BT : KL to sell select plots of land to private sector

Business Times - 13 May 2010

KL to sell select plots of land to private sector

By S JAYASANKARAN
IN KUALA LUMPUR

THE Malaysian government agreed last week to the privatisation of several tracts of government- owned land in Kuala Lumpur, executives familiar with the matter say.

The largest of the deals will be the sale of Sungei Besi airport, a 160-hectare field south of Kuala Lumpur that still houses an air-force base and a flying school. It is the single largest remaining tract of government-owned real estate in Kuala Lumpur and could be worth hundreds of millions of ringgit.

According to the executives, the area is likely to be privatised to a consortium that includes the Armed Forces Superannuation Fund (30 per cent), One Malaysia Development Fund (30 per cent) and a company linked to businessman Desmond Lim (40 per cent). Mr Lim, a confidant of Prime Minister Najib Razak, owns listed development company Malton, which is a shareholder in the wildly successful Pavilion shopping complex in Kuala Lumpur.

It isn't clear how much they will pay the government for the land but it is believed that the consortium will push ahead with over RM1 billion (S$430 million) of development that will include an Islamic Financial Centre.

The freeing up of the state land was first announced by Mr Najib in his Budget speech last year and repeated in his recent address unveiling his New Economic Model (NEM). The projects are aimed at boosting growth and raising cash to pare the government's growing budget deficit.

The Armed Forces Fund's inclusion in the project isn't surprising as the airport used to be an air-force base. Meanwhile, the RM5 billion One Malaysia Development Fund is a multi-billion-ringgit fund set up by Mr Najib last year to drive strategic initiatives that can create long-term sustainable growth.

Other tracts of real estate that have been cleared for privatisation include small plots of land in Jalan Stonor and Jalan Cochrane in the capital. And the exercise is likely to extend to the historic Sultan Abdul Samad building in central Kuala Lumpur, which used to house the government court complex. The building is likely to be gentrified although it will keep its original façade as it is considered a heritage landmark. It isn't clear which parties will snag these deals.



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