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Property News

Plaza Rakyat to be redeveloped soon

The Government will look after the interests of original buyers of the abandoned Plaza Rakyat project, assured Deputy Federal Territories Minister Datuk Loga Bala Mohan.

He explained that a clause was inserted in the sales and purchase agreement between the project’s new developer and Kuala Lumpur City Hall (DBKL) to safeguard original buyers.

Loga Bala said only when the issue of compensation to buyers was resolved, would the Government allow the project to start.

“DBKL is the one approving the plans and we will ensure that the new developer fulfils their obligations to the original buyers of the project.

“Having said that, the buyers should be reasonable in their claims and not expect the impossible,” Loga Bala said, adding that former buyers should be getting what they put into the project initially.

Loga Bala said he was informed that some buyers who bought units more than 20 years ago, wanted to be compensated at the current market price.

He added that DBKL and the new developer (as the landowner) did not have any legal obligation towards those original buyers.

“You can still purchase a unit from the project today but at the current market rate; the RM400,000 can be off-set against the new purchase price,” he said, adding that the original buyers would have to pay the difference between the initial buying price and current selling price.

Loga Bala advised buyers who were interested in purchasing units to contact the developer directly.

“They must understand that DBKL has already sold the land and has no further rights to it,” he said.

Since the beginning of January, about 104 of the 211 original buyers were issued offer letters by the new developer and the process is ongoing.

The new developer, Profit Consortium Sdn Bhd, signed a sale and purchase agreement with DBKL to take over the 6.2ha site for RM740mil in October 2015. RM40mil from the amount was allocated to resolve compensation issues.

Lawyers acting for the new developer said DBKL and Profit Consortium had no legal obligation to pay as the sales and purchase agreement was signed between the buyers and previous developer Plaza Rakyat Sdn Bhd (PRSB) which had since gone bankrupt.

Plaza Rakyat was abandoned in 1997 after it was 30% completed as PRSB ran into financial difficulties during the 1997/1998 Asian financial crisis.

The Government decided to terminate PRSB’s contract in 2010, 12 years after the company abandoned the mixed-development project.

Subsequently, PRSB went into receivership and came under the administration of a consortium of lender banks.

Meanwhile, Loga Bala said Profit Consortium had applied for planning permission for their development.

“They have amended their previous plan. Their latest proposed plan features five skyscrapers,” he disclosed.

There will be a 96-storey tower, comprising 10-storey office space, 50-storey service apartments and 26-storey hotel.

The rest of the towers will be 70, 60, 58, and 52 storeys.

Source: TheStar.com.my

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