Glomac Bhd is steering away from township projects to focus on high-end properties in the city centre
By S.C. CHEAH
GLOMAC Bhd has two major commercial developments worth a combined gross development value (GDV) of RM1.1bil that will see it move towards high-end, niche residential and commercial properties in the Klang Valley.
The projects are the 40-storey, Glomac Tower in the Kuala Lumpur City Centre (KLCC) area and Glomac Damansara, a mixed commercial and residential development in Damansara Kim, Petaling Jaya. Both have a GDV of RM550mil each.
Vice-chairman Datuk Richard Fong said Glomac Tower, initially to be kept for rental income, would be the group's first office building and the second high-end development in the city centre.
The first was Suria Stonor. The luxurious condominium near KLCC, launched 18 months ago, is 90% sold. The price has shot up from RM680 per sq ft (psf) to RM1,100 psf, a gain of about 60%.
“We will keep Glomac Tower for investment purposes. However, we are open to offers and may consider selling the whole building if the price is right,” he told StarBiz.
The 1.3-acre freehold land at Jalan P. Ramlee and Jalan Pinang was bought for about RM1,000 psf six months ago from the Tan family of the Continental Hotel group.
“It was a new record (price) at that time. We are lucky to buy this piece of land as the value has now appreciated to RM1,300 psf. That's a 30% gain within six months,” Fong said.
The 168m iconic tower with a good view of the Petronas Twin Towers is being developed by Glomac Al Batha Sdn Bhd, a joint-venture company between Glomac Bhd (51%) and Al Batha Real Estate Company (49%), a member of the Al Batha group, one of the largest private business groups in the United Arab Emirates.
Asked why Glomac was building an office building and not a condominium, Fong said there were already many condominiums in Kuala Lumpur but there was an “acute shortage” of grade A office buildings.
Fong said the building plans had not been approved yet. “We hope to complete it in three years,” he said, adding that the construction cost was around RM200mil.
The proposed Glomac Tower in Kuala Lumpur's Golden Triangle. It will be Glomac's first commercial development within the city centre
“Assuming we sell it at RM1,000 psf, it could fetch us RM550mil (in sales),” he said, adding that there was currently an anomaly between the price of office buildings and condominiums. Instead of the former being more expensive, it is the reverse.
For example, he said, the proposed ONE KL condominium in the KLCC area was recently reported to be selling for RM1,600 psf, 60% more than the RM1,000 psf estimated for Glomac Tower.
Fong said Glomac Tower, with a net floor area of more than 500,000 sq ft, would have four levels of elevated car park and four levels of basement car park. Net area per floor is above 17,000 sq ft. There will be two retail floors, 30 office floors and three sky restaurant floors, including a unique open-air rooftop restaurant.
Glomac Tower will be built in compliance with the requirements of the Multimedia Super Corridor (MSC) so that an application could later be made for MSC status.
Its building automation system will include an energy efficient air-conditioning system that saves electricity by making its own ice.
Meanwhile, a seven-acre piece of land - near Desa Kiara condominiums - was bought by Glomac for its Glomac Damansara project two weeks ago for RM150 psf.
It will have two blocks of six and eight-storey shop offices, a 15-storey block shop office with a three-storey podium, a 31-storey tower block with three-storey podium and a 29-storey service apartment with podium. There will be about 3,000 car park bays.
Glomac's aggressive drive to snap up prime land reflects its shift from township developments to projects that yield higher profit margins.
Fong said: ”Over the last two months we have received a lot of enquiries from foreigners like Singaporeans, Europeans and Koreans,” he said, adding that Malaysian condominium prices were 10% the price of condominiums in Singapore some of which had hit S$4,000 psf.
