Every time we hear about Eco World, the GDV is always in the billions. This is despite the fact that Eco World is still considered a young upstart. Of course, everyone knows the team behind Eco World and we shall not explain more. In a report by The Malaysian Insider, it said that Eco World is tipped to win the RM7 Billion redevelopment project of the Pudu Prison, in a joint development with UDA Holdings Bhd. This is reported to be a 70:30 joint venture with UDA for the very prime land in KL’s golden triangle. The Pudu jail ceased its operations officially in 1996.
This is the second time that such an announcement for the redevelopment is to be decided. Three years ago, the China-based developer Everbright International Construction Ltd was to get the project but in the end, this was discontinued and in September 2013, UDA called for a new tender. Nevertheless, it was also reported that this is likely to be a directly negotiated contract. Thus, there would definitely be objections moving forward.
There are many instances that I favour directly negotiated deals. The Pudu Jail is in a very prime piece of land and in order to maximise its value, sorry to say but not every developer who thinks it can do it, should be allowed to do it. Assuming a smallish developer submits the lowest tender out of everyone who submitted and it said that it can have the highest GDV, do you decide that they should get it? If they get it and they are successful, that’s great news but why not reduce the possible risks and go with a very reasonable bid which gives a win-win to both parties; the land owner and the private developer. Please be reminded, there is a reason why YOU, yes you the buyers are willing to pay a premium for these well known developers. The reason being you feel that their project is better, the risks are lower and the potential is greater.
There’s a huge mall in Penang which was supposed to be an iconic mall and it was given to a well known Penang developer. Sorry to say but the mall is really not successful and the developer struggled to bring in huge brand names from out of Penang. Compare that to Queensbay Mall which had a very experienced mall developer and you get a very successful mall which helped to even increase the premiums of all the properties next to it. Ask any Penangite today and majority would prefer to visit Queensbay Mall instead. Note, there is nothing wrong with the Penang developer. I have even bought a property from them and has earned huge profits. However, their expertise is NOT in mall development, that’s all.
I look forward to the next announcements. Seriously hope even if it is not Eco World, it would be another of the top developers which has the experience to ensure the best possible value from that piece of prime land. I know, some say that the site is ‘haunted’ etc but let me tell you honestly and seriously. If I can afford it, I think I would buy one unit.
written on 22 June 2014
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