Residents, politicians oppose govt plan to redevelop 110 years old settlement in KL
THE enormous potential of the enclave notwithstanding, the proposed redevelopment of a Malay settlement located in the shadows of the Petronas Twin Towers in Kuala Lumpur may take a while to materialise as the settlement has become another political football.
The redevelopment of the 90ha Kampung Baru enclave has been mooted on numerous occasions over the past two to three decades, with Prime Minister Najib Razak being the latest to do so in February.
The total land value could exceed RM20 billion (S$8.6 billion) if its potential were to be fully realised, he said of the 110-year-old settlement where land transacts at an estimated RM350 per square foot (psf).
The desire to unlock its value is understandable given that it is a mere 10-15 minutes' walk to the iconic twin towers, where the surrounding real estate sells for RM1,500 to RM2,000 psf.
That it remains unchanged is due to various reasons, the main one being the fragmented and complex ownership brought about by syariah inheritance laws, which has resulted in many small subdivided plots.
Putrajaya plans to establish a special body run by a government trustee, which together with state-linked corporations such as national asset management firm Permodalan Nasional and the pilgrims' fund, will build a mix of skyscrapers, shopping malls, condominiums and residential units in the enclave.
Getting the 1,000-plus owners to agree on a development model was already proving a challenge. (Even within families, members disagree on the action needed.) Attempts by the Selangor Pakatan Rakyat (PR) coalition state government to offer an alternative redevelopment plan could make it even more difficult.
Barisan Nasional (BN) politicians have accused the federal opposition coalition of trying to hijack Kampung Baru to score political points with the Malays. The BN's Federal Territories (FT) Minister, Raja Nong Chik Zainal Abidin, has asked Selangor Chief Minister Khalid Ibrahim not to interfere as the enclave lies within the FT.
Notwithstanding the political wrangling, talks between the residents and the FT minister appear to be yielding little. In one instance, Nong Chik proposed allowing non-Malays to lease the commercial buildings on a 40:60 ratio with the Malays. Even though Malays would continue to own the land outright, his proposal was shot down by the residents, despite arguing it would enhance values.
Non-Malays should be allowed to lease the commercial properties for practical reasons - they have greater purchasing power, Pulai member of Parliament Nur Jazlan Mohamed told BT. Recently appointed Urban Development Authority chairman Nur Jazlan said the area has the potential to be immediately successful 'provided we have the right mix'.
He suggested the government use the Land Acquisition Act to overcome the stalemate. Although there are political risks, he is of the view that the residents will come round to the idea provided they can see progress and benefit from it.
In any event, KL-ites are arguably already opposition-i nclined as in the last general election, 10 out of 11 parliamentary seats fell to PR candidates. 'You should not give up value for politics,' he remarked.
Based on a conservative plot ratio of five, CH Williams Talhar & Wong director Foo Gee Jen estimates the land could yield up to 50 million sq ft of gross lettable area of office space.
Even so, the property consultant is not holding his breath. 'It will take years and I doubt it will be a straightforward case because of the socio-politico constraints.'
Source: Business Times, 7 Jul 2010