Hurrah for the ex-servicemen!

Malaysian ex-servicemen should be happy to know that their retirement funds are being turned into very productive strategic investments, which would generate very healthy returns.

1MDB just announced that Affin Bank, a subsidiary of Armed Forces Fund Board (LTAT), has acquired a parcel with a very sweet deal in Kuala Lumpur International Financial District (KLFID). It is part of the Tun Razak Exchange (TRX) development.

NST story:

Affin Bank buys TRX land for new HQ

10 AUGUST 2015 @ 6:53 PM

KUALA LUMPUR: 1Malaysia Development Bhd Real Estate (1MDB RE) has inked a deal with Affin Bank Bhd today to acquire a plot of land measuring 823,439 sq ft in the Tun Razak Exchange (TRX) to develop its new headquarters (HQ) for RM255 million.

The plot, earmarked for a 35-storey Prime Grade A office block, will bring the Affin Group’s financial services entities to co-locate under one roof and cater for the Group’s future expansion plans.

Affin Bank’s new head office would be part of TRX’s financial quarter, essentially the Central Business District of TRX that occupies the most visible corner of the site, fronting both Jalan Tun Razak and Jalan Sultan Ismail.

“We are pleased with the progress we are making in our negotiations with local and international parties, and we are happy to have Affin Bank with us as we continue to realise our aspirations to create a world-class financial district,” said 1MDB RE CEO Datuk Azmar Talib in a statement.

The Sale and Purchase agreement was signed following extensive negotiations that began in 2012, and it covers the development rights to build a commercial tower for a consideration of RM255 million.

The development will have a Gross Floor Area (GFA) of 823,439 sq ft, with the price per sq ft GFA of approximately RM310. Affin Bank’s new head office has an attractive plot ratio of 15.2, while the entire TRX district – which will boast an urban central park and amenities such as on-site water treatment system and district cooling plant – has a plot ratio of 6.8.

At a separate press conference, meanwhile, Affin Bank managing director and chief executive officer (CEO) Kamarul Ariffin Mohd Jamil said:

“We have been sourcing for a suitable location that meets our requirement, with the right price. There was a need as the bank, together with other entities within Affin Group, has been growing and we need more space for everyone under one roof.”

He added that the land has been independently valued at RM261 million.

Kamarul Ariffin said Affin will pay 10 per cent deposit for the acquisition and the remaining 90 per cent upon presentation of the registration title.

Read More : http://www.nst.com.my/node/95573

************

The parcel came with a planning and development order of 15 times plot ratio, easily double the average plot ratio usually granted for land deals being flipped in the city. Affin’s plot ratio translates to the gross buildable area of 823,000ft. That should arrive to a net lettable area of 576,000 sq. ft.

At the expected average rental rate of RM10.00 psf/month four years from now, the property should realise a revenue in the neighbourhood of RM70 million per annum. That is effective 12% return on investment.

Considering that presumably the property would remain in the hands of the LTAT and an annual growth of 10% per annum in rental income and appreciated value, LTAT would tend to aggregate the absolute and paper gain in the neighbourhood of RM8.2billion within half a century.

That could be pro-rated to RM164million per annum.

This investment would definite add on top of the RM1billion profits that LTAT is making per annum, lately. The value of LTAT assets would definitely increase too, adding to the RM9.4billion which stands at the moment.

At the moment, each contributor to LTAT earns 15% dividend and 7% in bonus, plus another 1% bonus and 7% special bonus in the form of unit trusts to active members.

This is befitting to the call for those in the army to soldier on, “Biar putih tulang, jangan putih mata!“. It very much translate to ‘Who dares, win’.

Definitely the BoD of Affin Bank and LTAT did dare to commit into this strategic investment and not be clouded with anything else but to focus on the business at hand.

Affin Bank did get a sweeter deal as compared to Tabung Haji, which was more focused on developing a totally syariah compliant investment.

There is no reason for servicemen and ex-servicemen to doubt their welfare post-retirement from active service. This sweet deal is the Malaysian Government’s way of expressing a nation’s debt of gratitude to their sacrifice.

Published in: on August 10, 2015 at 19:35  Comments (8)  

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8 CommentsLeave a comment

  1. ” There is no reason for servicemen and ex-servicemen to doubt their welfare post-retirement from active service. This sweet deal is the Malaysian Government’s way of expressing a nation’s debt of gratitude to their sacrifice.”

    Money from KWAP? SRC?…another sacrifice?

  2. Yes, it’s definitely good for the ex-servicemen. They deserve to get good returns for their past services to the nation. In whatever form.

    Well done to the management of the organization(s) that run businesses for their interests. The profits made over the years speak for that.

    But is that a real pat in the back for 1MDB? Yes, they got a planning and development order of 15 times plot ratio, double the average plot ratio usually granted for land deals in the city. But aren’t we talking about 1MDB, owned by the Ministry of Finance, led by no less than PM and Finance Minister Najib himself.

    Was the plot ear-marked for Affin Bank or any of the LTAT subsidiaries before the planning and development order application? If so, could it not be better than that? Considering it’s for the benefit of those ex-servicemen who have served, protected and defended this country and enabled us to sleep soundly – including Tian Chua who made light of 10 of them who died defending the country against Muslim Filipinos in Lahad Datu.

    Sleeping soundly except for the 1MDB scandal and the like.

  3. Tun Dr Mahathir got 100 stories for each of the Twin Towers. No doubt the plot size was much bigger. But is 35 storeys the absolute maximum for the 1MDB land?

    No doubt it’s an attractive plot ratio of 15.2, while the entire TRX district has a plot ratio of 6.8. Those with town planning expertise may put out the various factors determining plot ratios. Presumably including parking, traffic, surrounding building sizes and other factors. But all those are human-made considerations and exceptions may be made.

    Unless engineering considerations show that a taller building on that land will weaken the structure and make it fall in 10-20 years, they should be allowed to go taller for the sake of our ex-servicemen. More floor space, more rent income. What say you, folks?

    That land measuring 823,439 sq ft is nearly 20 acres. There are many properties much smaller but with tall buildings in the Golden Triangle, KL. So the TRX district is for beauty and not so many sky scrapers? Surely they can allow 50 storeys for he ex-servicemen and let the others have lower buildings. Make the ex-servicemen tall in their retirement days.

    I’ll be interested to hear why it cannot be done. Affin/LTAT has huge funds to undertake a bigger project than 35 storeys.

  4. The land was purchased for the development of Affin Bank headquarters, to “bring the Affin Group’s financial services entities to co-locate under one roof and cater for the Group’s future expansion plans.”

    Will there be only one building on the nearly 20-acre plot of land? Sounds too big for just one building.

    The NST report began with saying “a plot of land measuring 823,439 sq ft”, but later said, “The development will have a Gross Floor Area (GFA) of 823,439 sq ft.”

    That’s confusing – the same size of land area as the floor area.

  5. Oh dear! Don’t count your chickens before they hatch.

    Do read this post titled: 1MDB: Sang Kelembai and Its Victims

    http://kadirjasin.blogspot.sg/2015/07/1mdb-sang-kelembai-and-its-victims.html

  6. Party lovers Paul Stadlen, Khadem al Qubassi and Jho Low are personalities closely associated with Najib and 1MDB.

    Most likely their business model is – to utilise existing money for projected profits based on future valuation of properties. No need to work too hard – might as well party today.

    Existing money lies in Tabung Haji, KWAP, EPF, TNB, LTAT??

  7. Will Najib still have the time to use exiting money in Tabung Haji, KWAP, EPF, TNB, LTAT?

    Will people allow him to do so after the scandalous 1MDB?

    He has been pleading for UMNO people in Johor to believe him and to speak up for him, including the Division Heads who received funds to run their offices etc.

    Come to think of it, not many did.

  8. On paper mmg cantik…mana boleh kira 1st year dh full rental…berapa byk ofis di KL no yg kosong x berpenghuni…


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