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KWAP to purchase TRX land at reduced price

KWAP to purchase TRX land at reduced price
If the agreement between 1MDB and KWAP is inked, the latter is expected to fork out 10 per cent out the price to the depositors and the balance to be paid after the building is completed. - File Photo
KUALA LUMPUR: The government-owned retirement fund, Kumpulan Wang Persaraan is said to have signed an agreement to purchase a plot of land and building to be made as its headquarters at the Tun Razak Exchange (TRX) at 15 per cent lower compared to what Lembaga Tabung Haji (TH) to 1Malaysia Development Berhad (1MDB), The Star reported.

The English daily quoted a source, citing that KWAP has agreed to pay between RM1bil.and RM1.2bil.to develop a 40-storey building while the land had been tagged at RM2,300-per square feet.
Prior to this, TH paid 1MBD RM2,774 per square feet or RM188.5mil. for 0.64-hectare TRX-owned land.

“The main agreement was the beginning of its sale and purchase (S&P) agreement. Agreement terms were rigid, KWAP had to only pay 10 per cent of its initial payment and the remaining balance after the building is completed,” wrote The Star quoting a source who prefers anonymity.
In the report, the daily was quoted as saying that the rationale behind the purchase was due to the fact that it is renting at Tun Razak Foundation Tower owned by the Tun Razak Foundation and Employees Provident Fund (EPF).

“KWAP wishes to know where the market exists, especially when it was designed to be an Islamic financial hub,” said the source.

The source also disclosed, the S&P has not been signed, the agreement terms on the purchase of the building and land would be more prudent than the agreement between 1MDB and TH.

“KWAP will be forking out 10 per cent of the price to the depositors and the money will be credited into an escrow account.”

The source also said that the new KWAP building will be located adjacent to an underground Mass Rapid Transit (MRT) which will be developed on TRX.

The station is expected to be the longest line covering Sungai Buloh-Kajang MRT which is still under construction.

Last week, TH has decided to purchase a plot of land from 1MDB at TRX after the deal had caused ripples among various quarters including former Prime Minister, Tun Dr Mahathir Mohamad and UMNO Youth.

Some quarters claimed that TH’s move to purchase the 0.64-hectare land to keep the debt-stricken 1MDB afloat.

Last Saturday, TH Chairman Datuk Seri Abdul Azeez Abdul Rahim issued a statement that TH will be selling off the land at the price of RM188.5mil.