Affin Holdings Bhd‘s banking unit Affin Bank Bhd is acquiring a tract of land measuring 54,266 sq ft in the Tun Razak Exchange (TRX) for its new headquarters (HQ), for MYR255 million ($64 million) or MYR4,699.07 per sq ft.
Affin Bank managing director and chief executive officer (CEO) Kamarul Ariffin Mohd Jamil told local reporters on Monday that the development of the new HQ will have a gross floor area (GFA) of 823,439 sq ft and at the purchase price of MYR255 million, that means the price per gross floor area would be MYR309.67 per sq ft, while the plot ratio will be 15.2 times.
“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 said.
He added that the land has been independently valued at MYR261 million.
Meanwhile, TRX said in its press statement that Affin Bank’s new HQ will be located within the district’s Financial Quarter following the signing of a sale and purchase agreement (SPA).
The plot is earmarked for a 35-storey prime grade A office block and the site is 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, it said.
The SPA was signed following an extensive negotiations that began in 2012, and covers the development rights to build a commercial tower, TRX said.
Responding to the acquisition, analysts noted that the MYR255 million land acquisition is affordable for the group’s banking arm, Affin Bank Bhd, although the deal itself is pricey.
Hong Leong Investment Bank Research (HLIB Research) said the purchase consideration was only 0.4 per cent of total assets but the acquisition price was considered high given its price on a per square feet (psf) basis.
According to HLIB Research, Affin’s purchase price of MYR4,699 psf was higher than recent transactions within the vicinity, such as Malaysian Resources Corp Bhd’s (MRCB) acquisition of the German embassy land at MYR3,182 psf in April 2015, Lembaga Tabung Haji’s acquisition of land in TRX for MYR2,780 psf and Mulia Group’s acquisition of land in TRX for MYR4,490 psf in May 2015.
Separately, 1MDB said in a statement on Monday that it is now undertaking due diligence of shortlisted local and international parties in relation to the sale of its investment in Edra Global Energy Bhd.