KUALA LUMPUR (Aug 12): Affin Holdings Bhd said the purchase price of RM255 million, or RM4,699 per sq ft, for a 54,266-sq-m plot of land at Tun Razak Exchange (TRX) here represents a discount of RM6 million or 2.3% to the market value of the property of RM261 million.
It said the market value of RM261 million was appraised by independent valuer, C H Williams Talhar & Wong as at April 3.
Affin, via its wholly-owned subsidiary Affin Bank Bhd, is buying the parcel of land in TRX from debt-laden 1Malaysia Development Bhd (1MDB) to develop its new head office.
In a filing with Bursa Malaysia today, Affin said the valuation for the property had been carried out using the comparison method and residual method of valuation.
The comparison method of valuation entails analysing recent transactions and asking prices of similar properties in and around the locality to arrive at the market value.
The residual method, meanwhile, entails gross development value of the project and deducting therefrom the estimated cost of development. The resultant amount is then deferred over the period of time required for the completion of the project to arrive at the market value.
Affin also said planning approvals dated April 3, 2012 and development orders dated June 12, 2015 and July 8, 2015 have been granted for the approved plan of the development of an international class Grade A, 35-storey office building development with a gross floor area (GFA) of 823,439 sq ft and up to 830 parking bays.
"The purchase consideration of RM255 million represents price per GFA of RM309.67 per sq ft based on the plot ratio of 15.2 times," it added.
Affin, which is controlled by Lembaga Tabung Angkatan Tentera, said the acquisition is undertaken premised on the fact that the group has been renting its current corporate office for more than 10 years, and that it provides an opportunity to house the group and its subsidiaries under one roof.
"It is also an opportunity for Affin to invest in TRX which is set to become a leading centre for international finance and business in the heart of Kuala Lumpur; the group stands to enjoy potential capital appreciation on the property; and having Affin’s new head office located in TRX will reinforce Affin’s branding and position in the market," it added.
Affin also noted that the plan to develop a new head office is part of its transformation initiative.
The group expects construction of the building to commence no later than 12 months from the date the title is registered under Affin's name, and to be completed in three years from the commencement date or by Dec 31, 2019.
As at 4.22pm, shares in Affin were traded down 2.94% at RM2.31, with 401,200 shares changing hands.
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