Affin Bank Bhd has announced that it is buying land within the Tun Razak Exchange (TRX) project for RM255 million to develop its new corporate headquarters.
Its MD/CEO Kamarul Ariffin Mohd Jamil said the bank signed an agreement yesterday with TRX’s landowner and developer to acquire the 54,266 sq ft land that will be developed into 823,500 sq ft of floor space representing a 35-storey building.
Kamarul Ariffin said the purchase price represented a 2.3% discount to prevailing market valuation of land in the area south of Kuala Lumpur city centre.
He said the purchase fits the bank’s plan for a dedicated headquarters after renting its current Menara Affin building in Jalan Raja Chulan for the past 10 years.
He said due to the growth of the bank and its resources over the years, staff are now based in offices in various locations in the Klang Valley.
“This is a prime location and having an office here will definitely reinforce our branding and position in the market,” he said. “We have been sourcing for a suitable location that meets our requirements and with the right price.
“There is a need as the bank, together with the other entities within the Affin Group, have been growing and we need more space to house everyone under one roof,” he told reporters in Kuala Lumpur yesterday.
He said Affin will pay 10% of the purchase price upfront for the acquisition, while the remaining 90% will be paid on receipt of the land title.
The bank will set aside RM300 million for the construction of its headquarters.
He said based on the bank’s total asset as at March 31, 2015, of RM56.9 billion, the purchase consideration only represents 0.4%.
Meanwhile, in a statement, TRX said Affin’s headquarters will be part of the development’s Financial Quarter.
“We are pleased with the progress we are making in our negotiations with local and international parties, and we are happy to have Affin with us as we continue to realise our aspirations to create a worldclass financial district,” said Datuk Azmar Talib, CEO of 1MDB Real Estate Sdn Bhd which develops TRX.
The TRX land has been under scrutiny as it is linked with debt-laden state fund 1Malaysia Development Bhd (1MDB).
Tan Sri Lodin Wok Kamaruddin is the chairman of 1MDB and also Affin director.
“Lodin has voluntarily abstained from and will continue to abstain, and is not involved in all deliberations and decision making with regards to the transaction,” Kamarul Ariffin said.
On May 6, Lembaga Tabung Haji (LTH) was heavily criticised for its acquisition of a plot of land measuring 0.64ha in TRX for RM188.5 million to be developed into a 40-storey block of serviced apartments.
After only three days, LTH then decided to sell the land based on advice from Prime Minister Datuk Seri Mohd Najib Razak to “respect the sensitivities of LTH depositors”.
As of Ju ly, LTH was reported to have received interest from two unnamed potential buyers.