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Wednesday, October 20, 2010

Consultants: Need to gauge potential impact of 100-storey Warisan Merdeka

Map showing Warisan Merdeka project site

PETALING JAYA: Developers and property consultants have urged the Government to commission extensive and in-depth feasibility and market studies on the proposed 100-storey Warisan Merdeka to gauge its cost-benefit and potential impact on the property market before proceeding with the project.

Construction of the skyscraper, which is part of the RM5bil mega project within the enclave of Merdeka Stadium and Stadium Negara in Kuala Lumpur, will start next year and is expected to be completed in 2015.

Disclosing the project in his Budget 2011 speech last Friday, Prime Minister Datuk Seri Najib Tun Razak said the two stadiums would be retained as national heritage buildings.

Real Estate and Housing Developers Association Malaysia (Rehda) deputy president Datuk FD Iskandar Mohamed Mansor said the plan for the potentially high-impact commercial development must take into consideration demand and supply of office space in the capital city.

He said such a massive project should be approached with caution and proper feasibility studies before proceeding.

“Kuala Lumpur already has a focal point – the Petronas Twin Towers – and the question is whether it is necessary to have another one. Moreover, there is enough office space in the city. Additional space from the Warisan Merdeka and other projects, including the RM26bil Kuala Lumpur International Financial District (KLIFD), may result in an oversupply of commercial property space,” Iskandar said.

Official figures from the National Property Information Centre show that occupancy rates of office space in Kuala Lumpur and Selangor averaged around 80%.

“What is more important at this point is for a holistic and comprehensive public transport system for Greater Kuala Lumpur that will integrate the proposed mass rapid transit project to the feeder transport network, including the buses and taxis, that also needs to be improved. It is one of the basic imperatives for KL to achieve world-class city status,” he added.

Amphil Corp Sdn Bhd chief executive officer PK Poh said the iconic projects planned by the Government were intended to fulfill national imperatives “to serve a bigger and higher purpose,” and should not therefore be looked upon as a pure property play.

Poh said the implementation and timing of the project would have a serious impact on the local property market in terms of the allocation of resources and the effect on current and future vacancy rates in the capital city.

“As such, it would be good if such super mega projects be demand-driven as well, in addition to fulfilling the national agenda.

“Based on what I observe overseas (including the Shanghai Financial Centre, Canary Wharf and Burj Khalifa), super mega projects there needed to go through at least one recessionary cycle.

“Our own Petronas Twin Towers were in fact completed in the teeth of such a recession. Therefore, the timing of, and preparation for, when the project should take off is of utmost importance, and requires truly extensive and in-depth studies,” Poh said.

He also pointed out that projects such as Warisan Merdeka and the KLIFD could straddle the property cycle.

“There is a real danger of these projects ‘crowding out’ other developers’ projects when the construction of this and other iconic projects starts. Prices of materials will tend to rise, thus making projects more expensive for all concerned.”

Property consultancy CB Richard Ellis Sdn Bhd executive director Paul Khong said a proper market and feasibility study should be professionally undertaken to determine the right mix of development, the commercial viability of the entire project, the future demand for the products offered within the project and also the theme of development which should really be featured around the heritage elements of Merdeka Stadium.

Responding to questions on the project yesterday, Najib stressed the Government did not instruct Permodalan Nasional Bhd to construct Warisan Merdeka and that it was the company’s board of directors that had wanted to embark on the project.

He said the construction work on the project would generate many economic activities.

“The area will be a business centre for both the bumiputra and non-bumiputra alike. It can be one of Malaysia’s attraction that will generate and bring profit. This project is not a waste,” he stressed.

By The Star

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