PETALING JAYA: Not unlike a few other government agencies that own large swathes of valuable land, the Selangor State Development Corp, or PKNS, is pushing ahead with redevelopment plans in some of its prime areas.
A noteworthy development surfaced last Friday in a filing with Bursa Malaysia, where DKLS Industries Bhd said it had entered into a heads of agreement with PKNS to redevelop a parcel of land in Section 17, Petaling Jaya, measuring 6.4ha.
This area currently houses numerous blocks of old flats, including a green reserve for the area.
DKLS said the project would entail a mixed development comprising commercial, retail and residential units with a gross development value (GDV) of a whopping RM1.5bil.
The area concerned has been drawing a lot of interest lately, according to property consultants. It is next to the factory area, which is in the midst of a major redevelopment programme. That area has already transformed itself to become a mixed commercial and residential hub, anchored on the Jaya One development.
Jaya One is currently in its final phase of development with a GDV of RM360mil mainly for residential units, having already developed some RM600mil worth of commercial properties.
Besides Jaya One's planned serviced apartments, there are currently two other similar projects being planned for Section 13.
One is named Pacific Star (opposite Jaya One) developed by Island Circle Development (M) Sdn Bhd, which is a mixed development of commercial space and residential units on a 6.04-acre land. While further up the area, Fraser & Neave Holdings Bhd would be starting site works in September to develop a RM1.6bil mixed development project on 13 acres which is currently housing its factory.
PKNS declined to comment for this article and said it would provide updates once plans were more firm.
It is likely though that the project may have its fair bit of opposition, considering that the redevelopment encroaches on the green reserve located between Section 13 and Section 17, along Jalan Universiti. It is yet unknown if the new plans include preserving or enhancing that green area.
Although the state-owned corporation declined to comment, sources familiar with the situation said that PKNS was likely to engage the affected residents in a similar way that it did when it embarked on the redevelopment of the PKNS Taman Keramat flats in Jalan Jelatek in 2010.
Dubbed the 'Columbia Flats'' for its drug and vice dens during the 1980s, the flats are to be replaced with a RM900mil mixed-development project called Datum Jelatek.
The project comprising four 45-storey buildings of residential and commercial units, a hotel and shopping mall, would be developed by PKNS and its subsidiary company, Worldwide Holdings Bhd.
PKNS had compensated RM250,000 to RM300,000 for each house and RM450,000 to RM500,000 to business lot owners of the Taman Keramat flats.
The report said that residents of the 592 sq ft units would be given a 700 sq ft unit in the new development.
On top of that, there was also a proposal for a RM5,000 moving-out allowance, RM8,000 moving-back allowance as well as a rental subsidy of RM500 per month until the project is completed.
In addition to that, the leasehold period of the new development would be renewed to 99 years instead of 30 remaining on the existing titles.
Last year, PKNS had put the market value of the units at RM96,496 (592 sq ft at RM163 per sq ft) each.
If those plans materialise, it does seem as if the current flat owners would be getting a pretty good deal, considering that another up coming development named Pacific Star, which is located a stone's throw away, is selling for a far higher price.
PKNS is also embarking on several large-scale redevelopment projects, including the Sports City, Kelana Jaya, which is where the PKNS Stadium is located, via a joint development with Melati Ehsan Bhd.
It is also developing the PJ Sentral Garden City, a RM2.6bil joint-venture redevelopment with Nusa Gapurna and the Employees Provident Fund. Nusa Gapurna group is the same developer of the 348 Sentral project in Jalan Tun Sambanthan, Brickfields.
Another PKNS project in the pipeline is the PJ Elevated City, a RM3bil mixed-development project which is also part of the Western Digital factory expansion programme.
Industry sources said that with ownership in different key projects around Selangor, PKNS was likely to retain ownership of a few of the valuable properties to enable itself to venture into becoming a real estate investment trust (REIT).
Previously it had called off a proposed venture with AmanahRaya REIT (ARREIT) to inject some key assets into ARREIT. It is understood that PKNS changed its mind about the injection as it wanted to look at the other properties it was developing, as possible injections into a REIT.
Hence, it is likely that PKNS' REIT injection plans will resurface again at some point, judging from the many other strategically-located redevelopment and urban regeneration projects in the Klang Valley it is working on.
PKNS general manager Othman Omar is reported to have said that the state-owned corporation would be adding another RM6bil worth of new projects by the end of 2012, in addition to the RM14bil that was already announced.
By The Star
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