WHILE transactions for land parcels and major commercial buildings are hotting up in Kuala Lumpur, there are still several prime tracts, valued in excess of RM3 billion, that have not seen any progress after the initial hype about their development plans.

A combination of factors, ranging from changes in management to land issues, decision to handle smaller projects and subdued demand, is causing these parcels to be left idle.

One such parcel is the site of the proposed Tradewinds Centre in Jalan Sultan Ismail, handled by Tan Sri Syed Mokhtar Albukhary’s Tradewinds group.

News about this project first surfaced in 2011, and two old buildings — Crowne Plaza Mutiara Hotel and Kompleks Antarabangsa — were to make way for an integrated development with an estimated gross development value (GDV) of RM6 billion. Demolition work began on May 1, 2013.

While early architect drawings had indicated that the project would be completed next year, the date was later pushed back to 2020.

A new partner from the United Arab Emirates, Mohamed Ali Rashed Alabbar, was brought in last year and a company called Tradewinds International Sdn Bhd was set up. Observers then felt that the development would finally commence.

But now, even the development plans submitted to Dewan Bandaraya Kuala Lumpur (DBKL) have been withdrawn and it is not clear when the project will take off. The land measures 8.58 acres and could be worth RM1.23 billion today.

Meanwhile, Harrods Square, another of Syed Mokhtar’s project, in a joint venture with Tan Sri Desmond Lim and a Qatari sovereign wealth fund, Qatar Investment Authority (QIA), has also not seen much progress.

News of the project first surfaced in September 2011 and its reported completion date is 2018. But now, the project is believed to have encountered some problems and is likely to be delayed.

The parcel is located between Jalan Raja Chulan and Jalan Conlay, and within the Bukit Bintang tourism and shopping enclave. The luxury development has an estimated GDV of RM5.5 billion.

As at end-March, the title to the said parcel had yet to be transferred to the developer, Jerantas Sdn Bhd, from the Federal Lands Commissioner. A registrar’s caveat was also in force. An adjacent parcel, which was once home to Chulan Square, had also not been transferred and was still in the name of Datuk Bandar Kuala Lumpur.

Talk has emerged that QIA is reviewing the project.

Nevertheless, if the RM1,800 psf reportedly paid by Jerantas in 2012 is anything to go by, the parcels could be worth a lot more today. Together, the parcels measure 204,579 sq ft and are probably worth some RM650 million now.

Magna Prima Bhd’s SJK (C) Lai Meng redevelopment in Jalan Ampang is another example where not much has happened on the site. It is said that the developer has decided to sell the land instead.

Magna Prima (fundamental: 1.1; valuation: 1.4) bought the 2.59 acres in 2009 and obtained the green light from the local authorities to proceed with the construction. The parcel has one of the highest plot ratios in the city centre, at 12.

However, six years on, Magna Prima has decided to divest the parcel. It was reported that the developer may have only paid just over RM1,700 psf, which covers the cost of the land and relocating the school to Bukit Jalil. With land parcels in Jalan Ampang fetching as much as RM3,300 psf now, the company could sell the parcel for at least RM373 million.

The former British High Commission property in Jalan Ampang is yet another prized site where development is still in the planning stage. The acquisition was announced in late 2012 and the High Commission moved out on Jan 29 last year.

S P Setia Bhd bought the 134,075 sq ft parcel for RM294.96 million, or RM2,200 psf. At the time of the acquisition, the developer said it had planned an integrated commercial development with a GDV of RM1.04 billion.

Also, in 2010, Pelaburan Hartanah Bhd bought Lot 61 in Jalan Bangsar, which was previously Unilever’s premises. PHB submitted development plans for the 19.99-acre parcel in 2011 but nothing has materialised so far. Last October, it submitted yet another plan to DBKL.

All the proposed developments are supposed to have high-rise serviced residences, but as Knight Frank Malaysia managing director Sarkunan Subramaniam recently said, with the present high supply of high-rise residential units near KLCC, yields are expected to continue to be challenged.

Coupled with the cooling measures introduced by the government, which include stricter loan approvals, it is no surprise that these landowners are not rushing to develop their parcels.

This article first appeared in The Edge Malaysia Weekly, on June 1 - 7, 2015.

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