Friday 29 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on December 6, 2021 - December 12, 2021

LEMBAGA Tabung Angkatan Tentera (LTAT) is believed to be exploring the development of the sizeable and well-located Batu Cantonment army camp in Jalan Ipoh, Kuala Lumpur, potentially on a joint-venture basis.

Sources say LTAT has already begun the process of searching for a suitable project partner for the attractive site, which is four times the size of the Tun Razak Exchange. The site, because of its considerable size coupled with the existing glut in the real estate market, could take 30 to 40 years to develop.

“The 280 acres of Batu Cantonment land currently houses an army camp. Any consideration to conduct future development plans for the property would need proactive consultations with all stakeholders, namely the army and Mindef (Ministry of Defence). At this juncture, LTAT is of the opinion that it is too premature to comment on details of the future plans for this property,” LTAT tells The Edge in an email reply when contacted for confirmation.

A source says LTAT had recently reached out to real estate consultants to submit a request for proposal (RFP) as part of a planned development. The agencies are required to make recommendations of suitable joint-venture partners and the winning bidder will be issued a letter of offer. LTAT has targeted February 2022 for completion of the entire selection exercise.

The Edge understands that the 280-acre tract comprises four parcels, with the largest measuring 223 acres.

“Since the site is 280 acres, we are looking at a development horizon of 15 years to 20 years,” Laurelcap Group executive director Stanley Toh tells The Edge, noting that the site is suitable for a mix of residential and commercial developments such as high-rise serviced apartments, a shopping centre, shopoffices and condominiums.

“Having said that, there is a slight oversupply of high-rise apartments in the area. Hence, it would not be advisable to launch thousands of units at one go. You would have to look at the market sentiment and target the current number of units prior to launching as there are many competitors and supply coming into the market in nearby areas such as Segambut, Mont’Kiara and Hartamas,” he stresses.

Toh pegs the land value in the area at RM150 to RM180 per sq ft, giving the 280-acre tract a back-of-the-envelope valuation of RM1.83 billion to RM2.19 billion.

A valuer who declines to be quoted says the site is zoned for mixed use with a plot ratio of four. However, since the land is located within the transit planning zone (TPZ), the plot ratio has been automatically increased by 0.5 to 4.5.

Another industry expert who prefers to remain anonymous says: “The Batu Cantonment site is one of the last remaining large pieces of development land in KL, along with the Sungai Besi airport site. While both offer good vehicular access to the city centre, the Batu Cantonment site is better placed in terms of public transport at this stage.

“The site, which is roughly 280 acres, is currently gazetted at a 1:4 plot ratio, which translates to about 49 million sq ft of gross floor area (GFA) — about two times the size of KL Sentral or KLCC. It is expected that additional density will be allowed by Kuala Lumpur City Hall (DBKL) due to the site’s proximity to public transport. And while the quantum of additional development allowable has varied in the past [from as low as an additional 0.5x plot ratio], it appears reasonable to expect the final GFA tally to exceed 54 million sq ft.”

Citing the examples of KLCC and KL Sentral, where work began in the 1990s, he points out that both projects have yet to reach completion after 25 years. “Similarly, one would expect development of the Batu Cantonment site to perhaps stretch across three or four decades.

“One key aspect to keep an eye on is the affordable housing provision within the development. Such a huge project could go a long way towards easing a significant portion of the city’s housing issues if managed and funded appropriately.”

It is noteworthy that in 2011, there were plans for Boustead Holdings Bhd — of which LTAT is the majority shareholder — to buy this very tract to develop a RM8 billion project. At the time, it was reported that the site would be ideal for a mixed-use development, but the plans did not materialise.

Should the land be redeveloped, the Batu Cantonment army base, which has been there for more than 50 years, would have to relocate. In 2002, it was reported that the Perak government had earmarked a 1,680-acre site in Batu Gajah for the relocation. However, it is unclear if the plan remains unchanged.

Meanwhile, this is not the first time that talk of land in the Klang Valley owned by LTAT or occupied by the army may be undergoing development. In Mutiara Damansara, land that had originally been

allocated for an army base was acquired by Boustead Holdings from LTAT for a major commercial development.

Boustead had also acquired land owned by LTAT for the Jalan Cochrane project, where the MyTOWN mall is located. However, more recently, Boustead’s focus has been on divesting its assets to help pare down its huge debts.

Whereas the former Sungai Besi Royal Malaysian Air Force base is an example of armed forces-occupied land identified for development. Measuring 486 acres, the valuable site has been identified for the

development of the Bandar Malaysia project, which has yet to take off owing to political, financial and other issues despite numerous attempts to launch the prestigious project since 2015. The air force base has since been relocated to a 750-acre site in Sendayan, Negeri Sembilan.

Other parcels that LTAT is said to own include 70 acres of leasehold land in Bukit Jalil. A proposal by Boustead to purchase 10.74 acres and develop it was aborted three years after it announced the proposed purchase of the land.

In 2013, LTAT purchased a 13.7-acre parcel in the diplomatic enclave of U-Thant in Ampang Hilir from the Federal Lands Commissioner (Pesuruhjaya Tanah Persekutuan). In 2018, it submitted a proposal to DBKL to build four blocks of apartments on the site. The status of this project is unclear.

 

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