Desa Kudalari condo could make history

KUALA LUMPUR: CH Williams Talhar and Wong (WTW), which has been appointed by the majority of owners of units in the 30-year-old Desa Kudalari condominium, is calling for submissions of interest for what may be the country’s first en masse sale of a strata property.
Developed by Tan & Tan Developments Bhd, Desa Kudalari was the first high-rise condominium to be built in Kuala Lumpur, getting its name from its location overlooking the former Kuala Lumpur race course.
It comprises a 19-storey condominium tower and four blocks of three-storey buildings built on 7.35 acres of freehold land. There are a total of 186 units. At present, there are some 140 owners and the condominium is 70% occupied.
WTW deputy managing director Danny Yeo said the owners approached the firm to explore various options about a year ago and it held several meetings with the owners before deciding on an en masse sale.
“We have been getting a lot of interest from potential bidders. We are in the process of going through and doing presentations to them, getting them fully aware of what the whole process is about and what we’re doing.
“Thereafter, we will see the submissions coming in. We will know by April 27 when the closing comes, how many will submit their expressions of interest,” he told reporters at a briefing yesterday.
Yeo said although there have been attempts at en masse sale in other areas, they never got off the ground as the process is difficult and lengthy.
“If this works, it’s going to be the first time ever that we have a condominium that has been stratified and sold to more than 100 different owners, all coming together to sell and realise the underlying value of their assets,” he noted.
According to Yeo, unlike Singapore and Hong Kong where legislation exists to compel owners to sell, the owners here have to collectively reach an agreement on how to conduct the sale process.
Expressions of interest have been received from many property developers as well as funds, both local and foreign, including parties from Singapore.
WTW will release the information memorandum to shortlisted bidders by May 11, after which they will submit their proposals for the land. The entire process is expected to be completed by October 2016.
According to Yeo, the last transacted price within the project was RM1,250 per square foot (psf) in a sale done last year. Based on WTW’s observation, projects in the surrounding area have fetched prices as high as RM3,573 psf.
WTW’s calculations show that the RM1,250 psf transacted price translates into a land price of RM960 psf, which is a far cry from what owners could potentially get from the en masse sale, based on the indicative value of between RM2,000 psf and RM3,500 psf.
Yeo said shortlisted bidders will be invited to bid at different levels whereby different prices could be proposed for acceptance by the unit owners. However, he is confident the majority, if not all, of the owners will agree to the en masse sale as over 90% of them have indicated their intention to sell.