Kg Baru land valuation seen lower with new redevelopment deal

PITPKB 2040 faces same issues that haunted previous master plan due to multiple ownerships and heirs


THE revised Kampung Baru redevelopment project is expected to offer landowners less than the RM1,000 psf that was offered by the previous government to modernise the Malay enclave in the heart of Kuala Lumpur.

Property experts and valuers familiar with the proposed project said the valuation can go even below RM850 per sq ft if the government decides to go ahead with amalgamation of plots and grids it has proposed in the latest revision of the redevelopment project.

A valuer told The Malaysian Reserve (TMR) that due to the “retail arrangements” that are expected to be the modus operandi of the new deal, each plot would be sold on a willing-seller-willing-buyer basis between landlords and developers, which could push the price even lower.

According to former Federal Territories (FT) Minister Khalid Abdul Samad, the Valuation and Property Services Department (JPPH) had put a price tag of between RM650 per sq ft and RM850 per sq ft for the Kg Baru area.

“So, when the current FT Minister Tan Sri Annuar Musa stated that the government would not buy the whole land, it raises questions of who the land would be sold to before the development.

“So far, the highest transacted land — as tracked by JPPH — was RM850 per sq ft and it only comprised a few plots in one particular area. Others are being valued lower than that,” a valuer who is in the know of the matter told TMR.

After multiple changes in its blueprint within the last couple of years, Kg Baru’s redevelopment again hit the limelight when Annuar said Perikatan Nasional (PN) administration had to cancel the entire land purchase deal — an idea proposed by Khalid during Pakatan Harapan (PH) administration in 2018.

Annuar said the decision was made because the ministry found only half of the owners had agreed to sell their parcels.

He also said the earlier proposal had no proper plan, especially on where the RM7 billion allocation to buy over the plots would come from.

As a result, Annuar said PN will introduce a new plan for Kg Baru’s redevelopment, which would involve about 846 plots on 89ha owned by some 5,374 landlords, facilitated by Kg Baru Development Corp (KBDC).

Dubbed as Kg Baru Detailed Development Master Plan in 2040 (PITPKB 2040), the revised initiative is expected to see the division of the area into smaller grids before being prepped for further developments.

The plan, which will offset PH’s blueprint PITPKB 2020, is akin to the earlier master plan mooted by then Barisan Nasional administration in 2015.

However, another valuer cautioned that PITPKB 2040 might just face the same issues that haunted the previous master plan due to multiple ownerships and heirs.

The valuer said negotiations on the prices of the separate plots would also be tedious and long, with difficulties in getting agreements on the price tags.

“As long as the government could not determine the mechanism of the deal, developers would be very pessimistic to join the redevelopment processes.

“Developing the plots in a smaller ratio would be difficult. It might take beyond 20 years for the township to mature.”

Citing Taman Tun Dr Ismail in Kuala Lumpur and Melawati Mall in Gombak, Selangor as examples, the valuer said both township areas reached maturity within 20 years from the time development started.

“But these projects have fewer land ownership issues and are not as complex as Kg Baru, which involves multiple generations.

“As such, the owners and the government and people of Kampung Baru need to decide and if the land issues can be resolved faster, the enclave can reach a maturity phase by 2040.

“As of now, we need to wait and look into the details of the PITPKB 2040 if there would be any change in plot ratio, as well as the land usage ratio, including the percentage between residency and commercial development.”

The valuer said it would be easier to determine if the government decides to acquire the land.

“Now, it would be most likely that you have to engage each and every owner again.”

TMR previously reported that an area of Kg Baru land can be redeveloped ideally with a minimum of 30,000 sq ft, or 0.68 acres, considering the government’s term that the area must be developed with a 1:10 plot ratio.

In general, one lot of Kg Baru has about 4,000 to 5,000 sq ft (about 0.1 acre), while a maximum lot comprises 16,000 sq ft (0.37 acre). Hence, one project would need about four plots to fulfil the minimum requirement of the 0.68 acre.

Former KBDC advisory board member Syed Badli Shah Syed Osman told TMR that the FT Ministry should table a holistic and comprehensive master plan, as well as its viability, to convince landowners who are ready to sell.

“The main issue for KBDC is inheritance. If Annuar wants to develop the areas separately, what about those who could not be involved in the developments (due to the plot ratio viability)?

“That would create disparity in the development. That is why PH went for a comprehensive plan, while trying to avoid force acquisition. It takes time but there is a plan, but what would Annuar’s plan be?”