Desa Kudalari land has drawn interest from local and foreign buyers

Property consultancy CH Williams Talhar and Wong Sdn Bhd (WTW) has received a number of enquiries from local and foreign buyers – including investment funds and developers – to bid for the 7.35-acre Desa Kudalari condominium land for redevelopment purposes, said deputy managing director Danny Yeo.

“At the moment, there are some Singaporean developers who have expressed their interest. We believe there will be interest coming from Chinese, Japanese and Korean developers in the later stages,” Yeo said during a press conference on the en-masse sale briefing today.

The Desa Kudalari condominium joint management body (JMB) had engaged WTW to act as their representative to seek potential buyers.

According to WTW, the freehold parcel is zoned as city centre commercial land under the Dewan Bandaraya Kuala Lumpur (DBKL) Structure Plan and has an allowable plot ratio of 8, which is comparable to those of neighbouring plots which range from 8 to 10.

On the pricing, Yeo said based on recent land transactions in the Kuala Lumpur area, the indicative value for the Desa Kudalari land is between RM2,000 and RM3,500 psf.

Yeo cited a few comparable transactions in the vicinity. In December 2013, KSK Group Bhd had acquired 3.95 acres of land in Jalan Conlay for RM3,573 psf.

In October 2015, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) acquired a piece of land from the federal government in Persiaran Stonor for RM140 million or RM2,578 psf.

The prospects of the land are enhanced by the fact that the proposed KLCC East MRT station that is part of the Sungai Buloh-Serdang-Putrajaya Line (SSP Line) is right next door.

The KLCC East MRT station will have an underground tunnel passage to the Avenue K shopping centre that connects to the underground tunnel passage to Suria KLCC.

According to him, the owners’ share of the transacted price will be determined by the size of their unit.

For instance, the owner of an 818 sq ft unit will be entitled to a 0.25% share of the price as it reflects their percentage of the land area (7.35 acres or 320,166 sq ft).

Therefore, if the land was sold at RM2,000 psf, the owner of an 818 sq ft unit would stand to gain RM1,957 psf, based on a back of the envelope calculation, which is higher than recent transacted prices of units.

“The recent transaction of units in Desa Kudalari last year indicates a price of approximately RM1,250 psf. We believe the en-masse sale process could further unlock the value of the property and the selling price could be at least double, if not triple, of the last transaction price,” said Yeo.

Investors may submit their expressions of interest (EOI) for the Desa Kudalari condominium land from now until April 27.

Eligible bidders will be shortlisted and they will be requested to submit a pricing bid on June 28 this year.

WTW managing director Foo Jee Gen explained that the owners will have to evaluate and WTW will engage with the owners to secure a mandate to accept the best offered terms and price by the end of September.

The execution and binding agreements are expected to be completed by October this year.

He noted that this will be a transparent and market-driven bidding process as interested buyers will be required to submit their proposal, which includes different bidding prices according to different acceptance levels.

For instance, the buyer could bid for RM2,500 psf for 100% owners’ acceptance and RM2,000 psf for 85% owners’ acceptance.

There is speculation that Tan & Tan Developments Bhd, the developer of Desa Kudalari condominium, may buy back the land for redevelopment.

When contacted, the company’s executive director Teh Boon Ghee said the company is considering if it should participate in the bidding as pricing is the main consideration.

“The presentation has been done by WTW and many buyers have showed their interest. But we are still looking at the deal and have not decided yet,” he added.

The JMB chairman Alan Hamzah, who was also present at the press conference, said 90% of the 186 unit owners have showed their interest to sell in a survey done by WTW.

He noted that most owners are looking for better returns through the en-masse sale process as the condominium is aging and most residents are not willing to pay higher cost to maintain the standard of the property.

Currently, the 186 units are held by about 140 owners, with 70% of them locals and the rest foreigners.

“The remaining owners did not express their decision due to various reasons, such as they are overseas or have passed away, or some of them are taking a wait-and-see approach to consider the offer,” he added.

Hamzah said the occupancy rate of the condominium is about 70% with 60% of the units occupied by owners and the remainder leased out. - The Edge Property