HK’s Nan Fung puts KL land up for sale

HONG KONG-based Nan Fung Group plans to dispose of several parcels of land in Kuala Lumpur measuring a total of 33 acres for an estimated RM700 million, sources say.

They include two parcels in Jalan Ampang measuring 6.35 acres in total, a 25-acre tract in Ulu Klang near Bukit Antarabangsa and a 1.82-acre parcel in Desa Petaling.

Savills Malaysia has been appointed the exclusive agent for the sale. When contacted, a senior executive at the agency declined to comment.

The Edge understands that the land parcels are owned by Yip Fung Sdn Bhd, which is wholly owned by Nan Fung Textiles Ltd. Nan Fung Textiles was set up in 1954 as a textile manufacturer. In 1989, it was incorporated into the Nan Fung Group, which is now involved in property development, construction, hospitality management and fi nancial investment.

According to two sources, the owners have for over a decade expressed their intention to sell the land. However, this is probably the fi rst time Nan Fung has requested real estate agents to submit a request for proposal (RFP) for a planned sale. “They (Nan Fung) asked to submit an RFP late last year or early this year,” a source tells The Edge, implying that the group is serious about the sale.

One of the parcels in Jalan Ampang — two adjacent freehold lots measuring 0.955 and 3.062 acres — is located next to the Thai embassy. The smaller plot is zoned for residential purposes while the larger is for commercial use. At present, a car showroom is located on the site.

The other parcel in Jalan Ampang — two contiguous freehold lots measuring 1.073 acres and 1.256 acres — is located near the Chinese embassy.

It is learnt that Nan Fung hopes to sell the Jalan Ampang land for as much as RM2,500 per sq ft following the RM2,600 psf benchmark set a year ago when the 7.98-acre French embassy land was sold to Putrajaya Ventures Sdn Bhd. The distance between the French embassy land and the parcel next to the Thai embassy is a mere 500m.

Based on the current property prices and the land size, sources say a more realistic price would be between RM2,000 and RM2,200 psf. At this price, the four parcels could fetch between RM553 million and RM609 million.

Incidentally, the former British High Commission’s 3.07-acre parcel was sold to S P Setia Bhd in December 2012 for RM2,200 psf.

If market information is anything to go by, Nan Fung might have bought the Ampang parcels in the mid to late 1980s when land prices in the area were around RM50 psf. Closing the sale at even RM1,800 psf would fetch the group a handsome profit.

As for the land in Ulu Klang, a valuer puts the price at RM40 to RM45 psf, which translates into between RM43 million and RM49 million. The Desa Petaling parcel, which is zoned for residential, could be worth between RM18 million and RM20 million.

Apart from the land parcels, not much had been heard about Nan Fung’s venture in Malaysia until two years ago. In April 2014, AmCorp Properties Bhd entered into a co-investment agreement with Grosvenor Asia Pacific (which is part of Grosvenor Group, the UK) and Nan Fung Group to co-invest in high-end residential value-add developments as well as commercial value-add projects in Tokyo, Japan. The fi rst investment by the joint venture was a residential block called Forest Nanpeidei, located in Shibuya-ku, Tokyo, in January last year.

Then, in April last year, the co-investors bought 62 apartments in Tokyo with a total of 1,963 sq m, or 40% of the net rentable area, in a mixed-use building known Court Annex Roppongi for ¥2.06 billion.

The property is part of a proposed redevelopment scheme.

Meanwhile, a search with the Companies Commission of Malaysia reveals that Yip Fung was set up in May 1973 and its nature of business is described as renting of buildings. Its directors are Lau Ah Gek, Donald Choi Wun Hing, Phang Fook Fong @ Phang Kok Kong, Eric Chung Chun Kwong and Allen Wong Ka Chun.

Nan Fung, sources say, owns another 10 acres of land in Cheras, Selangor, located near Masterskill University College of Health Sciences. This parcel is not part of the assets put up for sale.

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This article first appeared in The Edge Malaysia on May 3, 2016. Subscribe here for your personal copy.