How much gross development value (GDV) can we get from a piece of one acre land in Kuala Lumpur? These days, a small plot of land within the KLCC area would cost easily RM3,000 per sqft. Read here: Property prices, primelocations, embassy land sale However, on an overall basis, the land cost vs GDV remains healthy by any developed property market standard. As a Malaysian developer, opportunities would also exist in markets outside Malaysia. This is especially when the profits from such developments are in a far stronger foreign currency. Let’s look at SP Setia’s 5th plot of land in Melbourne, Australia.
As per reported in Bernama, SP Setia would be buying a plot of 1.02 acre land. This small piece of land will however be worth A$640 million (RM1.91 billion) in GDV. Of course the location is in a Central Business District (CBD) in the city. SP Setia is the purchaser of this 1.02 acre site. They won a highly competitive International International Expression of Interest bidding exercise” from Australian telecommunications company Telstra Corp Ltd. Total purchase price would be A$101 million (RM300.96 million). Land cost vs GDV is thus around 15.8 percent. Still a very healthy number.
According to SP Setia president and chief executive officer Datuk Khor Chap Jen, the development would be the epicentre of Melbourne CBD’s cultural, commercial, education and city garden hubs. The land would be redeveloped into two residential towers with up to 800 residential units with a retail podium. It will also include prime A-grade office space besides these two luxurious apartment towers. The launching would be in the second half of 2017. Besides this current piece of land, Setia Melbourne has undertaken two successful condominium projects in Melbourne (Parque and Fulton Lane). It has two other niche developments in Melbourne currently; Prahran and Carnagie. I wish them all the best. Always feel good when Malaysian developers are successful overseas.
written on 5th May 2016
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