MRCB buying German embassy land in KL

MRCB group managing director Tan Sri Mohamad Salim Fateh Din and the German Ambassador, Holger Michael at the signing of the sale and purchase agreement for MRCB's purchase of the German Embassy land for nearly RM260mil.

Malaysian Resources Corporation Berhad (MRCB) is buying the German Embassy land here for cash consideration of RM259.15mil.

MRCB said on Tuesday it had entered into a sale and purchase agreement with the government of the Federal Republic of Germany to acquire the 1.8661 acres of land with the buildings.

To recap, on 26 January 2015, MRCB participated in a tender called by the vendor for the land.

“The tender price of RM259.15mil or RM3,188 per sq ft is about 6% higher than the market value of the land based on the appraisal conducted by CH Williams Talhar & Wong and Raine & Horne International Zaki & Partners,” it said.

MRCB explained the price was based on the scarcity of freehold land in the highly sought after address of Jalan Kia Peng and the development potential of the land arising from its established location in the high end area with good accessibility and close proximity to KLCC and comprehensive range of amenities and facilities.

The purchase consideration will be funded through bank borrowings and/or internally generated funds.

The acquisition of the land, which previously served as the official residence of the German Ambassador until June 2013, was part of the group’s strategy to seek good opportunities to expand its operations with a vision to create shareholders value by achieving strong and sustainable long-term growth.

The sale and purchase agreement was signed by MRCB group managing director Tan Sri Mohamad Salim Fateh Din while the German Ambassador, Holger Michael, the German Ambassador, signed on behalf of the German government.

Salim said: “The supply of land is inelastic and the cost of land banking will continue to rise, but land banking is an on-going process for all developers like MRCB because it is crucial for business growth”.

“Strong developers with innovative skills can always further enhance the value of the land by their good design and innovative master plan."

He said to address rising costs, MRCB had continuously introduced new concepts, ideas and innovative features in our development whilst achieving better construction cost efficiencies and adopting new construction technologies.

“Hence, the land prices will not pose a challenge to MRCB as we are always able to innovate with strategic planning and creating value for our projects. We believe our product will meet the expectations of the market for innovative developments,” he added. - By The Star