PETALING JAYA: There was a lot of hype when the Rubber Research Institute of Malaysia sold its land of about 3,000 acres in Sungai Buloh to the Employees Provident Fund about 10 years ago.
Prices of houses were rising and there were high hopes of building affordable housing in the planned transport-oriented development at a time when the Sg Buloh-Kajang MRT line was in the works.
Today, a decade or so later, nothing much has changed, other than the MRT infrastructure, and the near completion of EPF’s headquarters. Only a park will be ready soon.
So, when news popped up in April that conglomerate YTL Corp Bhd had signed an agreement with Kwasa Land Sdn Bhd to develop 12.7 acres there, it was viewed positively.
Maybe, finally, there will be some activity there.
EPF had paid RM2.28 billion cash for about 2,800 acres. It bought the land with contributors’ retirement savings and cannot afford to buy land and sit on it.
It has to get up to speed to develop the land but EPF is not a property developer. It has to partner with developers to do so.
The wheeling and dealing involving that land was itself controversial. In 2019, it emerged that the Malaysian Rubber Board, which oversees the RRI, had been short-changed by about RM800 million.
MRB had sold the land to a finance ministry special purpose vehicle (SPV) in 2010 for only RM1.5 billion via a direct sale under Cabinet instruction the same year.
That SPV, Aset Tanah Nasional Bhd (ATNB), then re-sold the land a year later to EPF for RM2.28 billion when the fund could have dealt directly with MRB.
Kwasa Land Sdn Bhd was established to manage EPF’s property investment. Kwasa Land is a wholly-owned subsidiary of the EPF and the master developer of the Kwasa Damansara township.
All this is now water under the bridge but history often matters.
On April 22, an announcement of YTL’s entry into Kwasa Damansara omitted to mention that the same plot had previously been awarded to Naza TTDI Sdn Bhd in 2015 to build 278 units of leasehold villas. Tentative launch: 2016 third quarter. Total gross development value (GDV): RM400 million.
On completion, Kwasa Land’s financial return based on net present value would have been RM88 million, which is equivalent to RM160 per sq ft (psf), inclusive of the revenue guarantee, it was reported.
Naza TTDI was among a handful of bumiputra developers awarded land parcels there between 2014 and 2018.
Naza TTDI declined to comment on why it gave up the land, other than that they “do not own any land there now, and are not involved with the development there at the moment.”
YTL also declined to comment.
YTL Corp Bhd’s entry into Kwasa Damansara is significant on two levels. It is the first large non-bumiputera property developer to secure space there. Other non-bumiputra developers have tried earlier but failed to land a deal.
According to a source, the initial plan had been to give bumiputra developers the first bite of the cherry with pre-determined commercial and housing projects, right down to the number of high-rise units and scheduled launch dates.
The developers who took that first bite, besides Naza TTDI, included MRCB group (64.30 acres), Impiana Land and Development Sdn Bhd (8.79 acres), Ahmad Zaki Resources Bhd (3.91 acres), Gadang Holdings (21.08 acres) and TSR Capital Bhd (6.59 acres).
Under YTL Corp, the GDV was halved to RM200 million, from Naza TTDI’s previous RM400 million.
Instead of 278 villas, they would build 1.5-storey townhouses and 3-storey landed terrace houses. No numbers were given. The plan is to reduce density, it seems.
There have been a lot of changes in the property sector these 10 years. When the parcels were first carved out, a huge speculation party was going on in the sector.
The party is long over but demand remains strong. Affordability and job security are issues, post Covid-19 pandemic.
Which also means that the master plan for Kwasa Damansara may need some tweaking. The approval of Kwasa Damansara’s master plan was based on demand and supply in earlier years.
Demand, some developers say, is likely to have evolved with the preference for more space, post Covid-19. Less high-rise, more land may be the way to go because most of the previous developers who were awarded land there had been scheduled to build high-rise residentials.
Last year, sources said, Kwasa Land was about to open up more land for private and government-linked developers.
In the beginning, it was the norm to pre-determine what goes into a parcel, with possibly larger parcels being carved up later.
However, and in view of what may lay ahead – whether calm or rocky days – it may be better to start with a clean slate of more than 2000 acres, in order to make it as lucrative and as competitive as possible.
An urban design competition with regards to land use may also be the way to go.
EPF has to be creative and it cannot limit its investment for that land to just local private and government-linked developers. There is a lot more creative juice out there.
At a time when real estate prices are rising, our real estate valuations are trending downwards. To do justice to the land, developers have to balance it carefully with green sustainable design and developments.
The issue is not just with regards to environment, social and governance, or ESG, but real green issues that take liveability into consideration.
It is also time that MRB’s assets remain as MRB’s assets. MRB sold those more than 2,000 acres about 10 years ago.
Is MRB going so big into rubber research that it needs to monetize its land assets further?
These are the questions that have to be asked of Lot 20012 – which involves an alleged sale to a developer – and Lot 20013, a lease to a foundation which was in the press recently.
Both parcels are located near the Great Eastern Mall in Jalan Ampang, Kuala Lumpur.
A couple of months ago, MRB said there are no “land scandals” involved in these “deals”. If MRB feels it was short-changed in the Kwasa Damansara deal, should it not be more careful with its land resources. After all, once bitten twice shy. - FMT
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