Bandar Malaysia Land Deal Worth RM12 Billion
PETALING JAYA: KLCC Property Holdings Bhd (KLCCP) is set to take over Bandar Malaysia from the finance ministry in a deal reportedly worth as much as RM12 billion. The proposed deal involves the transfer of ownership of the 486-acre land, currently owned by TRX City Sdn Bhd, which also owns Tun Razak Exchange.
Background of Bandar Malaysia
Bandar Malaysia used to be home to the Royal Malaysian Air Force in Sungai Besi, just outside Kuala Lumpur. The tract is currently owned by TRX City Sdn Bhd, which acquired it after the air force vacated the site. The land has been largely underutilized, with the exception of some current tenants, which will not be affected by the new development plan.
KLCCP to Pay for Land in Two Tranches
According to sources quoted by The Edge, KLCCP, a wholly owned subsidiary of national oil company Petronas, will pay for the land in two tranches. The financial weekly reported that the sale is crucial for Bandar Malaysia Sdn Bhd (BMSB) to meet its debt obligations.
Bandar Malaysia’s Financial Situation
As of December 31, 2023, BMSB’s audited balance sheet showed zero non-current liabilities, but significant current liabilities of RM993 million in borrowings and RM2.8 billion in amount owing to its immediate holding company, TRX City. The report emphasized the need for BMSB to settle its debt obligations to avoid any potential financial repercussions.
Development Plan and Timeline
The Edge reported that the land will be developed in several phases, with the current tenants site unaffected as development is expected to take around five to six decades to complete. The report also mentioned that the development will be carried out in phases, with the first phase expected to be completed within the next decade.
Termination of Agreement with Sim Leisure Group
The Edge’s report comes days after the Singapore Exchange announced that theme park operator Sim Leisure Group Ltd had its agreement with BMSB terminated. Sim Leisure Group had entered into an agreement with BMSB last year to develop, construct, operate, and maintain Escape Park@KL Base, which will take up 75 acres of Bandar Malaysia on a 15-year lease with an automatic extension of another 15 years. Under the agreement, BMSB must pay Sim Leisure Group back its RM350,000 security deposit and RM1 million in advance payment.
Conclusion
The proposed deal to take over Bandar Malaysia from the finance ministry is a significant development in the country’s real estate sector. With KLCCP set to pay for the 486-acre land in two tranches, the deal is expected to have a significant impact on the company’s financial performance. As the development plan unfolds, it will be interesting to see how the project progresses and what benefits it brings to the local community.
Frequently Asked Questions
- What is the proposed deal worth?
The deal is reportedly worth as much as RM12 billion. - Who is taking over Bandar Malaysia?
KLCC Property Holdings Bhd (KLCCP) is set to take over Bandar Malaysia from the finance ministry. - How much will KLCCP pay for the land?
KLCCP will pay for the land in two tranches. - What is the current financial situation of Bandar Malaysia Sdn Bhd?
As of December 31, 2023, BMSB’s audited balance sheet showed zero non-current liabilities, but significant current liabilities of RM993 million in borrowings and RM2.8 billion in amount owing to its immediate holding company, TRX City.