EPF consortium likely to buy government land around KL

EPF consortium likely to buy government land around KL
MI

KUALA LUMPUR, Dec 23 — The Employees Provident Fund could end owning three of the best pieces of real estate in the Klang Valley — and in the process boost government coffers by several billion ringgit.

Government sources told The Malaysian Insider that an EPF-led consortium is a cusp away from snaring the 204 acres in Jalan Cochrane while the EPF with its unmatched financial muscle is the clear favourite to buy a tract of land at the sought-after Rubber Research Institute of Malaysia in Sungai Buloh and Jalan Ampang.

In November, Finance Minister Datuk Seri Najib Razak announced that the government would be monetising some of its assets, including pieces of valuable real estate. For a start, government-owned land in Jalan Cochrane, Sungai Buloh and Jalan Ampang would be placed on the market.

This news created a buzz in the market because the land in Jalan Cochrane and Sungai Buloh has been eyed by prominent politicians and well-connected businessmen for years. Property consultants have valued the three pieces of land at between RM8 and RM12 per square foot (Sungai Buloh); RM150 and RM250 (Ampang) and RM100 and RM200 (Jalan Cochrane).

In a recent article in the Edge Financial Daily, a few property developers gave the Cochrane land the thumbs-up for its location and size, expecting the land value to increase to RM250psf if it is parceled into smaller plots while several others favoured the Ampang Hilir land, noting its proximity to the exclusive U Thant area puts a premium on this tract.

Government sources said that the EPF and several property players including MRCB have submitted a master plan to the government to develop the Cochrane area. With crude oil price hovering around US$50 per barrel and the drop in palm oil price, the government's ability to collect revenue will be severely challenged in 2009.

At the same time, the government will have to spend more and consider launching more stimulus packages to boost domestic demand and cushion the impact of the global economic crunch on the Malaysian economy. Faced with these twin challenges, the administration is looking at monetising its assets to raise funds. Property developers have valued the three pieces of land at about RM3 billion.