24 Dec 2014

German Govt expecting RM225mil by selling two properties in KL

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PETALING JAYA: The German government is selling the two properties it owns in the heart of Kuala Lumpur for a potential combined worth of RM225mil.

According to an advertisement in The Star and a local business daily recently, the former residence of the German ambassador in Jalan Kia Peng and the Goethe-Institut sited in Jalan Langgak Golf, have been put up for sale by tender by real estate consultants Savills Rahim & Co.

A source familiar with the transaction said that the former residence of the German ambassador and the Goethe-Institut are expected to fetch RM200mil and RM25mil, respectively.

StarBiz reported in July 2013 that the asking price for the 0.74ha freehold property of the former residence of the German ambassador, which resembles a clubhouse with a pitched roof, had an indicative price of RM2,500 per sq ft and was valued at about RM200mil.

At the time, the German government had yet to give a directive on the sale of the property.

When contacted, a spokesperson for the property consultancy said the tender for the properties started on Dec 15 and would close on Jan 26.

“Yes, there are interested parties. We have been getting calls and some have been coming to collect tender documents,” she said, adding that the property consultancy had been receiving enquiries from both local and foreign parties.

She declined to reveal the indicative prices for the properties.

According to Savills Rahim & Co’s official website, the property in Jalan Kia Peng is zoned for “mixed-residential use” and encompasses a titled land area of 81,288 sq ft.

The property was sited near the KLCC/Petronas Twin Towers and was within walking distance of the KLCC LRT station and the Raja Chulan monorail station, the property consultancy said on its website.

The other property in Jalan Langgak Golf, meanwhile, is zoned for “commercial use” and encompasses a titled land area of 16,695 sq ft.

“This property is located about 2.7km west of the KLCC/Petronas Twin Towers, on the corner of Jalan Tun Razak and Jalan Langgak Golf, and is right in the heart of the Embassy Row and the prestigious neighbourhood of U-Thant,” it added.

Despite the softening property market, Malaysian Institute of Estate Agents (MIEA) president Siva Shanker believes that the properties can be sold, given the strategic location.

“It doesn’t matter as the purchaser will be in it for the long term. It’s a big opportunity as you might not be able to buy an address like this again.

“Whoever is buying the properties is not a speculator that’s looking to flip it and make a profit in a few years,” Siva said.

The properties being sold off by the German government would be the latest among several that have either come up for sale or have been transacted in the past two years in the vicinity, as property owners cash out on the high prices commanded in the area.

In August, a 3.23ha parcel of land in Jalan Ampang, which was owned by the French Embassy, was said to be up for sale for an estimated RM700mil, according to reports.

CB Richard Ellis Malaysia group executive director Paul Khong was reported as saying at the time that the French Embassy is expected to be sold early next year.

“The French Embassy is being offered for sale by tender by CBRE Malaysia, with the tender closing in the first quarter of 2015. The German embassy is also on tender at the same time but closing in January.

“We are seeing the relocation of embassies along the Embassy Row at the Jalan Ampang vicinity, giving way to new mixed-development projects and new super condos. Many of them are relocating to new premises in purpose-built, high-rise office buildings with better facilities and higher security levels,” he said.

Khong added: “They are still looking around for a suitable location to relocate. The present area is ripe for redevelopment and the embassy is looking to move to an office building,” he said.

Meanwhile, the 1.22ha British High Commission, also located in Jalan Ampang, was sold for RM294.97mil, or RM2,200 per sq ft, to SP Setia Bhd in late 2012.

The British High Commission has since relocated to Menara Binjai, which is next to the Intercontinental Hotel in Ampang.

A source familiar with this transaction said the relocation was mainly due to cost savings.

“They were formerly located on three acres of land, equipped with security guards and gardening facilities. The cost to maintain the place was quite high.

“Right now, they are located on just one floor of Menara Binjai. The place is between 12,000 and 13,000 sq ft, with two to three guards, compared with around 12 before. The upkeep was substantial,” the source added.

Source; http://www.thestar.com.my/Business/Business-News/2014/12/25/Prime-deals-Sale-price-of-two-German-govt-properties-estimated-at-combined-RM225mil/?style=biz 

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