details.
According to a source, the land — registered under Foster Estate Sdn Bhd — has been valued at RM800 million. This translates into RM287.60 per sq ft for the total 2.78 million sq ft of land.
A valuer and a real estate agent told The Edge Financial Daily that the pricing in that area is in the price range of RM200 plus per sq ft. Some of the factors to consider would be whether the land had already obtained a development order (DO) from the local authorities and what was the plot ratio received. Typically, a land with a DO would be able to fetch a premium compared with a land without a DO. Moreover, based on a quantum factor, given that the land is huge, the price per sq ft should be lower than that of smaller plots.
It is learnt that the Empire City 2 development was to be built over three phases.
One source said Mammoth Empire has already obtained its DO for Phase 1 and has made submissions for the second and third phases of the project. There is also a huge lake on the land, which is said to have been reclaimed.
Based on documents, reports and Bursa Malaysia announcements, it appears that these plots are the parcels purchased by Mammoth Empire in 2010 and 2011. Records showed that in 2010, Mammoth Empire had bought a 41-acre site and a 16.83-acre site on Jalan PJU8/8 from Saujana Triangle Sdn Bhd.
Saujana Triangle is a wholly-owned subsidiary of MK Land Holdings Bhd. Both parcels were purchased for an estimated RM130 million. The price of the larger parcel was an estimated RM55 per sq ft, and the smaller one at RM40 per sq ft.
In 2011, Foster Estate purchased another parcel of land along Jalan PJS 8/8. This 6.33-acre parcel was purchased from Crest Builder Sdn Bhd, a unit of Crest Builder Holdings Bhd, at RM57.53 million or RM208 per sq ft.
In total, Mammoth Empire had spent about RM187.53 million for the purchase of the entire site. This suggests that should Mammoth Empire sell the land at over RM200 per sq ft, it may be able to make a handsome profit from the sale.
Mammoth Empire is co-founded by its group managing director Datuk Sean Ng Yee Teck and group executive director Datuk Danny Cheah. Empire City is the single largest property development undertaken by the group to date. The entire built-up of the project is an estimated 13 million sq ft, with only 5% of the entire built-up remaining for completion, which will mostly feature high-rise blocks. Empire City is expected to be fully developed by the end of next year.