BY DANIEL KHOO

THAT'S GOING TO BE OUR NEW HOME , said Group CEO Affinbank Holdings Kamarul Ariffin Mohd Jamil to media at the announced its strategic plan todevelop its very own Head Office building with the purchase od a plot of land at Razak Bussinrss Parkin Kuala Lumpur, August 10, 2015. - ROHAIZAT MD DARUS/STAR

KUALA LUMPUR: Affin Holdings Bhd’s banking unit, Affin Bank Bhd, will buy 1.25 acres of land in the Tun Razak Exchange (TRX) from 1Malaysia Development Bhd (1MDB) to build its new headquarters.

The price it will pay KLIFD Sdn Bhd, a subsidiary of 1MDB Real Estate Sdn Bhd (1MDB RE), is RM255mil. This works out to about RM4,699 per sq ft (psf) for the land. 1MDB RE is the master developer of TRX and a wholly owned subsidiary of 1MDB.

According to an announcement by Affin, the parcel of land comes with a plot ratio of 15.2 times. A plot ratio of 15 times indicates that the gross floor area to be built on the parcel is about 15 times or more.

Affin said that the parcel of land had been earmarked for a 35-storey building and would have a gross floor area of 823,439 sq ft with 830 parking bays.

“The purchase price implies a price per gross floor area (GFA) of RM309.67 psf,” it said.

Affin will place a 10% deposit and the balance 90% of the purchase price will be paid upon presentation of the registration title.

Affin also said that its deputy chairman Tan Sri Lodin Wok Kamaruddin, who is also the chairman of 1MDB, had voluntarily abstained from and would continue to abstain from being involved in all deliberations and decision making with regard to the acquisition.

According to Affin, the purchase price is slightly lower than the independent valuation of RM261mil that had been carried out by CH Williams Talhar & Wong.

“We had to negotiate for the price and we do not think this is a bargain for us, as it is only a 2.3% discount to the independent valuation.

“But we think it is a reasonable price and within (our) range. We are quite pleased with this,” Affin Holdings group chief executive officer Kamarul Ariffin Mohd Jamil said at a press conference yesterday.

In May this year, Lembaga Tabung Haji (LTH) had come under scrutiny for acquiring 1.6 acres of land in TRX for RM188.5mil. It was reported that LTH had bought the land at RM2,773 psf and it came with a plot ratio of 10.47 times.

Land transactions in the city centre area close to KLCC are being done at RM3,000 psf and normally come with a plot ratio of between 10 to 12 times.

The parcel of land that Affin has proposed to purchase fronts Jalan Tun Razak and sits at the intersection of two Mass Rapid Transit stations.

“As of now, we do not have a proper home per se and this is a very good opportunity for us to relocate there. We have been presently leasing our office here at Menara Affin for the past 40 years,” said Kamarul.

Kamarul said that the board had given its “unanimous vote” to the purchase, including the independent directors and the directors that had represented its 23.5% shareholder, Hong Kong-based Bank Of East Asia Ltd.

Asked if Lodin had a role to play in the purchase or the events leading up to it, its director Tan Sri Mohd Ghazali Mohd Yusoff said: “He was not involved from the beginning of this.”

“We have visited other sites such as KL Sentral and KLCC but this is the most suitable place and the owner gave us a good offer.”

Lodin was not present at yesterday’s press conference to announce this purchase.

Kamarul further added that the plan to purchase the land in TRX was initiated more than a year ago, and that it was not a decision made recently.

“We are quite confident that notwithstanding the problems at 1MDB, we will still continue with this (purchase). Moreover, the board had unanimously approved this and Lodin had abstained from all deliberations pertaining to this purchase,” Kamarul said.

Pursuant to the purchase of this land, Affin will allocate approximately another RM300mil to construct its new headquarters thereafter.

“The total consideration is about RM600mil, including land and construction, but this is still a preliminary figure. We expect this to be done latest by the end of 2018,” Kamarul added.

The purchase does not require the approval of shareholders or the regulators.