While the recent land deal in the Bukit Bintang shopping district in Kuala Lumpur is so far the highest in terms of price fetched, it does not represent the current land market in the city, said some valuers.
The 29,127 sq ft parcel was purchased by Urusharta Cemerlang (KL) Sdn Bhd for a premium price of RM210mil or RM7,209.80 psf.
Situated between the Pavilion KL mall and Grand Millennium Kuala Lumpur hotel, the site was previously intended for a RM500mil-serviced apartment project, which comprises a 42-storey block called Millennium Residences.
The sale “is unexpected and it cannot be construed to represent the entire market”, said Paul Khong, executive director of CB Richard Ellis Sdn Bhd.
“This price has to be read together with the fine prints in the sale and purchase agreement,” Mr. Khong said in an interview with StarBizWeek.
“From the face value of the transaction, we note that this is a small parcel of land and there is an element of ‘special purchaser’ in the transaction. The buyer owns the land next door and is therefore willing to pay more as ‘marriage value’ for the plot.”
“The quantum of premium given is up to negotiations between the parties. Other details of the sale has not been made available like payment structure, completion date, exit clauses and other special terms,” he added.
Anthony Chua, director at KGV-Lambert Smith Hampton Sdn Bhd, agreed.
While it was a record price for a land deal in the city centre, “but it is unique to this particular piece of land; being the last empty lot in the prime location of Jalan Bukit Bintang”, said Mr. Chua.
“It is acquired by a special purchaser who is willing to pay a premium for it, as the land’s value is tied to the buyer’s existing real estate, Pavilion KL, located adjacent to the land.”
“There is synergistic advantage to use the land for the expansion of its Pavilion KL development, and the reason may also to prevent competitors from getting into its market foothold,” added Mr. Chua.