Bank Negara Malaysia’s (BNM) RM2 billion acquisition of a 55.79-acre land in Kuala Lumpur may signal a policy shift in selling government land at near market prices to entities under Putrajaya.
According to an unnamed source, RM823 psf is considered a large amount of money for the central bank, given that other pieces of government land were divested to other government entities at “way below market value.”
“Maybe this is the beginning of government land deals going in different direction, that is, deals being done closer to market value. Or maybe this just a one-off thing,” noted the source.
BNM recently revealed that the site near its Sasana Kijang complex will be utilised for the International Shari’ah Research Academy for Islamic Finance and Global Islamic Finance University (INCEIF).
The central bank did not divulge the specific location of the plot, except that it is near the new Asia School of Business complex and the Financial Industry Training Centre that is presently under construction. This led to speculation among experts that the land could be an extension of Lake Gardens in Kuala Lumpur.
In addition, only BNM and the seller knows the land’s zoning. This means the public does not know if it’s commercial, just like Bandar Malaysia and Tun Razak Exchange (TRX), both of which command higher prices.
“However, we do know that it is a single title, a portion of which was leased to Open University Malaysia, International Open College and International University of Malaya-Wales,” said the source.
“We also know that pockets of Lot 41, which is the 55.79 acres, was used for staff quarters. Open University will be moving out from that land this year. Prior to this, the same buildings occupied by the educational centres were used by the Public Works Department.”
Meanwhile, market watchers argue that BNM could have saved money in the transaction. Instead of buying 55.79 acres of land for several buildings, it could have prudently acquired five acres with a plot ratio of ten for less than RM823 psf to create towers with nearly a similar amount of total space.
Nevertheless, experts noted that it’s not uncommon for buyers to spend a large amount of money to acquire land adjacent to their existing properties.
For instance, Tan Sri Desmond Lim’s Urusharta Cemerlang Sdn Bhd bought a 29,127 sqft vacant land along Jalan Bukit Bintang from Singapore mogul Kwek Leng Beng for a record price of RM7,209 psf in 2010.
Image sourced from The Star.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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