FOLLOWING an increase in plot ratio and change in land use under an amendment to the Kuala Lumpur City Plan 2020, a 19.14-acre parcel adjacent to Istana Negara in Kuala Lumpur — equally owned by Jakel Group, Symphony Life Bhd and Permodalan Nasional Bhd (PNB) — has potentially risen in value by more than 40% since it was purchased six years ago.
The 833,665 sq ft tract in Jalan Semantan facing Jalan Tuanku Abdul Halim (formerly Jalan Duta) (see map), which was purchased for RM646 million or RM775 psf, may now be worth as much as RM917 million or RM1,100 psf, industry experts say, notwithstanding the current soft property market.
Stanley Toh, executive director of real estate and valuation firm LaurelCap Sdn Bhd, tells The Edge that a year ago, Dewan Bandaraya Kuala Lumpur (DBKL) changed the zoning for the land from residential and main commercial (residensi dan perdagangan utama) to mixed development (pembangunan bercampur). DBKL also increased the density from 80 persons per acre (for the residential portion) and changed the plot ratio of 1:4 (for commercial) to 1:5 for the entire parcel.
“This means the entire parcel of land has been rezoned for mixed development (residential and commercial) at a higher density plot ratio of 1:5. The changes will allow the developer to build more commercial or residential space as compared to before,” Toh explains. Consequently, the value of the land will increase with the allowable plot ratio or density.
“DBKL has also proposed a new dispersal road within the site to ease traffic along Jalan Semantan and Jalan Tuanku Abdul Halim (see map),” he adds.
Toh pegs the land value at between RM900 and RM1,100 psf, which prices the tract at between RM750.30 million and RM917.03 million.
The freehold land — comprising a total of six plots — was originally purchased by Jakel Land Sdn Bhd, whose name was subsequently changed to PJS Damansara Sdn Bhd. The six plots have since been amalgamated into one parcel known as Lot 481123.
A document sighted by The Edge reveals that PJS Damansara had on June 29, 2022, started the process to obtain a development order for a mixed-use development on the site. It obtained conditional approval of its layout plan from DBKL on July 19.
Sources say PJS Damansara’s planned mixed-use development will have a gross development value of between RM5 billion and RM6 billion. It is understood that the developer, who plans to include residential, offices, retail and possibly a hotel component, hopes to launch the first phase in the third quarter of 2023. A new dispersal road will also be added.
On the changes to zoning, VPC Alliance Malaysia managing director James Wong points out that although the plot ratio of the land was increased from 1:4 to 1:5 under an amendment to the KL City Plan 2020, the close proximity of the subject land to Istana Negara poses an issue. As it is within a 800m radius from Istana Negara (within Area 1 of Istana Negara’s height control guidelines), the proposed buildings on the site cannot exceed 400ft in height above the mean sea level.
“Hence, despite the increase in the plot ratio to 1:5, the developer will not be able to build to the maximum height allowable to maximise the plot ratio of 1:5,” Wong stresses.
Toh adds that due to the height restrictions, the developer will need to strike a balance between maximising the plot ratio and maintaining the height limit set by the local council.
“Taking into consideration the height control due to its proximity to the Istana Reserve, its large land size of 19.138 acres, the approved layout plan and the fact that accessibility to the site needs to be improved, our opinion of the current value of the subject land is RM900 psf,” Wong says.
Even so, he observes that the weak property market notwithstanding, the land enjoys a 15% increase from its original price.
It is worth noting that the Ministry of Finance (MoF) had initially invited bids for the land on March 8, 2016, at a plot ratio of 1:6. A reserve price of RM833.3 million or RM1,000 psf was set, and the tender closed on April 6. Soon after, another tender was called again, but at a lower reserve price of RM900 psf and a plot ratio of 1:5. It was reported that the plot ratio had been lowered possibly due to height restrictions owing to the proximity of the site to the palace as well as limited accessibility via Jalan Semantan. The closing date for the second tender was May 9, 2016. It is unclear why and when the plot ratio was further reduced to 1:4 before being amended to 1:5.
The Companies Commission of Malaysia’s website lists the directors of PJS Damansara as Mohamed Faroz Mohamed Jakel and Mohamed Nizam Mohamed Jakel (from Jakel Group), Rizal Rickman Ramli and Mohamad Idros Mosin (from PNB) and Chin Jit Pyng and Kong Kwai Ching (from Symphony Life).
As at June 30, 2021, PJS Damansara had total liabilities of RM749.11 million, of which RM57.28 million was current.
