The Lai Meng school building in 2011. (pix by Suhaimi Mohd Yusuf/The Edge)

KUALA LUMPUR (Jan 18): Property developer Magna Prima Bhd is teaming up with Golden Rainbow View Sdn Bhd to jointly develop a mixed development with an estimated gross development value (GDV) of RM1.2 billion, on a 113,963 sq ft site previously occupied by the Lai Meng school here, which fronts the north-western side of Jalan Ampang. The school is currently unoccupied and not being used.

The development land was acquired by Magna Prima’s wholly-owned subsidiary Twinicon (M) Sdn Bhd from Lai Meng Girls School Association in 2014 for RM148.15 million.

Magna Prima explained that over the years, it has been re-evaluating its options on the development land, including the possibility of disposing of the land. Most recently, the group had in June 2022, received an expression of interest to acquire the land at an indicative price of US$69 million (RM303.6 million), but it did not engage further on the expression of interest.

However, Magna Prima said it expects to derive a proforma loss from the proposed joint development as the group no longer intends to develop the land on its own due to high capital commitment. But it views the proposed joint development as a good opportunity as it allows the unlocking and monetisation of land at a consideration that represents a premium of RM201.8 million to the initial cost of investment and premium of 16.67% to the market value.

“For illustration purpose, in the event the group only receives the landowner’s entitlement of RM350 million in accordance to the terms and conditions of the development agreement, the group will record a net proforma loss of RM20.15 million over the 36 months period arising from the proposed joint development,” said Magna Prima.

With the latest proposal, Magna Prima said the Lai Meng school will be demolished to make way for the mixed project. “Geographically, the site of the development land is located within the KL Golden Triangle. It is situated approximately 3km to the north-west of DBKL and about 800m to the north-west of KL City Centre.”