Prasarana plans to unveil RM1.1bil property development at LRT extension

KUALA LUMPUR: Syarikat Prasarana Negara Bhd, the state-owned public transport owner and operator, will announce two more mixed property development deals estimated to be worth RM1.1bil located along its light rail transit (LRT) extension project in Awan Besar and Puchong by the middle of this year.

Besides these two locations, there are 11 more parcels of land earmarked for property development along its future and existing LRT stations, envisaged to boost its non-fare segment revenue.

The 11 locations are in Jelatek, Kelana Jaya, Putra Heights, Pandan Jaya, Pandan Indah, Cempaka, Titiwangsa, Glenmarie, Kinrara, Bandar Puteri and Sentul.

According to group managing director Datuk Shahril Mokhtar, the mixed property development in Awan Besar and Puchong have indicative gross development values (GDVs) of RM600mil and RM500mil, respectively.

“We have 2.02 ha of land in Awan Besar and 2.83 ha in Puchong, quite adjacent to IOI Mall.

“These projects would be tied up with the development of park-and-ride facility for the stations there,” he told StarBiz.

Shahril said Prasarana had acquired these parcels of land mostly from companies and that it planned to give these companies the first right of refusal to jointly develop the projects.

“It's only fair to give them the first right of refusal, and if that doesn't work, then we could go by an invitation or open tender for others to come in,” he noted.

Shahril said Prasarana also planned to move its bus depot in Melawati to Batu Caves to give way to a mixed-development project which includes high-end condominium in the prime area.

“This would further unlock the value of our 2.83 hectares of land in Melawati, which is surrounded by residential properties fetching millions (of ringgit) each,” he said.

Nevertheless, Shahril stressed that Prasarana was not a property developer and that it would partner reputable developers to further unlock the value of its parcels of land to complement its rail operations as well as increase its non-fare revenue contribution.

“Residential development will give us a one-off sale contribution while the commercial space for lease will provide recurring non-fare revenue income.

“One average, we would get about 16% out of the GDV from the property sales and we plan to set up a joint-venture company to manage the commercial space leased, which is still under discussion,” he said.

At present, Shahril explained that non-fare businesses only made up 10% of its revenue while the remaining bulk was still commanded by fare-based income from its rail and bus operations.

“But we are striving to change this in five years' time when some of our property projects are completed. We aim to increase the non-fare revenue to 30% by 2018 and ideally, we want to maintain the contribution of this segment at 40%,” he said.

Prasarana has already inked agreements with several developers for joint mixed-property developments along its LRT extension lines in Dang Wangi, Taman Tun Dr Ismail, Ara Damansara and Brickfields.

Another good news, according to Shahril, is that the Government had been kind enough to transfer the ownership of its previously acquired land to Prasarana for a period of 99 years.

“In the past, all these land and stations belonged to the Government and were on a lease basis to Prasarana for 60 years. Now, however, we only have to pay the premiums of the land to the Government,” he said.

On the update of its ongoing property projects, Shahril said the developments in Dang Wangi and Taman Tun Dr Ismail were awaiting development order approval, while the developer for Ara Damansara was in the midst of submitting its development order application.

For its latest project in Brickfields with a GDV of RM1.2bil, market talk was that Binapuri Holdings Bhd was one of the prime candidates to bag the job.

On the recent accident involving the death of a motorist in its Subang area development, Shahril said investigations were ongoing and that stern action would be taken against the company that had been awarded the contract to develop the site.