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Saturday, August 21, 2010

Pros and cons of suburban malls

With so much shopping mall space already taken up in the Klang Valley, developers are turning toward building suburban malls in residential areas.

One such example is the new 470,000 sq ft SSTwo Mall along Jalan SS2/75, set to open in the fourth quarter of this year.

The imminent opening of the new RM180mil mall is causing some uncertainty among residents in that area.

Says a resident: “The development of this mall will cause traffic jams along the main roads. Also, parents picking up children studying in Sekolah Kebangsaan Taman Sea will add to the traffic. Security may become an issue if cars resort to parking in our housing area.”

She says the close proximity of Tropicana City Mall makes it difficult to understand the objective behind the development of SSTwo Mall.

Indeed, there are questions that should be asked about this new mall. For instance, Tropicana City Mall is located a stone’s throw away – why build another mall so close to it?

Both malls appear to be targeting a similar income group (the middle to upper household income bracket) and will attract customers from the same area, so surely SSTwo Mall will suffer from a lack of tenants or shoppers?

Henry Butcher Retail managing director Tan Hai Hsin rejects this notion. “At the moment, there is no large shopping centre in Petaling Jaya that offers one-stop retail facilities. SSTwo Mall could replace Jaya Shopping Complex as the retail icon of PJ,” says Tan.

What about the increasing number of shopping centres in the Klang Valley?

“Market saturation is irrelevant to this shopping complex. The challenges that SSTwo Mall faces are more localised, such as its ability to offer products and services different or better than its competitors, while staying relevant with its target customers,” he says.

This is also a view shared by Asian Retail Mall Fund II (ARMF II), the developer of SSTwo Mall. ARMF II is managed by Pramerica Real Estate Investors in Singapore.

“Malls are built to cater to segments of the population with varying needs and demands. For SSTwo Mall, we aim to become a community-centric establishment for the SS2 community, providing the residents with a comfortable venue to dine or shop with their families,” says a spokesman from ARMF II.

He says that the mall was designed with the surrounding residents and families in mind.

The residents living in the apartments directly along Jalan SS2/75 are the ones who will benefit the most from the new mall.

There are easily over 2,000 units of apartments along the same road and many of the residents are optimistic about the new mall.

“The opening of SSTwo Mall will be good for the community. It will be convenient for me to dine and buy groceries from the mall, especially if there is a new hypermarket. I will not have to go very far to get the things I need,” a resident from Five Stones tells StarBizWeek.

She says she understands the concerns of residents living in the houses nearby, and urges them to lodge their complaints over difficulties indirectly caused by the mall through the local council – a view shared by the developer.

The story of a mall in an area with different resident views is not a new one.

Malaysian Association for Shopping and Highrise Complex Management member Richard Chan tells of how the development of Atria Shopping Centre in Damansara Jaya had to contend with complaints from residents in 1990.

“Before Paramount Corp Bhd took over what was then known as DJ Centre, the shopping mall was in a mess. The mall was not fully occupied, it was facing competition from neighbouring retail outlets and worst of all, the mall did not meet the needs and wants of the residents, who were worried about the impact of the mall on the community,” says Chan.

“When we took over, we formed a resident association to allow residents to voice their complaints as well as promote discussion. It turned out that residents were worried about the impact of the shopping centre on the location of the night market or pasar malam. So we helped resolve their concern, while convincing the neighbouring shops that we were not a threat,” says Chan.

Paramount Corp’s assurance to the residents that the area would benefit from Atria Shopping Centre won them over, something the developers of SSTwo Mall will do well to follow. With a net lettable area almost 100,000 sq ft larger than Tropicana City Mall, and almost 2½ times larger than Centrepoint, it is fair to say that SSTwo Mall will definitely have an impact on the area immediately around it.

Whether the benefits of this new mall will outweigh its cost is yet to be seen. But the obvious conclusion is that there is a price to pay for development.

By The Star

Bolton's Puchong project to be fully developed by mid-2011

BOLTON Bhd's Taman Tasik Prima township in Puchong, Selangor, will be fully developed once the final phase is launched by mid-2011, comprising commercial and residential units worth RM650 million.

It will offer 3,000 units of terraced houses, serviced apartments, shops and a 250,000-sq-ft retail mall on a 8.1ha site, Bolton executive chairman Datuk Mohamed Azman Yahya said.

"It is in planning stage. The final phase will be exciting," Azman said yesterday after briefing the media on The Wharf, a prime commercial project worth RM450 million located within the township.

Bolton expects gross development profit of RM150 million from the final phase over seven years.
The Wharf has 32 blocks of three-storey boutique showroom stratified offices known as BizWalk, 1,002 units of serviced apartments in three blocks, 64 terraced residences and a 302,739-sq-ft retail mall.

Bolton will launch BizWalk this weekend. The showroom offices come in lot sizes of 25ft by 75ft and 39ft by 75ft, each priced from RM2.2 million.

Azman is bullish on sales. "We expect it to be very well received. The market is currently robust. I think it will probably hold for a while," he said.

The mall, worth RM100 million, is expected to be completed by early 2013.

Azman said it is considering to sell it to a retail operator.

He also said that he is confident that the company's sales in current fiscal year will touch RM500 million, helped by new projects.

"We see that for investment opportunities, people still prefer to invest in properties. We see a lot of buying interest from Japan, Singapore and China.

"This year we are getting five to six projects up. A bulk of the earnings will come in a year later, so going forward, earnings would be better," he said.

In the year ended March 31 2009, Bolton posted a net profit of RM18.3 million on revenue of RM292 million.

Its new projects, due to be launched in Kuala Lumpur this year, include SixCeylon at Bukit Ceylon, Arata at Kenny Hills and 51 Gurney at Persiaran Gurney.

Bolton has 240ha of land in Kuala Lumpur, Penang, Kedah and Negri Sembilan, with expected gross development value exceeding RM2 billion.

By Business Times

City’s newest hotel enters the landscape

KUALA Lumpur’s newest hotel, Doubletree by Hilton, opened its doors just before the dawn of Ramadan to welcome guests to a casual and relaxed evening of food, drinks and music.

The excitement of its opening was seen on faces of staff, who worked tirelessly to prepare Hilton Worldwide’s latest hotel to fit into the city’s landscape of international hotel chains.

The landmark location at the busy junction of Jalan Tun Razak and Jalan Ampang welcomed hundreds of guests including officials from embassies, business leaders, company executives and the media to its opening at the grand ballroom.

Hotel general manager Ian Barrow said the first Doubletree property in South-East Asia started off as a dream but its opening signalled the reality of being able to offer Doubletree’s services to guests.

Dive in: Tosca overlooks the pool on the 10th floor of the hotel.

Barrow thanked his team for their effort in readying the hotel for the event and also spoke of the famous chocolate chip cookies that was served hot to check-in guests at the front office.

Doubletree by Hilton Hotels global head Rob Palleschi said Doubletree’s opening was an important milestone for their collection of more than 230 hotels and resorts.

“This hotel in the heart of one of South-East Asia’s most important cities truly demonstrates the refreshing sense of contemporary style and personalised service Doubletree by Hilton continues to pursue and present to the world’s travellers, wherever they stay with us.

“With five hotels now open in important business centres and attractive leisure destinations across Asia and many more deals under negotiation, the Doubletree by Hilton brand continues to gain momentum as a lucrative branding opportunity for owners and developers, which is both flexible for new-build and conversion purposes in the upscale, full-service hotel segment,” he said, adding that the property was the 235th Doubletree property in the world.

Following the short speeches, diners were feted to an array of sumptuous food from Makan Kitchen, Tosca, Cellar Door, Axis Lounge and The Food Store.

Sweet find: Treats of desserts for the guests.

Easily identifiable as the hotel’s pride among the restaurants, Makan Kitchen has a seating capacity of 350 and promises a true Malaysian dining experience.

This dining venue has three live interactive kitchens, featuring Malay, Chinese, Indian, Ibanese, Nyonya and Kristang cuisines.

Besides the food, the exciting change in landscapes from an authentic Iban longhouse setting to the traditional Peranakan style was a feast for the eyes.

Near the pool, one will appreciate Tosca for its roomy elegance, open-door concept and home- style Italian cuisine.

Cellar Door gives diners the luxury of selecting their preferred wines while Axis Lounge at the ground floor is the place to relax for drinks.

The Food Store on the other hand offers the option of having a light meal.

Guests were also taken on guided tours to view the hotel’s facilities.

While Lewis Pragasam and Asia Beat provided the laid-back music, ‘treemen’ were spotted dressed in camouflage as they went about in pairs and obliged for photographs to be taken.

The 34-storey property which rises high in the city’s skyline has 540-guest room.

Managed by Hilton Worldwide, the hotel is owned by MGPA Asia Fund II and is part of a world-class integrated property called The Intermark.

Besides the hotel, The Intermark also has on site a Retail Podium, and a grade A office tower. Another project, an office building, is scheduled for completion in 2012.

By The Star

Redeveloping Kampung Baru

After a number of false starts, there are some signs that the plan to redevelop the 110-year-old Kampung Baru could finally come to fruition.

For one, a bill in parliament that seeks to create a new body aimed at overseeing the development of Kampung Baru, the oldest Malay settlement in Kuala Lumpur.

There is also indication that sometime this year parliament would also consider amending laws that prohibit non-Malays from leasing or occupying land in Kampung Baru.

But it is far from a done deal and the issue of Kampung Baru remains an emotive and tricky one. Numerous challenges therefore remain.

Kampung Baru is made up of 378.93 acres, the bulk of which is under Malay reserve land. It is estimated that there are 4,300 lot owners in Kampung Baru, spread across seven villages.

It has a long illustrious history as part of the Government’s effort to promote Malay settlement in the capital city. Set aside as a Malay Agriculture Settlement reserve on Jan 12, 1900, it is one of the last remaining neighbourhoods in the city with a distinctive Malay traditional houses and way of life.

Located in the shadows of the Petronas Twin Towers, it is an anomaly of a traditional and largely undeveloped residential enclave surrounded by gleaming high-rise office and residential buildings.

A drive around the settlement shows mostly traditional Malay houses and low-rise shop houses and apartments. The roads are narrow and many of the houses are built close to each other.

Strong political will

Prime Minister Datuk Seri Najib Tun Razak announced in early February that Kampung Baru will be redeveloped under a concept that will not require relocation of the residents and landowners. He said the residents and landowners will have the right to determine the form of development to suit their requirements.

Datuk Nur Jazlan Mohamed ... ‘There must be a mix in the new Kampung Baru.’

A bill on the setting up of Kampung Baru Development Corp (KBDC) is to be tabled at the next parliament seating. It is now at the drafting stage.

The main role of KBDC is to be the development agency to monitor, coordinate, supervise and act as a mediator between the developers, landowners and shareholders.

Despite the Government’s commitment, not all the 4,300 lot owners are lending their support.

Some object to the very idea of letting non-Malays lease property in Kampung Baru. Others are asking for very high prices for their land. In the past, they have asked for RM1,000 to RM2,000 per sq ft (psf) .

According to some valuers, development land in Kampung Baru is fetching between RM200 and RM350 psf now, with a very small number of sales hitting above RM500 psf, according to property valuers.

In fact, previous attempts to revamp the Malay reserve settlement have failed due to difficulties in getting consent from the owners and beneficiaries. The situation is compounded by Muslim inheritance laws that split the parcels into smaller plots.

The key ‘must haves’

What will it take for the Kampung Baru redevelopment plan to work out this time?

According to property consultants and valuers, one of the foremost pre-requisites is a strong political will from the Government and its implementation must be government-driven. There must also be a review or change existing laws that prohibit non-Malays from leasing or occupying land in Kampung Baru. There must also be a comprehensive master plan, experts say.

One person who has been keeping a close tab on what is going on at Kampung Baru is Datuk Abdul Rahim Rahman, executive chairman of real estate consultancy Rahim & Co.

The senator, who has recently made a presentation on Kampung Baru to the senate, stresses the need to establish the KBDC and removal of restrictions for non-Malays to lease or occupy the properties.

“As the development agency, KBDC should spearhead the development (but should not have approving power),” he tells StarBizWeek.

The change to the law on land ownership restriction in Kampung Baru to allow non-Malays rent or occupy properties there is expected to be raised in parliament by the end of this year, he adds.

Abdul Rahim explains that the restricted Malay title of the land and properties in Kampung Baru means it can only be sold to Malays and this has made Kampung Baru hard to develop as the market is restricted.

“The law not only restricts the sale of properties to non-Malays but also disallows them from renting or occupying the premises there.”

UDA Holdings Bhd chairman Datuk Nur Jazlan Tan Sri Mohamed echoes Abdul Rahim’s views.

He says if the bumiputra label is not removed, “the quality of whatever being built will be lower and it will immeditely draw a discount and in the long term, the potential for it to increase will be limited.”

“So there must be a mix in the new Kampung Baru. There must be a mix of races so that value may be added to it. There must be a combination of buyers with different purchasing power and a combination of forces with different objectives to give it some commercial attraction. Unless this takes place, the value of Kampung Baru land will be limited,” he emphasises.

James Wong of VPC Alliance, a property valuation firm, concurs that the full market potential of Kampung Baru will not be realised as long as land in Kampong Baru remain as a Malay reserve.

“There must be a balance between maximising the market value of the land and retaining its Malay identity. If condominiums cannot be built and sold to foreigners and high net worth individuals, condominium prices in Kampong Baru will never match those around the KLCC or even Mont’Kiara. This same argument is applicable to office blocks, shopping malls and all other investment grade properties,” he says.

Development model

Abdul Rahim says the master plan for Kampung Baru must be at par or better than that for Kuala Lumpur’s golden triangle area.

“The aim should be to make Kampung Baru into one of the main commercial areas in the city centre. One of the key considerations in the master plan is to determine the land value to clear any confusion among the landowners, how the land owners should participate in the redevelopment, and participation of government-linked companies.”

The right redevelopment model will be to turn Kampung Baru into an international commercial hub with Malay architectural features to retain the Malay history and heritage, Abdul Rahim adds.

Abdul Rahim says that to “kickstart” the development, it is necessary to identify a central core area of 10 to 15 acres to be developed into office buildings to house government entities, and other supporting facilities like retail complexes, hotels and shops.

‘’Instead of developing the whole area concurrently involving more than 4,000 landowners, it will be more viable and manageable to start with a core area.

‘’Once the core area is successfully developed, it will encourage other landowners to participate in the development of the surrounding areas,’’ he adds.

Wong, who is the past president of Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, also stresses the need for a comprehensive master layout plan with clearly defined plot ratios, approved land uses and building heights.

He says it is also necessary to amalgamate the existing small land plots into economic parcels for redevelopment but foresees that it will not be an easy task as the majority of the land in Kampung Baru are fragmented and in multiple ownerships.

“If all else fail, the Government may have to wield the Land Acquisition Act (1960) to compel the land owners to sell their land,” Wong points out.

CB Richard Ellis executive director Paul Khong says the Government may need to implement new redevelopment laws like in Singapore whereby the same concept of consensus from 80% of the residents to a redevelopment proposal will compel the 20% who are not in agreement to accede to the majority.

“But until this is legally in place, the only mechanism available now is the Land Acquisition Act. Under Section 3 of the Act, the land administrator can acquire any land for either public purposes or by any person or corporation for any purpose which in the opinion of the state authority is beneficial to the country’s economic development or to the public generally. Under this provision, the government can legally approach the redevelopment exercise,” Khong explains.

Meanwhile, a property developer says that all plans with regard to the redevelopment of Kampung Baru should be communicated well to the residents there. “The government must tell the people their plans, and how the landowners will benefit from these plans. The people must know that they are not being taken advantage of,” he says.

He adds that the land ownes should be offered a premium for their land as well as the first right to buy into an apartment or office building that is being planned there.

By The Star

What Kampung Baru land is worth

Although land and property values in Kampung Baru have been “locked up” for a very long time and lagged far behind those in Kuala Lumpur’s inner city, property valuers concur that the redevelopment of the oldest Malay settlement in the city should augur well for the landowners.

“The redevelopment will unlock the value of the land and it will be a windfall for them,” VPC Alliance (KL) Sdn Bhd managing director James Wong says.

Wong says it will be difficult to determine a fair long-term value for the Kampung Baru land at this stage as a large percentage of the land will have to be set aside for infrastructures and other services, which will affect the weighted average land value of the land and property.

“The transaction value of development land in Kampung Baru land is in the range of RM200 to RM350 per sq ft. The quantum of appreciation for the land will depend on the implementation policies of the Kampung Baru Development Corp and legislations on how non-Malays and foreigners can participate in the development as well as occupy or buy the completed properties there,” he explains.

Rahim & Co Chartered Surveyors Sdn Bhd executive chairman Datuk Abdul Rahim Rahman stresses the importance of determining the land value to clear any confusion among the landowners.

He says steps are now being taken to value the land and properties in Kampung Baru by both the Government and private valuers.

“With the redevelopment, the land and property value may go up by 100% or more,” he adds.

Abdul Rahim says it will be better to develop Kampung Baru parcel by parcel based on the appropriate land use zoning instead of by lots, adding that local developers can act as development partners to the GLCs.

Wong says that to unlock the value of the land, the Malay Enactment Act needs to be amended to allow long-term leases to be created for non-Malay developers to jointly develop the land with the landowners or the designated government-linked companies.

The Act, which governs Malay reserve land in the respective states, says that the land can only be developed by and sold to Malays.

“It will be necessary to attract non-Malay developers to jointly develop Kampung Baru as they will be able to lend their resources and expertise and share out the costs and risks.

“As demand catches up with supply in the future, the potential new supply at Kampong Baru will be good for the continued growth and development of Kuala Lumpur as a whole,” Wong adds.

CB Richard Ellis executive director Paul Khong says if the Government decides to acquire the Kampung Baru land, there must be a huge budget allocated to finance the entire acquisition exercise first before even redeveloping the land.

“The compensation payable will be very substantial based on development land in the locality being transacted at between RM200 and RM350 per sq ft, and a small number of sales (closer to Sultan Ismail) hitting above RM500 per sq ft. A rough indication of compensation (based on RM500) will be RM500 (per sq ft) x 375 (acres) x 43,560 (sq ft) = RM8.2bil,” Khong says.

He adds that under the Land Acquisition Act 1960, Section 2A of the First Schedule on Determination of Compensation states that in assessing the market value for a Malay reserve land, the fact that it is a Malay reserve land shall not be taken into account except where the scheduled land is to be devoted, after the acquisition, solely for a purpose for the benefit of the persons who are eligible to hold the land under such written law.

“This basically means the acquiring party will have to pay full market value for the land now via the Act, which is over and above what is being transacted in the local market,“ he explains.

Khong says a classic example of such exercise involved the acquisition of Penchala Link for the Sprint Highway where the authorities had to pay full market value (RM70 to RM100 per sq ft) for the Malay reserve land which was actually worth half the value at that point of acquisition in the open market.

He points out that the acquisition party may be faced with a mammoth task to deal with the huge number of landowners.

“One land title could easily have 30 to 100 co-owners now if it has been handed down the generations following the Muslim Inheritance Laws, and given the large area involved, of more than 300 acres, it is quite a Herculean task.”

Also, some of the landowners may not agree to the quantum of compensation payable and may drag the matter to court, says Khong.

“If the values then get out of hand and the compensation payable is too huge, the project may then be no longer economical to proceed.

“Ultimately, the project financial must be viable and, in real commercial terms, it has to also work. Market forces will prevail at the end of the day,” he adds.

By The Star

What the landowners, residents say

Separated by a highway, Kampung Baru is isolated from the progress and modern niceties of the city.

The Government’s decision to redevelop Kampung Baru, a Malay reserve enclave in the heart of Kuala Lumpur, has met with mixed reaction from the landowners and residents who have lived there for many generations.

Based on a valuation done on a 55ha site in March 2007, the land was valued at between RM270 and RM300 per sq ft for housing and RM500 and RM600 per sq ft for commercial lots.

Dr Yusof Ismail ... ‘We support the Government’s decision but we want to know what type of mechanisms it will implement.’

As the land is now worth billions of ringgit, it has caused a lot of concern among the Kampung Baru folks about their future.

“We want to know about our future and what the benefits will be for the landowners if this proposed redevelopment by the Government materialises,” says Kampung Baru Development Association president Dr Mohd Yusof Ismail.

Meeting him recently at the Kampung Baru mosque during the normal busy afternoon during Ramadhan where traders are busy selling food for breaking-fast, the Cornell University PhD scholar talks passionately about the current situation and the feelings of Kampung Baru folks to StarBizWeek.

“I was appointed as president of the association about a month ago and my main task now is to be the voice on behalf of the landowners of Kampong Baru. We support the Government’s decision to redevelop Kampung Baru but we want to know what type of mechanisms the Government will implement,” he says.

Mohd Yusof says meetings among associations, landowners, residents and the Government have been held a few times since the draft of the Kuala Lumpur City Plan 2020 was unveiled in 2008.

“The draft is the starting point of the seriousness by the Government to focus on the redevelopment of Kampung Baru. What the landowners of Kampung Baru want to know is how much they will get from the value of their land and what is going to happen to their land rights,” he says.

At one of the meetings, a proposal to have 60:40 land ratio for Malays and non-Malays was brought up and Mohd Yusof says he was the first person to object.

“However, we agree that properties can be leased or rented out to non-Malays, but there should not be any transfer of titles or ownership. Kampung Baru represents a symbolic presence of the Malays in the capital city. Therefore, it belongs to all Malays in the country and that interest should be safeguarded at all cost,’’ he says.

He says that matter has already been solved when the Government retracted the proposal.

There were three components to the redevelopment plan; one of it is that the Cabinet has agreed that Kampung Baru will be developed comprehensively.

Secondly, that a Kampung Baru development corp will be formed and a bill tabled in parliament to allow for the setting up of the corporation by the end of the year and finally, only a government-linked company will be involved in the project.

It is understood that Permodalan Nasional Bhd has been selected to be the lead developer for Kampung Baru and reports say international real estate valuer Rahim & Co will be appointed to revalue the land.

“If Rahim & Co is appointed for the valuation, they will do it on behalf of the Government. What will happen to us then is we also need to do the valuation from our side so that it will be fair. We may appoint an international valuer.

Mohd Yusof also reveals information he has gathered for the fair basis price of each sq ft in Kampung Baru compared to surrounding areas such Kuala Lumpur City Centre, Jalan Yap Kwan Seng and Jalan Tun Razak.

He believes the price of the land shall be about RM1,000 per sq ft and above.

“To say the price of the land to be only RM350 per sq ft is something unacceptable, whereas the land around Kampung Baru is worth more than that,” he says.

He, however, admits the re-development of Kampung Baru is going to be a long process.

On the measures the Government may undertake, based on the current law, he says the better option to the landowners is either to sell entirely or a portion of the land to the Kampung Baru development corp.

“This, however, needs to come with an attractive price for the landowners to agree,” Mohd Yusof says.

The proposed setting up of Kampung Baru Development Corp by the Government is to protect the interest of the owners and their heirs.

It will also responsible to ensure the owners and heirs receive the fairest deal possible no matter the type of development.

Despite the support from Mohd Yusof and Kampung Baru Development Association on the proposed redevelopment of Kampung Baru by the Government, there is still some reluctance among landowners to agree with the redevelopment.

A landowner let off some steam when asked on his opinion on the proposed redevelopment of Kampung Baru.

“Do you think RM1mil or RM2mil is really worth it. What will happen to our next generation? You think you can bring the money with you when you die?” he says.

By The Star

Origin of the place

KAMPUNG Baru took shape in the late 19th century on 227 acres next to the Klang River just outside Kuala Lumpur. It was one of the projects by the British administration.

The main objective, says historian and academician Tan Sri Prof Khoo Kay Kim, was to provide a place near the town centre where the Malays could live quite cheaply.

By Jan 12, 1900, the Selangor Resident gazetted the area as Malay Agricultural Settlement. Rules were drawn up by the Resident under the Land Enactment 1887 to manage the area and to keep the settlement entirely Malay.

The Rukun Tetangga building just outside Masjid Jamek Kampung Baru in a picture taken in 1982.

The British thought that by building a village setting, they would be able to induce them to come to cultivate paddy. But the ones who came were not the ones who wanted to cultivate the land. They were mainly traders. And because they did not want to leave their village environment, they did not work in the mines or estates.

The land was said to be “partly high flat land and partly swamp” which accounts for the presence of crocodiles. It was also prone to floods. In the early days, each occupant held about quarter of a hectare. Among the first to take advantage of the place were the peons and messengers employed in government offices. The bullock cart drivers, mainly from Malacca, also arrived, followed subsequently by Javanese and Sumatrans.

At that time, transport was crucial. Already, the Malays were rowing the sampans up and down the Klang River to transport goods to take to the interiors for the miners, who were predominantly Chinese.

Gradually, that mode of transport died when the railway arrived in 1886. By 1912, buses and lorries came. The first car came at about 1900.

Although the settlement grew in terms of population, there were problems with sanitation and other issues.

The population grew by a third in five years from 2,600 in 1928 to about 3,500 in 1933. Along with this growth, land ownership became increasingly fragmented. From the initial 196 holdings in 1904, there are today 1,792 lots comprising both Malay Agricultural Settlement and the Non-Malay Agricultural Settlement land like the Dang Wangi and Chow Kit area. From a purely agricultural settlement where land is accounted for in terms of lots, there are today strata titles because low-rise and high-rise exist together with traditional Malay houses.

By The Star

Coming up with a fair and equitable solution is not easy

Talk of developing Kampung Baru is not new. Different prime ministers since Tun Dr Mahathir Mohamad have talked about it. These have remained mere words. This time around, things seem to be moving more definitely.

The daunting challenges faced by past administrations when it comes to developing Kampung Baru remain unresolved until today.

A walk around the community and conversations with the residents reveal the challenges facing the Najib administration if his plans for development are to go ahead. The first is that the holdings are small, averaging about 10,000 sq ft. Development is not possible unless pieces of land are combined together.

The second problem is multiple ownership. One 16,000 sq ft of land belongs to 12 owners. Several years ago, UDA Holdings Bhd, which were doing studies on the area, found that a quarter acre has 72 owners. On average, there are between four and 10 owners for a housing plot.

A third problem is the uniqueness of Malay Reserve Land. As the name implies, only Malays can live and own it. The difference between Kampung Baru and other tracts of Malay Reserve Land like Datuk Keramat and Sg Pencala area is Kampung Baru was specifically built by the British to house the Malays in Malaya’s pre-Merdeka Days. This means that in order for non-Malays to live or buy properties there, laws must be changed.

While these are the three main challenges that may scupper the government ambitions for enclave, there are other underlying issues at stake.

While Kampung Baru is largely tenanted today, there are those who have lived there for three to four generations. Although many of them have sold their properties during the 1980s, many have held on to their properties for rental income while they seek another lifestyle in more contemporary surroundings.

Because the land size averages about 10,000 sq ft, this enables landowners to built concrete houses large enough to accommodate between four and six families. These “new” properties are referred to as “rumah yang ada empat atau enam pintu” (a house with four or six doors), which essentially means a house with four to six households, each family taking two rooms and sharing the common space like kitchen, living area and possibly washrooms. While there are still many elevated Malay-styled houses on stilts which are typical out of a kampung scene, there are also a number of these multiple tenanted concrete housing.

The compensation is considered as a one-off windfall, while rental is a recurring source of income for them. Their ownership also remains intact.

Unless the Government is able to give them satisfactory compensation using some acceptable and transparent formula, coupled with a recurring source of income, as well as first right of purchase of properties at a price they consider as “reasonable”, they may not part with their inheritance. Even if 90% agrees to sell, it would still scupper whatever plans the Government may have, unless that 10% is located at the peripheral.

Although money is a strong incentive, because these are family homes for generations, these personal sentiments do not come with a price tag. They want development, but they also want their land rights to remain intact.

The Government has announced its intention to develop various pieces of land in and around Kuala Lumpur, some of which post far fewer challenges than does the Kampung Baru project.

The other issue is compensation. Landowners do not understand why their land is valued at between RM200 and RM300 per sq ft just because it is Malay Reserve Land when it is located smack in the city. They benchmark their land against the vicinity of Jalan Kia Peng, Kuala Lumpur, which is about RM1,000 per sq ft and the Kuala Lumpur City Centre, which is about RM2,000 per sq ft.

The Government will have to come up with a fair and equitable solution, which is easier said than done. It is a project with far larger implications than just benefiting the land owners and residents.

Assistant new editor Thean Lee Cheng thinks the stake for developing Kampung Baru is very high.

By The Star