Highland Towers for sale

Last Dec 11 marked the 23rd anniversary of the collapse of Highland Towers Block 1. The tragedy claimed 48 lives. There were a series of landslides and land-related tragedies in that vicinity for several years following the tragedy.

PETALING JAYA: About 15 acres of land in a prime location in the city has been put up for sale for the second time in four years. However, because the land surrounds the collapsed Highland Towers in Ampang, Kuala Lumpur, the price has been subdued in that vicinity.

AmBank (M) Bhd put up the land for sale for the first time in December 2013. The bank placed an “expression of interest” advertisement for 50 freehold vacant bungalow lots which are to be sold together with rights to 111 units of the 138 units in Highland Towers.

There were three blocks there originally, but one of the blocks collapsed.

An AmBank officer declined to say why the land was not sold in 2013 nor gave details of this second exercise.

He said interested parties can buy the information pack which will have particulars of the properties and the terms and conditions of the sale for RM200.

According to the advertisement, the sale is on the basis of “as is where is basis,” which means the buyer would be buying the land in its present condition. It would also mean the buyer has to do a certain amount of due diligence on the land and documentation. Offers are to reach the bank by noon on Jan 18.

Henry Butcher Real Estate chief operating officer Tang Chee Meng said the fact that the land is undergoing a second sale exercise would mean that the bank did not manage to sell it the first time, or the buyer did not complete the sale.

“That location comes with a stigma. Even banks are cautious about that location and even if a developer were to succeed in making that acquisition, banks would need a good reason to finance the development,” said Tang.

Last Dec 11 marked the 23rd anniversary of the collapse of Highland Towers Block 1.

The tragedy claimed 48 lives. There were a series of landslides and land-related tragedies in that vicinity for several years following the tragedy.

“Because of what happened to Highland Towers, there could be a certain bias in that location. People are concerned whether there would be another landslide and even if a developer were to build there, the question is, will people buy?”

On the land price in December 2013 and today, Tang said the price may have dropped slightly or it could have been maintained.

“It would not have gone up,” he said. He declined to give any indication of land prices in that vicinity.

Local developers would be fully aware of the market situation and if they were to buy the land, it must be in a saleable location, said Tang.

The banks would also need to finance the deal and right now, banks are cautious on the overall property sector, what more that particular location, he said.

Tang reckoned that in today’s market condition, developers may not want to fork out hundreds of million ringgit for land which they cannot launch and develop within three to six months.

Said Tang: “This is a lot of money unless you can immediately commence development.”

“If a developer buys a parcel and does not have the development order - submission for approval takes one to two years - its holding cost would be substantial. Secondly, selling in today’s environment will also be an issue,” said Tang.

Foreign developers, however, may want to park some of their money here for their own reasons, Tang said, which confirms comments by VPC Alliance director and chartered surveyor James Wong that Chinese developers are looking for land to buy.

There are various reasons why they want to diversify into land in Malaysia which they cannot develop immediately, said Tang.

Wong said Chinese developers and other foreign developers are scouring for land in and about 50km from the city as well as coastal land in line with the Chinese’s focus on the One Belt One Road project, an economic initiative which involves both land and maritime route.

“Local developers are very selective, the Chinese not so,” said Wong in December.

Wong said foreign developers were scouring for large tracts of about 1,000 acres.

A 10- to 15-acre parcel like the Highland Towers would be suitable for a high value location.

This is prime land, if not for the stigma attached.

A third property consultant, Das Gupta, from Stocker Roberts & Gupta Sdn Bhd, said land sales have been rather subdued currently.

Only the Government is buying land for the Mass Rapid Transit and Light Rail Transit.

Individuals are parking their money in small parcels of up to a few acres besides taking their funds out of the country, he said.

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