Remember an earlier article about the embassy lands? Read here: Property Prices, Prime Locations, Embassy Land Sale Latest update is that the French Embassy Land may be sold very soon and the winner is said to be MRCB. The sale of this last few pieces of embassy lands is via a competitive tender. The land size is 7.9 acres which is considered quite sizeable and thus the bid is likely to be higher than the German Embassy’s 1.87 acres. The likely price is RM3,188 per sq ft. Yes, this is just for the land. The winning developer still has to build in order to sell. Total cost is likely to be about RM1.108 billion.
For the past few years, land prices has continued to increase because there were none left. All the ‘new’ ones being put up for sale were all secondary ones. KL City Hall has also increased the plot ratio and this has enabled developers to be more creative in what they can do even with a smaller piece of land. You can always build higher up into the sky. 🙂 Of course, after the first piece was sold, the owners of the these pieces of land would be trying to sell even higher. As every land valuer would tell you, anytime is good time to buy land because you just can’t grow new lands. Especially those in the highly sought after areas.
Oh yeah in MRCB’s purchase of the German Embassy land, the gross development value (GDV) for it is expected to be around RM1.3 Billion. Thus, the land price of RM259 million is still just 20% of the total GDV. When we look at this, it simply meant that the the room for land prices to move upwards is still possible, especially when the right project is able to generate even higher GDV. In many developed countries or even the lesser developed ones, this 20% land cost versus GDV is still a very healthy number. Happy buying land if you happen to be super-wealthy.
written on 13 Apr 2015
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