Disposal of prized Kompleks Kraftangan land likely

THE government is considering disposing of a prime 11.04-acre tract near the Bukit Bintang area, where Kompleks Kraftangan is located.

The parcel could potentially fetch RM1.2 billion.

While details remain sketchy, sources say many investors and property developers, including government-linked companies, are keen on the land, which is adjacent to The Royal Chulan Hotel.

The Edge has learnt that a listed property developer may have emerged as the front runner and is believed to be seeking a partner to invest jointly or develop the tract. The size of the land would require deep pockets and the right partners to share the risk.

Should the land be sold, it would be the third prime parcel in Kuala Lumpur to be put up for sale by the government, after the Lembah Ledang and Bukit Ledang parcels near Damansara Heights this year.

Going by the RM3,573 psf paid for a parcel in Jalan Conlay by KSK Group, the 11.04-acre or 481,039-sq ft site could be worth a whopping RM1.72 billion. The land purchased by the KSK group, which changed hands in early 2014, is now being redeveloped to 8 Conlay.

A search at the Federal Territories Kuala Lumpur Lands and Mines Office reveals that it is a freehold title and is registered in the name of the Federal Lands Commissioner. However, the land use is not specified.

According to a valuer contacted by The Edge, in deciding the market value of the land, its size and plot ratio should be taken into account. He estimates the price of the parcel to be RM2,500 psf. He adds that should the land be divided into smaller parcels, each parcel may fetch a higher price.

“The land area is huge. Based on the quantum factor, the bigger the land, the lower the price psf. It may be better for the government to divide the 11 acres into two or three acres each and then sell it,” he says. He opines that this could raise the price to RM3,000 psf. Other factors to be considered by the buyer include whether the land will be given commercial status.”

Another government land parcel sold in the area is the one directly opposite Kompleks Kraftangan, which once housed the office of the Kuala Lumpur Regional Centre for Arbitration. In July 2012, Pelaburan Hartanah Bhd acquired 296,427 sq ft (6.8 acre) of freehold parcel directly opposite Kompleks Kraftangan from the Federal Land Commissioner (Section of Land Management and Legislation) for RM549 psf or RM162.8 million

The Kompleks Kraftangan land was in the limelight in March this year when Mass Rapid Transit Corp Sdn Bhd (MRT Corp) said that the traders at the handicraft centre in Jalan Conlay, who are affected by the MRT Sungai Buloh-Putrajaya Line, will be relocated to a new complex at Dataran Merdeka Underground. The land was earmarked for a future underground MRT station for the Sungai Buloh-Serdang-Putrajaya Line.

However, the alignment has since changed and MRT Corp will no longer be relocating the tenants of Kompleks Kraftangan. “The future MRT Station S18 located in Jalan Conlay has been moved due to technical issues and is no longer located at the land occupied by traders of the handicraft centre. In view of this, MRT Corp and its contractor no longer need to relocate the traders,” MRT Corp’s director of Strategic Communications and Stakeholder Relations Datuk Najmuddin Abdullah tells The Edge via email.

Nevertheless, The Edge now has learnt that possibly as a result of the land sale, Kompleks Kraftangan may be relocated to Bangunan
Sultan Abdul Samad, opposite Dataran Merdeka.

It is interesting to note that on Jan 23, 2009, the Minister of Natural Resources and Environment had lodged a registrar’s
caveat on several plots of land in Kuala Lumpur, including Lot 335, which is the Kompleks Kraftangan site, as well as Lot 342, which was previously the site for the Harrods Hotel project. This caveat was lodged to prevent any “improper transfer of the land”.

Although the Harrods project site was reportedly acquired in 2012 by a company linked to Tan Sri Desmond Lim Siew Choon, to date the land remains under the name of the Federal Land Commissioner and the caveat also remains in place.

Seven months ago, the Ministry of Finance put up two parcels of land near Damansara Heights for sale. A larger parcel, measuring 19.14 acres in Jalan Lembah Ledang facing Jalan Tuanku Abdul Halim, had a reserve price of RM1,000 psf or RM833.3 million. Then in April, the reserve price was reduced to RM750.31 million or RM900 psf.

The other parcel nearby measuring 9.74 acres was going for RM700 psf or RM297.03 million.

The Edge understands that a winning bidder may have been selected for the larger parcel, but both parcels continue to remain in the name of the government.

This article first appeared in The Edge Malaysia on Oct 10, 2016. Subscribe here for your personal copy.