KUALA LUMPUR: The RM1.6bil land swap deal that Malaysian Resources Corp Bhd (MRCB) secured to regenerate Bukit Jalil National Sports Complex (NSC) is in line with the company’s strategy to expand its land bank.
The construction and property development company further notes it will be able to internally generate funds to sufficiently finance the two-phased project to refurbish and upgrade Bukit Jalil NSC into KL Sports City over the next five to six years.
“We have no issue with cash flow as we are able to internally generate funds for the projects,” MRCB executive director Imran Salim said.
“Our end objective is to keep growing our land bank. We have to grow our land bank because we are developers, and we are not just any developer; we are an urban developer, so our focus is on getting urban land,” he said at a briefing here yesterday.
According to Imran, MRCB has a preference to go into dilapidated areas within the city to rehabilitate and upgrade those land, rather than source for land outside the city.
“This is because we feel that expanding the city too wide is not effective for the environment and cost of infrastructure over the longer term,” he said.
Last week, MRCB announced that it had beaten 10 other companies in a tender process to secure a RM1.6bil privatisation deal from the Government to refurbish and upgrade Bukit Jalil NSC via its 85%-owned subsidiary Rukun Juang Sdn Bhd. The deal would see MRCB getting three parcels of government land measuring a total of 92.5 acres around the Bukit Jalil area in stages based on the completion date of the projects that would be carried out in two phases.
The first phase of the project, valued at around RM499mil, would begin in January 2016, and would be expected to complete by June 2017. This phase would involve readying the Bukit Jalil National Stadium for the 2017 South-East Asian (SEA) Games as well as enhancing the Putra Stadium, the National Aquatic Centre and the National Hockey Stadium.
Upon completion of the first phase of the project, MRCB would get the first parcel of land measuring 28.13 acres.
The second phase of the project, valued at around RM1.1bil, would commence in January 2018, and would likely complete by the end of 2020. Upon completion of this last phase, which would involve the creation of a fully integrated sports hub, called the KL Sports City, MRCB would get the remaining two parcels of land measuring 64.37 acres.
“We have to complete all our obligations before we get the land. Once we complete the first phase, we will get RM499mil worth of land, and when we complete the second phase, we will get the RM1.1bil worth of land,” Imran said.
“We are land banking at the current stage so we have time to wait for the land to be allocated to us,” Imran said.
Currently bearing government land title, the three parcels of land would subsequently be converted to commercial status, with a leasehold period of 99 years, upon transfer to MRCB.
In its earlier announcement, MRCB said the potential use of the three parcels of land was mixed development comprising residential and commercial properties.
“We expect to start actual development of the land when we complete most of our obligations to the Government, and that would be four to five years down the road,” Imran said.
He, however, stressed that the final development plan for the three parcels of land would depend on the market conditions closer to the actual development plan.
“We have a gist of net floor area that we want to develop, but we will only reveal details when we are closer to development because we need to see what is the market conditions at that time,” Imran said, adding that MRCB would only go through the procedure of applying for plot ratio when it gets the land.
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