NEW DAWNS

Malaysia 2016 | CONSTRUCTION & REAL ESTATE | FOCUS: BUKIT BINTANG CITY CENTRE

A number of major development projects have been announced this year as part of the government's Economic Transformation Programme (ETP) to propel Malaysia into a high-income nation by 2020.

In early 2015, government-linked property developer UDA Holdings entered into a shareholders' agreement with the Employees Provident Fund (EPF), the country's largest pension fund, and Eco World Development Group to form BBCC Development Sdn Bhd, a special-purpose vehicle designed to redevelop the site where Kuala Lumpur's Pudu Jail once stood. The $2 billion project, which has been named the Bukit Bintang City Centre (BBCC), will comprise residential, retail, entertainment, and office space, as well as several hotels and serviced residences.

Strategically located near the capital's bustling Bukit Bintang area, adjacent to the so-called “Golden Triangle” encompassing the iconic Petronas Twin Towers, the Kuala Lumpur Convention Centre, and KLCC Park, the 7.85ha prime area was until recently a medium-security prison complex built between 1891 and 1895 by the British Colonial government on a former Chinese cemetery that fouled the prison's water supply for decades. The prison initially housed male and female inmates serving short sentences. Later it was used to incarcerate drug offenders and other criminals, while the prison's grounds were used to administer corporal punishment. During the Second World War, allied prisoners of war were held in the prison by Japanese occupation forces. The prison was the site of a protracted cholera outbreak in 1985, and an infamous six-day siege in 1986, when a group of prisoners held two members of staff hostage. Pudu Jail was officially closed in 1996 and the decision to demolish it was made in 2009 despite calls to preserve it as a national heritage site. The prison was demolished in phases until 2012, but the main gate and mural wall still stand and can be observed when passing by the busy Jalan Pudu.

Redevelopment was first proposed in 2010. UDA Holdings, which is under the Ministry of Finance, initially signed an agreement with China-based Everbright International Construction but later appointed Eco World as delivery partner, following a brief Request For Proposal (RFP) between 2013-2014 during which it failed to find a suitable candidate. Some controversy surrounding the appointment of Eco World still remains; however, UDA's experience in carrying out similar-scale projects and the expertise of key members previously involved in London's Battersea Power Station Redevelopment project were cited as reasons for the nomination. Eco World has also committed to award at least 50% of the contract work to qualified Bumiputera (ethnic Malay) contractors.

Approval for the development was granted by Kuala Lumpur City Hall earlier this year. Construction works for Phase I of the BBCC, which includes strata offices, several hotels, high-rise residences, and a lifestyle mall, will start by the end of 2015 and total completion of the project is expected in around 8 years.

UDA Holdings and Eco World each have a 40% stake in the project, with the remaining 20% belonging to the EPF. Its strategic location and offering, as well as surrounding transport infrastructure give reasons for the developers to be upbeat about the BBCC's prospects. The site benefits from access to major roads and public transportation through the nearby Pudu Light Rapid Transit (LRT) station. The first line of the Klang Valley Mass Rapid Transit (MRT) project, which is due to be completed by 2017, will also pass by the site and further improve the BBCC's livability. Despite a recent slowdown in the property market, Eco World expects the new addition to its portfolio, which includes other prime development projects within the Greater Kuala Lumpur area as well as in the economic region of Iskandar Malaysia in Johor and in the state of Penang, to help it reach is yearly sales target of $1.6 billion. The redevelopment of Pudu Jail is one of the projects in the Greater Kuala Lumpur/Klang Valley National Key Economic Area (NKEA), which seeks to transform the capital into a world-class metropolis.