Redevelopment work on Plaza Rakyat expected to start in June 2017

Redevelopment work on Plaza Rakyat expected to start in June 2017

Datuk Dr Loga Bala MohanKUALA LUMPUR (April 29): Deputy minister of Federal Territories Datuk Dr Loga Bala Mohan (pictured) said work on Plaza Rakyat is expected to commence in June next year, Bernama reported yesterday. It has been two decades since the project was abandoned.

The Plaza Rakyat project was abandoned in 1997 during the Asia-Pacific financial crisis and after developer Plaza Rakyat Sdn Bhd ran into financial problems.

"Before this [redevelopment] can happen, we have to settle the claims made by all depositors of the project.

"We have advertised this on April 15 and the depositors have until May 7 to respond. Only then can we take action," he told reporters at the parliament lobby, here yesterday.

Loga said beneficiaries of the depositors who have passed away can make claims via the sale and purchase agreement of the business lots.
The depositors are then allowed to either make the claims or own lots to be redeveloped by another developer.

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Guangdong-based company to invest in Plaza Rakyat

Guangdong-based company to invest in Plaza Rakyat

Plaza Rakyat

GUANGDONG Debao Land Co Ltd, a property development company based in Guangdong, China, plans to invest in the long abandoned Plaza Rakyat project in Jalan Pudu.

According to Tan Sri Abdul Samad Alias, a major shareholder of Profit Consortium Sdn Bhd — the developer of Plaza Rakyat — Guangdong Debao will acquire equity in Profit Consortium, but the stake is still being worked out.

“If not, how can we get the money to fund the development [of Plaza Rakyat]? We will negotiate how much Guangdong Debao will purchase later,” says Abdul Samad.

Last Friday, he represented Profit Consortium in signing the sale and purchase agreement (SPA) for the Plaza Rakyat project with Dewan Bandaraya Kuala Lumpur (DBKL), which was represented by KL Mayor Datuk Mohd Amin Nordin Abdul Aziz.

Under the SPA, Profit Consortium will pay RM740 million to take over the 15.3-acre site. Some RM40 million of the purchase price will be allocated to the company to resolve compensation issues with the 211 shoplot buyers.

The signing of the SPA provides a glimmer of hope for the buyers of Plaza Rakyat, who have been waiting for almost 20 years. The project was abandoned in 1997 as a result of the Asian financial crisis.

Despite the SPA, questions remain because the road to completion of the project is fraught with uncertainty. For instance, Profit Consortium will have to drain water that has been ponding at the site and ascertain whether the foundations and structures can still be used.

“If Profit Consortium finds out that the structure has to be demolished, that will incur costs and we will have to renegotiate with DBKL on the pricing,” says Derek J Fernandez, the lawyer who acts for Profit Consortium.

Even if the project goes through, Profit Consortium will have to negotiate with the buyers on whether they want cash compensation or to continue owning a unit at the project, says Fernandez. An ex-gratia payment will also be considered.

The land is still under the previous lease, which expires in 2081. Profit Consortium wants to negotiate an extension of the lease with DBKL if it finds the project is viable.

During the signing ceremony, Profit Consortium paid a RM70  million down payment on the purchase price to DBKL.

It is not known how Profit Consortium will fund the rest of the purchase price and the development cost.

Guangdong Debao has a Singapore-listed subsidiary Debao Property Development Ltd. According to the company’s announcement to the Singapore Exchange (SGX), Debao Property made a net loss of RMB80.1 million during the first half of the financial year ending Dec 31, 2015.

On Sept 25, Debao Property announced to SGX that it is in the process of buying a 90,008 sq ft parcel in Jalan 1/77B, Kuala Lumpur, near Berjaya Times Square, for RM388 million or RM4,310 per sq ft for the development of both commercial and residential properties.

A check on Bloomberg reveals that Debao Property’s market capitalisation is S$57.4 million (RM176.7 million).  

Profit Consortium is owned by Gabungan Tiasa Sdn Bhd, which in turn lists Maxcorp Development Sdn Bhd, SW Land Sdn Bhd and Abdul Samad as shareholders. Maxcorp and SW Land each own a 42.99% stake, while Abdul Samad holds the rest. Note that he is also the chairman of Perbadanan Insurans Deposit Malaysia (PIDM).

Maxcorp is owned by Major (Rtd) Anuar Adam and his sons Aldillan Anuar and Almiran Anuar. The family is the largest shareholder of Tadmax Resources Bhd, with a 26.2% stake, and also sit on the board of the property development company.

SW Land is owned by Sungei Wang Group Sdn Bhd, which has Abdul Jaliludin Jamaluddin as the largest shareholder with a 69.3% stake. Other shareholders include Simon Wee Howe Yew with 29.7% and Tan Peng Koon with 0.99%.

The RM700 million price tag for the 15.3-acre site translates to RM1,050 psf. In 2010, Gamuda Bhd paid RM820 psf or RM105 million to Wearne Brothers Properties Pte Ltd for the Robertson land, which is just next door to Plaza Rakyat.

In February this year, BBCC Development Sdn Bhd, a joint venture of UDA Holdings Bhd, Eco World Development Group Bhd and the Employees Provident Fund, paid RM1,183 psf for the 7.85ha Pudu Jail land.

The original Plaza Rakyat project, under Plaza Rakyat Sdn Bhd, was conceived as a RM1.5 billion mixed-use development, comprising a 79-storey office tower, 46-storey residential tower, 24-storey hotel and seven-storey shopping centre.

It was to be the country’s first property development integrated with a rail-based public transport system. The location, next to Pudu UTC (formerly Pudu Raya), provides an integrated land transport system for the project.

While Profit Consortium and its partner Guangdong Debao still have to go through certain procedures and processes before the redevelopment of Plaza Rakyat can begin, the buyers are hoping that their agony will end soon.

“We have been waiting for this project for almost 20 years. Some of the buyers have already passed away. I hope this time the project can take off and we can finally see our units being completed,” says septuagenarian Steven Yong, one of the buyers.

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Plaza Rakyat owners to get compensation from Profit Consortium

Plaza Rakyat owners to get compensation from Profit Consortium

Plaza Rakyat

KUALA LUMPUR (Oct 30): Profit Consortium Sdn Bhd will soon meet with the 211 Plaza Rakyat buyers to discuss compensation for the lots they purchased 20 years ago for the now defunct development.

Profit Consortium Sdn Bhd lawyer Derek Fernandez said the company had paid Kuala Lumpur City Hall a RM70 million deposit today for the purchase of Plaza Rakyat.

“As for the compensation for the buyers, Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor pointed out in Parliament yesterday that, even thought there might not be legal basis for their claims, the buyers will receive some form of compensation,” he said, after attending the sale and purchase agreement (SPA) signing ceremony between City Hall and Profit Consortium Sdn Bhd this morning.

The Malaysian Insider reported yesterday that City Hall was selling the land for the abandoned Plaza Rakyat project to Profit Consortium Sdn Bhd for RM740 million.

Profit Consortium is a privately held company linked to Major (R) Anuar Adam, who controls Tadmax Corp Bhd.

Tengku Adnan had told Parliament: “The selling price (of Plaza Rakyat) is RM740 million, of which RM700 million is for the outright sale of the land and RM40 million for the consortium to resolve the issue with the 211 buyers.”

He said agreeing a deal with the buyers was one of the terms included in the SPA.

“Actually, the 211 buyers do not have rights, because they purchased the property from Plaza Rakyat Sdn Bhd, which has gone bankrupt,” he had said.

Fernandez said that Profit Consortium had just taken over the project and it had to process compensation claims fairly.

“We will first have to set up a registry of buyers with their information. Then we will advertise in the media, as well as check with the City Hall database, and compile a list of buyers.

“The individual buyers will be contacted and they will have to present their documentation. The documents will then be assessed and owners will be categorised according to those who have legal grounds and those who don’t.

“Even so, those who don’t have legal grounds but will still be considered for compensation,” he said.

Fernandez said that Profit Consortium Sdn Bhd was expected to meet with the buyers early next year to discuss compensation.

“It is an obligation under the agreement to handle the legal claim of the buyers. We will follow the directives of the government and handle the compensation process.

“First, we need to get the names of all the buyers, then we can proceed from there,” he said.

Lot owner Steven Yong, 78, hoped Profit Consortium would look into the plight of the lot owners.

“We have been suffering for 20 years. We hope that Profit Consortium doesn’t drag this out but look into the buyers’ benefit,” he said.

Yong also said the owners would wait and see what Profit Consortium had to offer before accepting any agreement. -- The Malaysian Insider

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DBKL to sell Plaza Rakyat to Profit Consortium for RM740 mil, says Tengku Adnan

DBKL to sell Plaza Rakyat to Profit Consortium for RM740 mil, says Tengku Adnan

Plaza Rakyat

KUALA LUMPUR (Oct 29): The Kuala Lumpur City Hall (DBKL) will sell the land on which the Plaza Rakyat project was located to Profit Consortium Sdn Bhd for a consideration of RM740 million, said Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor.

He said that DBKL will sign the sale and purchase agreement (SPA) with Profit Consortium tomorrow when asked at the Parliament lobby today.

Profit Consortium is a privately held company linked to Major (R) Anuar Adam who controls Tadmax Corp Bhd.

Earlier, he told the Dewan Rakyat: "The selling price [of Plaza Rakyat] is RM740 million, of which RM700 million is the outright sale of the land and RM40 million is for them to resolve the issue with the 211 buyers."

He said that he has put a term in the SPA that the developer will resolve the issues with the 211 buyers.

"Actually, the 211 buyers did not have rights, because they purchased the property with Plaza Rakyat Sdn Bhd, which has gone bankrupt. However, we are a government that is concerned about its people and I decided that RM40 million to be allocated to resolve their problem," Tengku Adnan added.

He also said that the selection of a developer was carried out in a closed tender manner.

"We have carried out a closed tender process, and three companies bid for the project. A selection process was carried out, and the highest bid was chosen," he added.

Tengku Adnan said this in reply to Bukit Bintang MP Fong Kui Lun during the oral question session today.

Fong has asked the minister to state the reason DBKL still failed to revive the well-known abandoned project namely Plaza Rakyat until now and whether there is still hope that the project will be revived in the near future.

In response to this, Tengku Adnan said the Plaza Rakyat project has been abandoned since 1997 due to the financial crisis and financial problems faced by developer Plaza Rakyat Sdn Bhd.

The Kuala Lumpur Mayor has begun talks with a few parties during that period and undergone a long legal process to resolve the issue of Plaza Rakyat.

The site of Plaza Rakyat has been handed over to the City Hall in Nov 6, 2014 after the legal process.

Subsequently, a tender process was carried out to look for a suitable developer to revive the project. -- theedgemarkets.com

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After 15 years, Plaza Rakyat revival plans in final stages

After 15 years, Plaza Rakyat revival plans in final stages

KUALA LUMPUR (June 2): Kuala Lumpur City Hall (DBKL) is in the final stages of discussing plans to revive the Plaza Rakyat project in Jalan Pudu with Profit Consortium Sdn Bhd, the developer appointed to take over the long-abandoned building and give it a new lease of life.

Mayor Datuk Seri Ahmad Phesal Talib said both the Federal Territories and Urban Wellbeing Ministry and DBKL were happy with the appointment of Profit Consortium and all the parties involved were now looking at how to solve the pressing problems first.

Phesal said initially, DBKL was supposed to go into a joint venture with Profit Consortium Sdn Bhd, but it had agreed to have the developer to buy over the project.

"We are looking at all the possibilities to make sure both the developer and City Hall would benefit from the project," he said.

Phesal said both parties were also in the midst of discussing the technical elements of the existing building, including its structural and engineering aspects.

He also assured the buyers that they would be receiving the due compensation once all the details had been ironed out. 

"We are very serious about salvaging Plaza Rakyat. We hope to start the revival project as soon as possible," he said.

The Plaza Rakyat project, a mixed-use skyscraper complex, was stalled about 15 years ago when the then developer, Plaza Rakyat Sdn Bhd (PRSB), ran into financial difficulties during the 1997/1998 Asian financial crisis.

It was originally supposed to comprise a 79-storey office tower, a 46-storey condominium, a 24-storey hotel and a 7-storey shopping centre. The original Puduraya bus depot was also intended to be replaced under the project.

After 12 years, the government decided to terminate PRSB's contract and subsequently, the developer went into receivership and came under the administration of a consortium of lender banks.

Last year, the arbitrators who were involved in negotiations with PRSB and City Hall agreed that the local authority was lawfully entitled to terminate the agreement because of PRSB's non-performance and breach.

However, City Hall had to settle the RM200 million outstanding loans taken by PRSB and reimburse the company and the banks. There were several negotiations to reduce the amount, and in November, City Hall took over the vacant site.

Three companies had shown interest in developing Plaza Rakyat but the government had decided to go with Profit Consortium.

The revived development will include a mall, service apartments and offices, and will integrate the Plaza Rakyat LRT station.

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