EPF to acquire RRI land for RM2 bil
KUALA LUMPUR, June 12 — The Employees Provident Fund (EPF) will complete its acquisition of agricultural land from the Rubber Research Institute (RRI) in Sungai Buloh for over RM2 billion by month end, making it the owner and master developer of one of the most prime pieces of real estate in the Klang Valley.
The Edge Financial Daily reported today that the federal government will get a further cut of the profits from tracts of land carved out of the 890-hectare site available for development.
Property developers have been eyeing the RRI landbank for a long time but were unable to access it due to it being locked up for agricultural purposes but the land transfer will free it up for other uses, including housing and the 51km-long mass rapid transit (MRT) line from Sungai Buloh to Kajang, the country's most ambitious urban public transport system.
"(The land parcels) are expected to be a mix of freehold and leasehold," the business paper quoted an unnamed executive close to the deal as saying.
The Edge reported the executive saying that the Selangor state government will also benefit from the conversion of land titles as it could get higher income from development land than agricultural land.
The paper also reported that Kwasa Land Sdn Bhd, a wholly-owned unit under EPF heading the overall project development, has said it will soon be holding tenders for the land parcels in a joint-development exercise aimed to grow the pension fund's coffers in the long term.
Property prices in urban areas, such as Penang and Kuala Lumpur, rose by up to 40 per cent in 2010, fuelled by low interest rates and a surge in speculative buying, although prices grew slower last year due to dampened sentiment from tightening measures such as a hike in the real property gains tax for early disposals.
Some reports have also estimated that property prices jumped from 5.9 times income in 1989 to 10.9 times in 2010.
The Demographia International Housing Affordability Survey rates markets whose property prices are 5.1 times median income or more as “severely unaffordable”.
The HBA last year warned that an entire generation of young adults are at risk of being locked out of the property market due to runaway house prices.