The two jobs it won were: the development and construction of the Kwasa Utama (Plot C8) commercial development worth RM3.15 billion, and the refurbishment and upgrading of facilities at the National Sports Complex in Bukit Jalil, Kuala Lumpur, worth RM1.632 billion.

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Firstly, MRCB told Bursa Malaysia it had entered into a management contract with Kwasa Utama Sdn Bhd (KUSB), under which MRCB was appointed the management contractor for the development and construction of Kwasa Utama — a 29.82 acre commercial development in the new Kwasa Damansara township in Sg Buloh.

KUSB is 95%-owned by the Employees Provident Fund (EPF) and the remaining 5% stake is held by Kwasa Land Sdn Bhd, which is wholly-owned by EPF. In turn, the EPF is the single largest shareholder of MRCB with an approximate 39% stake in the company.

The 29.82-acre Kwasa Utama development, which will span over a period of 12 years from 2016 to 2027, is expected to comprise seven separate development plots. It will feature eight office towers, a hotel, an auditorium and a common facility block.

MRCB’s provisional total contract sum for this construction project is about RM3.1 billion. These buildings will have a collective gross floor area of 7.91 million sq ft, with an estimated gross development cost (GDC) of RM3.87 billion.

MRCB’s group managing director, Tan Sri Mohamad Salim Fateh Din, said MRCB will use its expertise and experience working with appointed professionals in creating a new growth centre for corporate entities and businesses at Kwasa Utama.

“(The proposed) development will cater to the needs of corporate and commercial purchasers, including their requirements for corporate hospitality and conferencing,” he added.

With the signing of the agreement, MRCB will be delivering various project milestones via the overall project management, engineering, procurement, construction and commissioning of works.

“The development which spans over 12 years, will not only allow the group to enhance its construction and engineering project pipeline, but is also expected to provide the group with a steady stream of income over the development and construction period, which in turn is expected to contribute positively to MRCB’s future earnings,” the group said in a filing with Bursa Malaysia today.

The management contract is conditional upon MRCB obtaining its shareholders’ approval for the proposed construction on or before 30 April 2016. The group expects the management contract to become unconditional by the second quarter of 2016.

To recap, in August last year, MRCB was already appointed to jointly undertake with Kwasa Land Sdn Bhd the development of a proposed town centre within Kwasa Damansara measuring a total land area of 64.07 acres identified as Project MX-1.

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Secondly, MRCB was awarded the RM1.632 billion job to regenerate and upgrade the Bukit Jalil National Sports Complex into the Kuala Lumpur Sports City (KL Sports City) for which it will be repaid by the government with three pieces of leasehold land, totalling 92.5 acres nearby.

The job was awarded to MRCB’s Rukun Juang Sdn Bhd, which was chosen by the federal government for offering “the best overall development concept”, after 11 companies submitted proposals in an open nationwide tender, MRCB said in a statement this evening. The tender process was undertaken by the Public Private Partnership Unit (UKAS).

The upgrading project will be undertaken in two phases; the first is to get the Bukit Jalil National Stadium ready to host the 2017 Southeast Asian Games (SEA Games); and subsequently the second phase will commence once the games are over and will create KL Sports City.

The first phase of the project will entail readying the national stadium as well as enhancing the Putra Stadium, the National Aquatic Centre and the National Hockey Stadium and improving integration to the current and existing public transportation links and increasing pedestrian access across the site. It will be completed in 18 months and will begin one week after the necessary approvals are obtained. 

After the SEA Games, the second phase will commence no later than 1 January 2018 — and is slated to complete in three years, consisting of the creation of KL Sports City, a fully integrated sports hub which would include high-performance training facilities, a sports rehabilitation science centre, a youth park, public sports facilities, a sports museum and a sports-focused retail mall.

“The KL Sports City project marks MRCB’s entry into sports and recreational infrastructure and allows us to build on our core strengths of delivering multi-use developments that regenerate areas of national importance. By working in a private-public partnership, we can ensure that our own corporate goals are aligned with the nation’s objective for growth and development,” said MRCB’s group managing director Tan Sri Salim in a press release.

A privatisation agreement (PA) in relation to the job and the transfer of lands was signed in Putrajaya today by Department of Lands and Mines director-general Datuk Dr Sallehuddin Ishak, with Rukun Juang director Kwan Joon Hoe, and Ministry of Youth and Sport’s secretary-general Datuk Jamil Salleh.

MRCB said that Rukun Juang had appointed international stadium expert Populous as the project designer, as it had worked on more than 2,000 projects worth US$30 billion and was a specialist in creating sporting facilities that drew people and communities together.

The first phase would cost RM499.2 million and the second, RM1.1 billion, while the balance of RM31.9 million would be paid to the Federal Government in cash.

In its filing with Bursa Malaysia, MRCB said the transfer of the three tracts located near the Bukit Jalil National Sports Complex to Rukun Juang is in exchange for the RM1.6 billion total cost of the project that the group will bear.

It will be developed into an integrated development with a gross development value (GDV) of RM14.6 billion over 16 years from 2018. The location is nearby to a potential station for the new mass rapid transit (MRT) Line 2.

The contract sum represents a premium of RM31.9 million, equivalent to 2% over the market value of the tracts, but MRCB said it was reasonable, as the lands present it with an opportunity to undertake a mixed development in a fast-developing suburban area of Kuala Lumpur.


A proposed concept for a property development by MRCB on the exchanged land parcels of approximately 92.5 acres.A proposed concept for a property development by MRCB on the exchanged land parcels of approximately 92.5 acres.



Rukun Juang is a 85%-owned unit of MRCB Land Sdn Bhd, which in turn is a wholly-owned subsidiary of MRCB. The remainder 15% is owned by Rasma Contractors.

It is worth noting that among others, MRCB group managing director Tan Sri Salim and Employees Provident Fund (EPF), each hold an 85% indirect stake in Rukun Juang.

Former Federal Territories and Urban Well-being Minister and Lembah Pantai Umno division chief Datuk Seri Raja Nong Chik Raja Zainal Abidin and his wife, Datuk Seri Nafesah Raja Nong Chik Abidin, also each hold a 15% indirect stake in Rukun Juang.

MRCB said Rukun Juang will fund its obligations under the agreement via bank borrowings and/or advances from its shareholders, the quantum of which is yet to be fixed.

Rukun Juang’s issued and paid-up share capital now is only RM300,000, comprising 300,000 shares. Under the PA, it will have to have an issued and paid-up share capital of at least RM5 million to undertake the job.

As such, MRCB Land and Rasma Contractors have agreed to proportionately increase their shareholdings in Rukun Juang to achieve that.

MRCB expects to fund its future subscription of shares in Rukun Juang, and any shareholders’ advances to be provided to fulfil the PA, via internally-generated funds, bank borrowings and/or equity fund raising.

The development plans for the exchanged lands have yet to be finalised at this juncture, but is expected to contribute positively to the company’s earnings and financial position in the future, said MRCB.

“Securing such a strategic land bank with development potential is in line with the company’s strategy of increasing its focus in the property development segment, as its core business,” it added.

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Lastly, MRCB’s wholly-owned property subsidiary MRCB Land Sdn Bhd is expected to fork out RM269.5 million for a 70% stake in CSB Development Sdn Bhd, the joint-venture company that will undertake the development of CCC.

It said MRCB Land has entered into a joint venture agreement with Cyberview Sdn Bhd, a government-owned company wholly-owned by the Minister of Finance for the development. Cyberview will take up the remaining 30% in CSB Development for RM115.5 million.

Cyberview, mandated by the Malaysian government to spearhead the development of Cyberjaya, has earmarked approximately 141.27 acres of land located in Cyberjaya for development of the CCC.

The project sits on a 141-acre freehold land parcel and has an estimated GDV of RM8 to 10 billion. CCC will be developed over the next 15 to 20 years.

CCC is potentially prime urban land being located next to Putrajaya Sentral, which will be an interchange station for MRT Line 2, Express Rail Link (ERL) and [probably even] the proposed Kuala Lumpur-Singapore High Speed Rail (HSR). A station for the new MRT Line 2 is also slated to be built within the CCC.

The project’s first phase is a 150,000 to 200,000 sq ft convention centre for firms in technology-related businesses, said MRCB Land executive director Imran Salim at a recent press conference.

The second phase of the project will span 53.38 acres, construction of which begins in the first half of next year. It has a GDV of RM 5.35 billion.

The inspiration for the convention centre is Fira Barcelona, the Catalan city’s trade fair institution, said Cyberview managing director Faris Yahaya.

“We do not want the public to compare us with convention centres such as Putrajaya International Convention Centre or Kuala Lumpur Convention Centre. We are not competing with the big boys. Our convention centre [affordably] caters to small and medium-sized businesses and technology-based multinational companies (MNCs), Faris added.

“We are not focusing on embellishment or wood cravings, but the space and practicality of the facilities for business,” Imran said adding that over time, the masterplan would be adjusted to meet market needs as businesses came in.

The first phase of CCC will comprise the convention centre, a 300 to 400-room business hotel, retail lots and offices. 

Tan Sri Salim said CCC came about in the “evolution of developing Cyberjaya”, as it was not planned in the original masterplan. “After all these years, we realised the lack of a big, central place for people to congregate so as to complete the ecosystem of Cyberjaya as a technology hub.”

“Our target market for the office lots would be multinational corporations and small-medium enterprises,” said Imran.

The construction of the offices will be adjusted in tandem with market needs and economic trends. The retail centre will comprise mostly food and beverages lots to cater for the hotel and the convention centre,” said Imran.

“Residences will be constructed during the (project’s) later phases, and will comprise lower-medium, medium and high-end products. There will be affordable housing development as well, as part of the statutory requirement,” Imran added.

“The public used to think of Cyberjaya as being very far away. With the future MRT line and various connectivity options such as the Maju Expressway that cuts the commute from KLCC to Cyberjaya to 25 minutes, this will be a game changer for the city here,”said Yahaya.

“We are looking at a (daytime) population of 80,000 in Cyberjaya as of now, and it will only continue to grow from here. Cyberjaya can house about 400,000 people. We are expecting a (daytime) population of close to 100,000 by end of 2016,” said Faris.

As of now, Cyberjaya’s night population stood at 10% of the daytime figure. At least 60% of available land in Cyberjaya has been developed.

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With the CCC project, MRCB’s property arm total GDV stands at between RM35 billion and RM40 billion, which will last the group for the next 20 years, said Imran.

Just last month, Prasarana Malaysia Bhd appointed a joint-venture company comprising MRCB and George Kent (M) Bhd as the project delivery partner (PDP) for the proposed RM9 billion Light Rail Transit Line 3 (LRT3) project.

In April 2015, MRCB surprised the market when it won the deal to buy the 1.86-acre German Embassy Land at Jalan Kia Peng for RM3,188 psf, or RM259.1 million.

Meanwhile, CIMB Research estimates that MRCB’s net gearing could rise from 1.2 times to 1.8 times from these new deals, with downside potential via the group’s ongoing rationalisation. “MRCB’s outstanding external order book (excluding in-house property jobs) stood at RM889 million as at the end of second quarter financial year 2015 (FY15) and should be good for the next two to three years,” it said.

“By our estimates, the projects’ impact on our FY16 to FY17 earnings is negligible if we consider the potential rise in interest costs over the next one to two years arising from the initial funding requirements of all three deals, assuming the majority of it is debt funded,” added CIMB Research.

Shares in MRCB have been on the uptrend since August 21, which saw the stock climb as much as 45 sen or 55.6% to close at its five-month high of RM1.26 yesterday, giving it a market capitalisation of RM2.25 billion.

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