MFM to sell Jalan Tun Razak parcel

Malayan Flour Mills Bhd (MFM), is seeking bids on its parcel in Jalan Tun Razak, Kuala Lumpur, land that industry experts estimate will fetch RM108 million.

The Edge reports that the flour miller and poultry farmer purchased the one-acre plot for RM21.73 million or RM500 per sq ft (psf) 23 years ago. 

"MFM has been holding this land since 1996 and the intent back then was to build a corporate headquarters. However, over the years, the priority has changed and now we have decided to dispose of the land to unlock the investment value," MFM group chief financial officer Cheang Kiat Cheong told the publication. 

"We have appointed Savills (Malaysia) to manage the sale," Cheang says. 

The publication reports that no reserve price has been set for the plot, which lies between the Indonesian Embassy and the Kenanga Tower building, just 1m from the Tun Razak Exchange (TRX). 

According to MFM's 2000 annual reports, a residential building that was built 80 years ago is located within the plot.

"The MFM land is a super prime one-acre development prominently located along Jalan Tun Razak, which is directly opposite the Royal Selangor Golf Club. It is one of the last few remaining prime lots in the city," Savills Malaysia managing director Datuk Paul Khong says.

"From a development angle, with a 1:6 plot ratio, it will have a total GFA (gross floor area) of 261,000 sq ft and given its excellent location, it will have pristine views of the golf course on its eastern side, panoramic skyline views of KLCC Twin Towers on its northwestern side, and of TRX with Exchange 106 on the southwest," he adds.

The TRX MRT station, less than a kilometre away is also currently fully operational. 

Khong says that these selling points and inherent characteristics, in future, will likely translate into brisk unit sales for developers. 

"In addition, it's a good lot size for development and even for land banking purposes over the current period," he adds.

The publication cites three industry experts, who says the freehold land may be worth between RM2,000 psf and R2,500 psf, or RM86.89 million and RM108.61 million, respectively.

Estimates for land developed into serviced apartments puts the gross development value (GDV) at RM300 million to RM350 million. For an office building, the estimate is between RM250 million and RM280 million.