This article first appeared in The Edge Malaysia Weekly on April 10, 2017 - April 16, 2017

THE once abandoned Plaza Rakyat in Kuala Lumpur will soon be redeveloped into a landmark that the developer says will be the most significant next to the Petronas Twin Towers.

Slated for completion in 2022, Profit Consortium Sdn Bhd has planned four skyscrapers — the tallest at 92 storeys  — on the five land parcels that make up the 15.3-acre site in Pudu.  Some  3,805 serviced apartments will be built.

The 92-storey block will have more floors than the 88-storey Petronas Twin Towers.The Signature Tower in Tun Razak Exchange will also be 92 storeys tall, but the highest will be the 118-storey KL118 being built by Permodalan Nasional Bhd.

Profit Consortium bought the abandoned project from Kuala Lumpur City Hall (DBKL) for RM740 million in October 2015.

The company is an 82:18 joint venture between China-based, Singapore-listed property developer Debao Property Development Ltd’s wholly-owned Pavillion Treasures Land and Development Sdn Bhd and Malaysian firm Gabungan Tiasa Sdn Bhd.

The developer, which is finalising the plan for the multibillion-ringgit mixed-used development, has already commenced repair works on the site.

In a circular to shareholders on Jan 11, Debao Property said the project will comprise a central business district (1.35 million sq ft of gross floor area), a five-star hotel (200,000 sq ft), a budget hotel (150,000 sq ft) and a residential condominium (5.6 million sq ft).

The four towers, sitting atop a commercial podium that includes retail space, will provide 7.3 million sq ft of GFA.

“The company believes that Plaza Rakyat ... will become the next most significant landmark in Kuala Lumpur after the Petronas Twin Towers,” the circular says.

Meanwhile, documents sighted by The Edge reveal that Profit Consortium began the development application process last August. In December, it received planning permission for its four towers — a 92-storey building with 1,196 serviced apartments and a hotel, an 87-storey tower with 1,616 serviced apartments, a 63-storey block for a hotel and another 62-storey block with 993 serviced apartments.

On the gross development value of the project, industry experts have given a back-of-the-envelope figure of RM6 billion to RM8 billion. As a general rule, in calculating GDV, the plot ratio and sale price are important.

According to Debao’s annual report for the financial year ended Dec 31, 2015, the developer had planned pre-sales to commence in the first quarter of this year. With, 3,800 serviced apartments available for sale, the question is, who will be the target market and at what price will they be sold.

Last week, TheEdgeProperty.com reported that the average transacted prices of some non-landed residential properties in the KLCC area declined 10% to 24% last year compared with 2015.

For example, the price of Idaman Residences had dropped from RM900 to RM806 psf and St Mary Residences from RM1,391 to RM1,053 psf.

So, what now of Plaza Rakyat? Debao is linked to Guangdong Debao Land Co Ltd. It is not known if Debao has plans to sell its apartments to buyers from China. Beijing recently introduced restrictions on capital outflow,  causing some purchasers of the Forest City project in Johor to have second thoughts.

The history of Plaza Rakyat goes back to 1993, when Tan Sri Ting Pek Khiing’s Wembley Industries Holdings Bhd undertook to develop the land. At that time, the estimated GDV of the mixed-used development was RM1.3 billion.

But the project was halted when  the Asian financial crisis of 1997/98 struck. In November 2014, Plaza Rakyat was handed over to DBKL following a legal process.

Meanwhile, a search on the Companies Commission of Malaysia website reveals that Profit Consortium’s directors are Zhang Mao, Yuan Junrui, Tan Peng Koon, Yuan Lesheng, Tan Sri Abdul Samad Alias, Anuar Adam and Zhong Yuzhao.

The shareholders of Gabungan Tiasa are Eco Habitat Sdn Bhd (33.33%), Maxcorp Development Sdn Bhd (28.67%), Sungei Wang Group Sdn Bhd (28.67%) and Abdul Samad (9.33%).

Eco Habitat’s shareholders are Datuk Seri Tee Yam (90%), Ameera Encee Koo Abdullah (5%), Wong Siaw Puie (5%) and Koo Soon Khang (one share).

The shareholders of Maxcorp are Aldillan Anuar (60%), Almiran Anuar (35%) and Anuar Adam (5%). As for Sungei Wang Group, the shareholders are Abdul Jaliludin Jamalludin (69.31%), Simon Wee Howe Yew (29.70%) and Tan Peng Koon (0.99%).

Anuar Adam, Tan, Aldillan, and Abdul Samad all sit on the board of Tadmax Resources Bhd. Abdul Jaliludin is also a director of Anzo Holdings Bhd.

According to the annual report, apart from Plaza Rakyat, Debao has three other projects in Malaysia. One is in Kuchai Lama and is scheduled for completion in 2019.

Another ongoing project is in Imbi, Kuala Lumpur. Debao took the market by surprise when it paid a record sum of RM4,310 psf or RM388 million for the former SRJK (C) Jalan Imbi. Debao, through Elite Starhill, plans to build two blocks of serviced apartments (72 and 73 storeys) on the 90,008 sq ft tract near Berjaya Times Square. Its annual report states that the project, with GFA of 120,000 sq ft, is expected to be completed in 2019.

The third project is in Cheras Mahkota, which has been reserved for future development. It has an estimated GFA of 129,000 sq ft.

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