Doing some rough calculations, Hall Chadwick Asia Sdn Bhd chairman Kumar Tharmalingam said the RM628mil expo centre it was going to build in exchange for 65 acres (or 2.77 million sq ft) of state land means that it was effectively getting the land for RM226 per sq ft.
“RM628mil is not a lot to pay for a expo/convention centre,” Kumar said. Singaporeans will be presented with Genting Group’s S$6bil convention centre on Sentosa Island in January next year.
This will be followed by Las Vegas Sands’ S$5.2bil project on Marina Bay in April. Both of these come with a casino.
But convention centre aside, in terms of land cost, the deal has piqued the curiousity of people in the property sector.
Sources valued the state land, when converted to commercial land, at between RM350 to RM500 per sq ft.
“RM500 may be a bit on the high side, but it makes sense. The total gross development value (GDV) of all the projects on that 65 acres is going to be RM15bil. That means the market value of that commercial land of 65 acres is RM1.5bil,” Kumar said.
A source who declined to be named said at RM500 per sq ft, the land cost would comprise 10% of the total GDV of RM15bil that Naza is undertaking. In Singapore, the land cost can go up to 50% of GDV, in Hong Kong, it is 65% of total GDV.
“If it is valued at RM350 per sq ft, the cost of land is about RM970mil. So it is around that range,” Kumar said.
On whether it is fair to compare with Singapore and Hong Kong, two countries that have among the highest real-estate prices in the region, the source said it was important to have some sort of yardstick.
“Singapore is our neighbour and they are building convention and expo centres too. So are we, with this deal,” the source said.
He said several deals comprising land area of between two and three acres were done in the Jalan Ipoh area at RM600-plus per sq ft this year.
“Because these are small pieces of land, on a per sq ft basis, the price would be higher. Over in Mont’Kiara, transactions this year were done at between RM200 and RM300 per sq ft,” he said.
Naza’s latest trophy, which is one of several, is sited behind Matrade and stretches right up to the government quarters. On a broader scale, that piece of land straddles Mont’Kiara and Segambut on one side and Jalan Duta-Jalan Kuching on the other side.
By The Star (by Thean Lee Cheng)
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