THE Harrods Hotel project, which was meant to be the jewel in the crown of Qatar’s investment in Malaysia, may be scrapped. This could be a big blow to the local hospitality industry as Kuala Lumpur was supposed to be home to the world’s first luxury-class Harrods Hotel.
Sources tell The Edge that the new regime at sovereign wealth fund Qatar Investment Authority (QIA) is of the opinion that all pending projects initiated by the previous management, including investment arm Qatar Holding LLC, should be reviewed. This follows the ascension of the new Emir, which has affected some of QIA’s business plans.
This new development has also fuelled speculation that the 2.21ha parcel for the Harrods Square project, of which Harrods Hotel is a component, may be put up for sale.
The Harrods Square development located in Bukit Bintang is being undertaken by Jerantas Sdn Bhd — a tri-party joint venture involving Tan Sri Syed Mokhtar Albukhary, Tan Sri Desmond Lim Siew Choon and Qatar Holding. PS Trading Sdn Bhd, a unit of Syed Mokhtar’s Tradewinds Corp Bhd, has a 34% stake in Jerantas. The remaining 64% is held by Gagasan Simfoni Sdn Bhd, which is equally held by Lim and Qatar Holding.
Property experts estimate the gross development value of Harrods Square at around RM5.5 billion. News reports two years ago indicated that Qatar Holding would spend as much as RM2 billion on this development.
QIA did not respond to an email query sent by The Edge. Representatives of Syed Mokhtar and Lim also did not respond to calls and messages.
“Chief among QIA’s concerns was that the land on which the hotel was to be built did not belong to any of the parties involved in the project,” says a source. He adds that Lim, as the initiator, was seen as “too close” to the former QIA team.
In January, The Edge reported that 2½ years after news that land identified for the development of Harrods Square had been acquired via tender, it had not been transferred to Jerantas and continued to remain in the name of the Federal Lands Commissioner.
Essentially, Harrods Square would be built on two adjacent parcels opposite Pavilion Kuala Lumpur. Restoran Seri Melayu used to sit on Lot 342 and Chulan Square was on Lot 297. The two parcels are sandwiched between Jalan Raja Chulan and Jalan Conlay.
A land search early this year revealed that the Minister of Natural Resources and Environment had on Jan 23, 2009, lodged a registrar’s caveat on several plots in Kuala Lumpur, including Lot 342. The caveat was lodged to prevent any “improper transfer of the land”. Lot 342 is a freehold parcel measuring 150,609 sq ft while Lot 297 is a 53,970 sq ft leasehold plot that had been registered in the name of Datuk Bandar Kuala Lumpur in 1982.
A more recent search with the Federal Territories Director of Lands and Mines Office on March 24, 2015, shows that Lot 342, on which the groundbreaking ceremony for the project was held, continues to remain in the name of the government. The registrar’s caveat is also in force.
The Edge understands that Syed Mokhtar is not the one spearheading the project but Lim and Qatar Holding.
Meanwhile, the final decision on Harrods Square will lie with Qatar Holding’s board — and by extension, Emir Sheikh Tamim bin Hamad al-Thani. In June 2013, Prime Minister Hamad bin Jassim bin Jaber bin Muhammad Al Thani was removed following Sheikh Tamim’s ascension. A month later, Hamad lost his position as chief executive of QIA to Ahmed al-Sayed. Ahmed, in turn, was replaced in a boardroom shake-up last December by Sheikh Abdullah bin Mohamed bin Saud al-Thani.
Harrods Hotel and Residences, slated to open in 2018, is expected to set the new benchmark for luxury-class accommodation in Malaysia. It is supposed to be the first of three Harrods hotels in the world.
Jerantas’ Harrods Square project is a mixed-use development comprising four blocks: a 27-storey hotel with 102 rooms and 60 serviced apartments; a 61-storey building with 508 serviced apartments and commercial and retail space; a 52-storey building with 516 serviced apartments and commercial and retail space and a 31-storey office building with a food court and a day care centre.
This development will be connected to Pavilion KL via an underground tunnel and an overhead pedestrian bridge. Jerantas had submitted its application to DBKL last April. There have been no subsequent submissions to DBKL following the conditional approval given in June.
This article first appeared in The Edge Malaysia Weekly, on March 30 - April 5, 2015.
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