KUALA LUMPUR: Affin
Holdings Bhd’s banking unit, Affin Bank Bhd, will buy 1.25 acres of land
in the Tun Razak Exchange (TRX) from 1Malaysia Development Bhd (1MDB)
to build its new headquarters.
The price it will pay KLIFD Sdn Bhd, a
subsidiary of 1MDB Real Estate Sdn Bhd (1MDB RE), is RM255mil. This
works out to about RM4,699 per sq ft (psf) for the land. 1MDB RE is the
master developer of TRX and a wholly owned subsidiary of 1MDB.
According to an announcement by Affin, the
parcel of land comes with a plot ratio of 15.2 times. A plot ratio of 15
times indicates that the gross floor area to be built on the parcel is
about 15 times or more.
Affin said that the parcel of land had been
earmarked for a 35-storey building and would have a gross floor area of
823,439 sq ft with 830 parking bays.
“The purchase price implies a price per gross floor area (GFA) of RM309.67 psf,” it said.
Affin will place a 10% deposit and the
balance 90% of the purchase price will be paid upon presentation of the
registration title.
Affin also said that its deputy chairman Tan
Sri Lodin Wok Kamaruddin, who is also the chairman of 1MDB, had
voluntarily abstained from and would continue to abstain from being
involved in all deliberations and decision making with regard to the
acquisition.
According to Affin, the purchase price is
slightly lower than the independent valuation of RM261mil that had been
carried out by CH Williams Talhar & Wong.
“We had to negotiate for the price and we do
not think this is a bargain for us, as it is only a 2.3% discount to
the independent valuation.
“But we think it is a reasonable price and
within (our) range. We are quite pleased with this,” Affin Holdings
group chief executive officer Kamarul Ariffin Mohd Jamil said at a press
conference yesterday.
In May this year, Lembaga Tabung Haji (LTH)
had come under scrutiny for acquiring 1.6 acres of land in TRX for
RM188.5mil. It was reported that LTH had bought the land at RM2,773 psf
and it came with a plot ratio of 10.47 times.
Land transactions in the city centre area
close to KLCC are being done at RM3,000 psf and normally come with a
plot ratio of between 10 to 12 times.
The parcel of land that Affin has proposed
to purchase fronts Jalan Tun Razak and sits at the intersection of two
Mass Rapid Transit stations.
“As of now, we do not have a proper home per
se and this is a very good opportunity for us to relocate there. We
have been presently leasing our office here at Menara Affin for the past
40 years,” said Kamarul.
Kamarul said that the board had given its
“unanimous vote” to the purchase, including the independent directors
and the directors that had represented its 23.5% shareholder, Hong
Kong-based Bank Of East Asia Ltd.
Asked if Lodin had a role to play in the
purchase or the events leading up to it, its director Tan Sri Mohd
Ghazali Mohd Yusoff said: “He was not involved from the beginning of
this.”
“We have visited other sites such as KL
Sentral and KLCC but this is the most suitable place and the owner gave
us a good offer.”
Lodin was not present at yesterday’s press conference to announce this purchase.
Kamarul further added that the plan to
purchase the land in TRX was initiated more than a year ago, and that it
was not a decision made recently.
“We are quite confident that notwithstanding
the problems at 1MDB, we will still continue with this (purchase).
Moreover, the board had unanimously approved this and Lodin had
abstained from all deliberations pertaining to this purchase,” Kamarul
said.
Pursuant to the purchase of this land, Affin
will allocate approximately another RM300mil to construct its new
headquarters thereafter.
“The total consideration is about RM600mil,
including land and construction, but this is still a preliminary figure.
We expect this to be done latest by the end of 2018,” Kamarul added.
The purchase does not require the approval of shareholders or the regulators.
