MRCB’s first purchase in Jalan Kia Peng last week is expected to result in a commercial development. Within walking distance of the Kuala Lumpur Convention Centre, the price MRCB paid at RM3,188 per sq ft translates into about 6% premium to the market value of the land based on appraisals conducted by independent valuers, press reports said.

AM Research said in its research report last week the merits of MRCB’s German purchase will be anchored by its strategic location and possibly, an attractive plot ratio. The project could kick off early next year with an indicative gross domestic value (GDV) of about RM1.3bil, Am Research said.

“We believe that the latest development reaffirms MRCB’s increasing penetration as an urban property developer, with a lucid focus on highly visible or transport-oriented developments,” it said.
MRCB said the acquisition of the German land was part of the group’s expansion strategy after taking into consideration the scarcity of freehold land in the sought-after KLCC area.

According to several industry sources, land sales in the city has been brisk since the British High Commission sale with other diplomatic missions giving up their land in order to relocate to a building.

The two German land sales – the former Goethe Institute site and the German ambassador’s residence in Jalan Kia Peng – and now the French embassy land lend credence to this.

But it is not just diplomatic missions giving up their land that is sparking interest among local land-hungry developers. The entrance of foreign developers, from China and Singapore has also pushed up prices.

In 2013, Oxley Holdings (M) Sdn Bhd, a unit of Singapore-based developer Oxley Holdings Ltd, purchased 3.2 acres in Jalan Ampang, forking out RM3,300 per sq ft, with an absolute price of RM446.7mil. Located on the Pelita Nasi Kandar site, it is separated from the Petronas Twin Towers by Wisma Central.

Land value has moved up in the city considerably the last several years. City Hall’s “continual increase of plot ratio” has also fired up the imagination of land owners who demand high prices.

Land value is dependent on the plot ratio and land use. The higher the plot ratio, the higher the development.


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