MRCB wins RM7b ‘MX-1’

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) has won the bid to develop “MX-1”— a coveted 64.1-acre (25.9ha) parcel slated to be the town centre of Kwasa Damansara — with an estimated gross development value (GDV) of over RM7 billion.

The award was made by Kwasa Land Sdn Bhd, a wholly-owned unit of the Employees Provident Fund (EPF), and it marks the inaugural development of the 2,330-acre Kwasa Damansara township to be built on land bordering Sungei Buloh and Petaling Jaya, which formerly belonged to the Rubber Research Institute.

“We have made an offer to MRCB which is conditional upon them signing the definitive agreement within 30 days from the date of our offer letter,” said Mohd Lotfy Mohd Noh, managing director of Kwasa Land — the master developer for the entire 2,330 acres — in a statement yesterday.

MRCB has also announced to Bursa Malaysia that it had received the letter of award from Kwasa Land, adding that it is working towards finalising the definitive agreement upon receiving the offer bid.

The developer, whose major shareholders include the EPF with a 38.87% stake as at April 30, had previously shared that it intended to model the MX-1’s development concept after its flagship KL Sentral development, which is integrated with public transportation infrastructure to support KTM Komuter, Putra LRT and Monorail services.

The MRCB management has said that its property development strategy will revolve around integrating mixed development with a transportation hub, citing another upcoming project called Penang Sentral — a joint venture with Pelaburan Hartanah Bhd on a 24-acre tract in Butterworth — that will have terminal for ferries, taxies, buses and trains. MRCB had said that MX-1 would be an extension of this development strategy.

MX-1 has been earmarked to be the town centre of the proposed Kwasa Damansara township, which will be connected to two mass rapid transit stations and an adjacent Skypark air terminal. Property sales for the development within the MX-1 land area should be fully completed within 12 years.

In a recent report, UOB KayHian forecast MRCB’s revised net asset value (RNAV) increasing by 30 sen per share if it wins the MX-1 project. This was based on assumptions of an acreage of 64.1 acres, plot ratio of four times, land price of RM75 per sq ft (psf) per plot price, selling price of RM750 psf, and efficiency level of 70%.

Before factoring in the award of the MX-1 project, UOB KayHian had pegged its target price for MRCB at RM1.88. The counter closed down two sen yesterday at RM1.71, with a market capitalisation of RM3 billion.

Besides MRCB, there were five other timely submissions for the much coveted 64.1-acre parcel, and they were all big developers, namely Guocoland Malaysia Bhd, Putrajaya Holdings Sdn Bhd, S P Setia Bhd, UEM Sunrise Bhd and YTL Corp Bhd. The six were narrowed from 20 prospective companies which were pre-qualified from among the Tier-1 developers invited by Kwasa Land to pitch for MX-1 in March.

Under the qualitative evaluation, tenderers were required to submit their development concepts and layout proposals based on approved plot ratio, development phasing and unique features complete with overall planning layout, 3-D massing and landscape plans.

Under the quantitative evaluation, tenderers were required to provide the tender price on a psf basis along with a financial feasibility analysis.

The evaluation exercise was carried out by an independent advisory panel led by Raine & Horne International Zaki + Partners Sdn Bhd and supported by AJM Planning Urban Design Group, Perunding Hashim and Neh Sdn Bhd, ARH Jurukur Bahan Sdn Bhd and a few other leading consultants.

“On the whole, this has been a comprehensive bid on an open competitive basis. We would like to thank all the tenderers for their enthusiasm and commitment in their submissions. We truly appreciate the effort and the resources that they had put in,” said Mohd Lotfy yesterday.

“Moving forward, we are also scheduled to invite Tier 3 bumiputera developers for the inaugural bumiputera development and Tier 2 developers for a residential development by the third and fourth quarters of 2014 respectively,” Kwasa Land said in a statement.

This article first appeared in The Edge Financial Daily, on July 1, 2014.