BUKIT KIARA PROPERTIES SDN BHD (BKP) has placed a prime parcel in Jalan Tun Razak, Kuala Lumpur — located opposite Bangunan Tabung Haji — up for sale.
The property developer, known for developments such as VERVE Suites in Mont’Kiara and Hijauan Kiara, had originally planned to develop luxury serviced apartments known as VERVE Suites KLCC on the 39,354 sq ft parcel.
However, BKP has now decided to sell the land — situated between the Auto Bavaria showroom and the headquarters of Weststar Maxus Distributors Sdn Bhd — and use the proceeds to diversify its portfolio into the suburban areas within Greater Kuala Lumpur.
Last week, real estate agent Savills (M) Sdn Bhd, which was appointed by BKP as the exclusive agent to conduct the sale, placed an advertisement in The Edge inviting interested buyers to submit bids for the asset.
The parcel belongs to Pristine Springs Sdn Bhd, which is a subsidiary of Al Batha Bukit Kiara Holdings Sdn Bhd, the parent company of BKP.
“The land is 0.9 acre. It is a freehold parcel with an approved commercial title and a plot ratio of 9.2,” BKP chief operating officer L K Fan tells The Edge. Although he did not say at what price BKP is hoping to close the deal, he indicated that the developer has based the sale price on the land being immediately ready for development as the necessary approvals have been obtained, as well as recent transactions of comparable parcels in the vicinity.
“Our land in Jalan Tun Razak has secured the development order (DO) and building plan to build serviced apartments,” says Fan. BKP obtained the DO in March 2013. It had proposed to build a 36-storey block with 270 serviced apartments, five floors of podium car park and four basement floors for parking. In addition, it had planned to include facilities such as a swimming pool and retail space.
“Some of the notable transactions of smaller sites in the vicinity include the German Embassy parcel in Jalan Tun Razak (1.87 acres @ RM3,188 per sq ft), the Tropicana land in Jalan Bukit Bintang (3.18 acres @ RM3,280 psf), the Oxley Holdings land in Jalan Ampang (3.2 acres @ RM3,300 psf) and former Conlay Club land bought by KSK Group in Jalan Conlay (3.65 acres @ RM3,573 psf),” Fan points out.
Malaysian Resources Corp Bhd won a bid to purchase the German Embassy parcel in Jalan Kia Peng, near the Petronas Twin Towers, for RM259.15 million two months ago. A year ago, Tropicana Corp Bhd sold eight contiguous parcels in Bukit Bintang to Offshore Triangle Sdn Bhd for RM448.4 million.
KSK Group, meanwhile, purchased the Jalan Conlay parcel next to Prince Hotel for RM568 million. This parcel, too, had a DO, but the project was not completed.
Based on a conservative price of RM3,000 psf, which is the lower end of the transacted price range, the 39,354 sq ft parcel may be sold for some RM120 million.
According to information made available to The Edge, Pristine Springs bought the parcel in 2007 for RM26.76 million or RM680 psf from Glorious Reflection Sdn Bhd. If BKP manages to sell the land at RM3,000 psf, it is likely to make a handsome gain.
Meanwhile, Nabeel Hussain, associate director of Savills Malaysia, says the real estate agent has already issued 15 tender forms to interested parties, both local and foreign, over the past two weeks. He adds that the site can be distinguished from the other parcels nearby as it has a higher plot ratio of 9.2 compared with plot ratios of between six and seven in the vicinity.
As the DO and building plan have been approved, the buyer will not incur additional costs such as development charges or fees related to the approvals. “The buyer would be able to save 9 to 12 months of approval time,” says Nabeel.
He points out that this would be an attractive proposition, particularly to foreign investors given the recent weakening of the ringgit.
Submissions for the tender closes on July 10 at 12pm.
With regard to BKP’s decision to divest the prime parcel, Fan says, “We are keen to diversify into the suburban areas of Greater KL as we are seeing opportunities there. With the proceeds from the transaction and support from our shareholders Bukit Kiara Capital [Sdn Bhd] and the Al Batha Group (one of the largest conglomerates in the United Arab Emirates), it would allow us more room to explore the possibilities in other areas.”
According to Fan, apart from this parcel, BKP has 0.96 acre in Persiaran Madge, Kuala Lumpur, and 1.36 acres in Jalan Kelang Lama, which is the site of its VERVE Suites KL South project.
BKP, which focuses on one project at a time, is now concentrating on VERVE Suites KL South. A joint venture between Al Batha Bukit Kiara Holdings and Affin Islamic Bank Bhd, and managed by BKP, the project’s estimated gross development value is in excess of RM320 million.
This article first appeared in The Edge Malaysia Weekly, on June 29 - July 5, 2015.
Save by subscribing to us for your print and/or digital copy.
P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.