Mah Sing pays RM260 million for land within KLCC. How big is this piece?

Mah Sing pays RM260 million for land within KLCC. How big is this piece?

Land is definitely the best real estate investment.

One main reason? It does not grow except if we reclaim them from the sea. These days, it’s becoming more expensive and usually, when a developer buys a piece of land and paying hundreds of million in ringgit, the size is usually also hundreds of acres too.

Example? Gamuda’s RM249 million for 336 acres of land: Full article here: gamudaland.com.my

Another example? Matrix Concept’s RM460 million for 559 acres of land. Full article here: nst.com.my

So, what’s the size which Mah Sing is acquiring by paying RM260 million?

Article in thestar.com.my Mah Sing Group Bhd has acquired 1.485-acres of freehold land in the heart of the KLCC precinct from the MUI Group for RM260mil.

In a statement, Mah Sing said the strategically located land houses the Corus KLCC hotel and is within five minutes’ walking distance from the PETRONAS Twin Towers and Suria KLCC.

Mah Sing said the land will be redeveloped into a premium freehold serviced apartment project with an estimated gross development value of RM1.28bil.  Units are indicatively priced from RM898,000.

Mah Sing founder and group managing director Tan Sri Leong Hoy Kum said the acquisition aligns with the group’s strategy of unlocking value in prime urban locations with strong demand fundamentals. 

“More than just a redevelopment, it’s an opportunity to create a prestigious address in the heart of Kuala Lumpur. We are excited to reimagine this prime site into a landmark development that complements the KLCC skyline. Full article here: Article in thestar.com.my

Land cost is 20 percent of the GDV!

Usually, land cost is closer to 10 percent of the Gross Development Value (GDV). However, if the developer is able to execute this development in a very quick manner, perhaps the margin is good enough. If stretched over an additional year, then the margin may not be attractive. As this is a small piece of land, maybe it is possible. Just build and sell at an attractive price. At RM898,000 and being just 550m away from the Petronas Twin Towers really does look attractive, right? Take a look at what google map is showing.

What is 1.485 acres in sq ft, actually?

1 acre is around 44,000 sq ft. So, 1.485 acre, as per google is as below: 64,687 sq ft. Yes, I know what you are thinking too. It looks small but as land parcels like this is not easy to come by and for anyone aspiring to own a property which is a mere 550m away from Petronas Twin Towers, then perhaps this is one ‘affordable’ option since the price is still just 6-figure amount.

RM898,000 per unit means over 1,000 units??

RM1.28 billion divided by RM898,000 equals to 1,425 units. Note, the article said, ‘from RM898,000.’ In other words, this would be the cheapest unit but there are units which are higher priced. So, probably total units should be lower than if all units are exactly the same. Some differentiation definitely makes more sense yeah. Some may be way wealthier than everyone else and RM898,000 is just too low for them to buy a unit. No joke lah, have you seen the price of the car which some of these people are driving? RM898,000 is not even equivalent to their car price lah…

Happy waiting for more details.

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