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PETALING JAYA: The proposed land acquisition of the 1.1-acre land on Jalan Tengah in Kuala Lumpur by Hap Seng Consolidated Bhd is an “expensive but strategic” deal, a property consultant said on Tuesday Dec 22.
Speaking to theedgeproperty.com, VPC Alliance (Malaysia) Sdn Bhd managing director James Wong said the higher price was probably due to the attached development order (DO) and the location of the land, which is just next to Menara Hap Seng (pictured) and Hap Seng Star Mercedes-Benz showroom in the Central Business District (CBD) of Kuala Lumpur.
“This deal has a marriage value for Hap Seng Group, which allows its developments to have frontage to three roads - Jalan Sultan Ismail, Jalan Tengah and Jalan P Ramlee,” he added.
Hap Seng Consolidated had on Dec 21 proposed to acquire the freehold land from Eastern & Oriental Bhd (E&O) for RM103 million. The latter is expected to get a one-off gain of RM31 million from the disposal that is expected to be completed in the first quarter of 2010.
E&O bought the land for RM26.58 million in May 2006. It was granted a DO by the Kuala Lumpur City Hall (DBKL) in September 2007 and July 2008 to develop a 35-storey office building with a five-storey basement carpark.
The land is currently vacant save for certain preliminary substructure and piling works that have been carried out previously.
Wong expects Hap Seng Consolidated to submit a revised plan for the land to connect the new development to Menara Hap Seng, formerly known as MUI Plaza.
Hap Seng Land Sdn Bhd, a wholly-owned subsidiary of Hap Seng Consolidated Bhd, purchased the then MUI Plaza from MUI Properties Bhd in 2004 for RM167 million before converting it into an integrated office-cum-retail building Menara Hap Seng.
Hap Seng Land chief executive (property division) Datuk Paul Ng had early this year said the company plans to buy lands and properties in Klang Valley, especially those in the CBD area.
