Higher plot ratio better, right?

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We have known of the crazy land prices in certain hotspots near KLCC. It can be as high as RM3,500psf and potentially even higher in future. In comparison, my friend’s uncle’s land somewhere in Teluk Intan was sold for just RM8 psf not too long ago. Haha. Yes. RM8 psf versus RM3,500 psf. What’s happening anyway? Well, it depends on the potential gross development value for that piece of land. Surely a piece of land right next to KLCC is going to be expensive because it is a desirable place to stay for the super wealthy. They want to wake up with a view of the tallest twin towers of the world today.

Another reason why certain plots of lands, even if they are nearby one another is different in pricing is also because of the plot ratio. In brief, plot ratio determines how much a developer can build on that piece of land. Assuming the plot ratio is 1:10. This meant that the developer can build something which is 10 times the size of the land area. How? Build up into the sky lah. Now you know why buildings are growing ever taller every year on ever smaller plots of lands?

Sometimes, the plot ratio is also revised upwards for certain reasons such as for affordable housing. Of course, this would also meant that the density is getting higher and the supporting infrastructure such as roads etc must also be upgraded in tandem. Otherwise, welcome to jam havoc in the future. The usual plot ratio for DBKL is 1:6 but it was reported in news reports that for Kampung Baru, the plot ratio can be 1:10. In an article in theedge some months back, according to James Goh, head of investment at Rahim & Co Chartered Surveyors Sdn Bhd there were instances where the plot ratios approved were as high as 1:12 He gave an example, UEM Sunrise Bhd’s parcel, which is the old Wisma Angkasa Raya, has a plot ratio of 1:12

I think if a certain area is well connected via roads, LRTs and even the future MRTs, the plot ratio can be approved higher. Historical numbers may meant nothing more than just historical numbers. Higher plot ratios may also mean a slightly cheaper unit. After all, higher density projects are always priced lower than the lower density ones, right? Happy buying higher density if you are okay with it.

written on 28 June 2015

next suggested article: Low Density is not luxurious, ok?

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