Report and Valuation of

Development
Arab City Melaka, Pulau Melaka,

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 Report and Valuation of Commercial Property Development known as
Arab City Melaka,
Pulau Melaka, Melaka, Malaysia.
Contents

Description Page
1.INTRODUCTION 4
1.1 Terms of Reference
1.2 Date of Valuation
1.3 Definitions
1.4 Qualifications and Disclaimers

2.PROPERTY SEARCH DETAILS 5

2.1 Title Particulars
2.2 Town Planning

3.SITE DETAILS 7
3.1 Description
3.2 Location
3.3 Surrounding Locality
3.4 Services

4.BUILDING DETAILS 10
4.1 Building
4.2 Structural Survey

5.OCCUPANCY STATUS 10
5.1 Tenancy

6.VALUATION METHODOLOGY 11-15

6.1 Basis of Valuation
6.2 Comparables
6.3 Limiting Conditions

APPENDICES 15-32
Ref : 19-0032
Date : 10th May 2019

To
Golden Corporation Heritage Sdn Bhd
No. 108, Jalan Damai, Off Jalan Ampang,
Kuala Lumpur 55000

RE: Report and Value Assessment of Commercial Property Development known as Arab City
Melaka, Pulau Melaka, Melaka, Malaysia.

We forward to you our study per instruction to advise on the current Market Value and Forced Sale
Value (Auction Reserve) of the abovementioned property for funding purpose. The property is
shown in the attached plans and is more fully described in the body of the report.

The subject property was inspected on 3rd May 2019. This report contains an analysis of the
available data. In arriving at the Market Value of the subject property, we have adopted the “Cost
Method Approach” of the valuation. It is our considered opinion that the current Market Value
(MV) of the leasehold unencumbered interest in the subject property with the benefit of
Authorities Certification is as follows :-

MV of Land – RM 446,490,000

MV of Built-up Property – RM 98,352,150

We would also draw your attention to the Limiting Conditions at the end of the report, governing its
use and applications.

Please do not hesitate to contact us if you require any further information or assistance.

Yours Faithfully,
NEOVATE DEVELOPMENTS SDN BHD

…………………………………..
Director
1.INTRODUCTION
1.1 Term of Reference

We have been instructed by Golden Corporation Heritage Sdn Bhd to ascertain the current
Market Value and Forced Sale Value of the subject property for development funding
purposes.

The subject property is a development project comprises of a commercial complex of

Arabic architectural concept - purposed built shopping and entertainment, with leisure
spread of shorefront an oasis lagoon, and multy-storey car-park building.

The subject property was 75% completed, stalled for two years and in the process of
revival of the project construction for completion as designed.

We have appraised the subject property with the benefit of certificate of completion and
compliance and commissioned as tourist destination.

1.2 Date of Valuation

The subject property was inspected by Mr Norazman Yunus on 3rd May 2019. The material
date of valuation for the above exercise is 3rd May 2019.

1.3 Definitions

The term “Market Value” as used is defined as the estimated amount for which a property
should exchange on the date of valuation between a willing buyer and a willing seller in an
arm’s length transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion.

The term “Forced Sale Price” in this context is the price at which interest in the property
can be expected to be sold under auction circumstances at the date of valuation.

1.4 Qualifications and Disclaimers

The Appraiser has no pecuniary interest in the said property past, present or prospective,
and the opinion expressed is free of any bias in this regard.

This Assessment has been made in line with the Malaysian Valuation Standard guide.

Any encumbrance, restriction or other factor not specifically referred to in this report,
which is or should be revealed by the appropriate land and title searches and which would,
in the opinion of the client’s solicitor, affect the value or marketability of the property,
should be referred to the Appraiser for comment before any advancement is made.

This Assessment represents our opinion of the value as at the date of the valuation. It must
be recognised that the real estate market fluctuates with internal and external influences and
the valuation should be reviewed at regular intervals.
2.PROPERTY SEARCH DETAILS
2.1 Title Particulars

The said property is a development project that site a state land at Lot 100, District of
Melaka Tengah, Melaka comprising of 4.2 acres of land and 4.0 acres of state approved
reclaimed shore-land to be part of the development project

Land Office Reference : PTG (M) 00125718

Title Reference : 040177HSD00071887

Title No : H.S.(D) 71887 No PT : 831

State : Melaka District : Melaka Tengah Town : Bandaraya Melaka

Land Size : 16997 m2 ( 4.2 acres ) plus Reclaimation Area 4 acres

Category of Land Use : Building

Tenure : 99 years Leasehold expiring 29.11.2111

Restriction in Interest : The land cannot be transferred or lease out without State Approval

Registered Owner : Ketua Menteri Melaka (Perbadanan) / CMI

Development Scheme : Arab City Project

Quit Rent : RM 23,328.00

Annexure :
1. Development Agreement ( Principal Agreement ) dated 25.12.2009

2. Supplementary Agreement dated 9.10.2009

3. Reclaimation Agreement dated 30.10.2010

2.2 Town Planning

The subject property is situated within an area designated for commercial purpose.

The subject property is an approved development project by MBMB ( Ref :

MBMB/JKB.03022/04/2009(14)
3.SITE DETAILS
3.1 Description

The subject property is a development project of a Arabic-themed retail and leisure mall
comprises of a 3-storey commercial retail complex, 5-storey carpark building and an aosis
lagoon which was 75% completed and now currently being revived to complete the project
construction.

Above : Arab City Project model

On site inspection, the state of affairs of the subject property of the completed portion are
shown in APPENDIX.

The subject property detail description is in APPENDIX.

3.2 Location

The subject property is located in Pulau Melaka, Historical City of Melaka, Melaka.

Pulau Melaka is a man-made island. The island has a bridge linking to the mainland. It is
about 1 ½ hour drive from Kuala Lumpur city centre; One hour road journey from Kuala
Lumpur International Airport; 1 ½ hour travels from Singapore ; and accessible by boat
along the Straits of Melaka.

It is accessible from various major arterial roads connecting to the city centre of City of
Melaka.

3.3 Surrounding Locality

Surrounding developments within the immediate vicinity are 4 storey shop-offices,

condominiums, shops/apartments, hotels, shopping malls and tourist destination/attraction
of floating mosque and Sea Lion theme park.
 On bigger radius, it is easy to get around on foot or trishaw of the City of Melaka urban
landscape of mix of old and new historical buildings standing side by side with ultra-
modern shopping centres and business commercials parks.

Notable top spots such as Jonker Walk ( vibrant night market), A’Famosa Fort ( Portuguese
historical mark), The Stadthuys Residence ( Dutch historical mark), Bukit Cina ( Chinese
ancestral burial ground), Menara Taming Sari ( Gyro tower for 360 degree panoramic view
of Melaka town), Baba Nyonya Heritage Muzeum ; and
about 15km ride to Melaka Sultanate Palace, Butterfly & Reptile Sanctuary and, Mini
Malaysia & ASEAN Cultural Park in Air Keroh.

3.4 Services

Mains water, electricity supplies and telephone lines are available in the vicinity and ready
for connection.

The development project will complete all the necessary internal infrastructure and street
level landscaping as part and parcel of the development.

Street lighting, road maintenance, sewerage disposal and rubbish collection are provided by
the MBMB and respective agencies.

Public transportation in the form of buses and taxis are easily available in the vicinity.
4.BUILDING DETAILS
4.1 Building

At the date of inspection, the subject property is as at-shelved construction remains which
is 75% complete.

The following building description is based on information provided to us. The information
as provided is assumed to be correct for the purpose of this appraisal exercise.

The typical building specification and finishes are as follows:-

Item Description of construction and finishes

Structure Reinforce concrete
Wall Cement Bricks
Ceiling Plaster ceiling
Floor Concrete
Door Timber frame
Windows Glass

The Gross Floor Area of the subject property as stated in the construction drawings.

4.2 Structural Survey

We were advised that the development project is going to be revived to continue from
where the construction was being stalled at 75% completion.

It should be noted that we have not undertaken any form of survey, structural or otherwise
and the inspections are based purely on visual observations from ground level, unless
otherwise stated.
Generally, the building is acceptably presented, albeit with some wants of repair noted
including, weathered hardwood window frames, which need treating, weathered external
joinery (which are affected by wet rot).

The Floor Plan of the subject property is attached together with photographs of the subject
property in the APPENDIX.

5.OCCUPANCY STATUS
5.1 Tenancy

At the date of inspection, the subject property is at shelved-construction of 75% complete

as advised.
6.VALUATION METHODOLOGY
6.1 Basis of Valuation

The valuation approach to the subject property consider the private financing investment
(PFI) on the specialised building specific towards investment returns on tourism.
The subject property is an approved tourism project development of a landmark retail and
leisure destination with the unique Arab architecture concept that portrays the authentic and
rich tapestry of Arabian culture.
Arabic-styled cultural enclave is designed to house 200 bazaars, 15 authentic Middle East
restaurants and cafes, Arabic health and beauty spas, and an ancient Egyptian museum.
The development also includes a Malacca One Condo and Arab Oasis Hotel, an over 4 acres
of prime waterfront land.

We have adopted the ‘Cost Method Approach” in formulating our opinion of the current
Market Value of the subject property.

1- Land:
Land valuation is based on most recent land transaction values of surrounding plots in
the immediate vicinity with similar features (commercial waterfront). The average price
per sq. ft. has been found to be RM1,250.00.
Land Size was found to be 356,700 sq ft. in total.

Land Market Valuation (MV) = 356,700 sq ft x RM1,250.00 = RM455,875,000

2- Built-up Property

It should be appreciated that an assessment of the likely costs of fully reinstating a property
is a complex and detailed exercise usually undertaken by a building or quantity surveyor.

The following estimate is provided purely for guidance purposes to assist the named client
in their consideration of the stated business proposal. Whilst the estimate provided allows
for the approximate costs of demolition, debris removal and professional fees, and assumes
the use of modern materials, construction techniques and compliance with all current
building regulations, it makes no allowance for any alterations to the layout or
configuration of the property which may be required for the on-going use of the premises.
We noted the publication of Malaysian Construction Cost Handbook Malaysia 2016 ( KDN
PP10466/05/2013(032500)) the followings

Average construction cost of main development area in the country, for Commercial /
Office in the category of retail malls, high end
Region RM / m2 Average RM /ft2
Kuala Lumpur 1910 - 2400 200
Johor Bahru 2790 - 3620 300
Penang 2120 - 2620 220

We assume average of RM 240 psf and adjusted by 10% allowance for building
construction cost in Melaka in consideration of supply logistic distance from main active
areas above.

On these specific assumptions, we suggest that the reinstatement figure for the existing
structure (exclusive of GST) should be as per calculation model below.
 COST METHOD ASSESSMENT

PROJECT ARAB CITY MELAKA

Assumption
1. All measurement roundup from drawing information
2. Unit costs are typical construction average and conservative

Development Parameters
Land Area : 8.2 acres 357,192 fs
Plot ratio : 1.7 ( Building Complex) 1.5 (Overall)
Total GFA : fs

Development Cost
Building Cost Built-up fs Unit price RM/pfs Total RM
Commercial Block 243,793 264 64,361,314
Oasis lagoon Block 98,225 198 19,448,556
Carpark 111,563 224 25,034,728
Infrastructure/Green/Circulation 85,826 132 11,328,998
SubTotal Building Cost 539,407 120,173,597

Pre- Development Cost

Land cost 8,500,000
Authority Contribution & Approval fees 1.5% STBC 1,802,604
Survey & Soil Investigation 350,000
Other pre-development cost 300,000
SubTotal Pre-DC 10,952,604

Development Cost
Facilities cost 35,000,000
Project management 3.5% build+infra+facility 5,431,076
Consultancy fees 6.5% build+infra+facility 10,086,284
Legal & stamping fees 1.5% STBC 2,327,604
Sales & Marketting cost 2.5% STBC 3,879,340
Advertising & Promotional cost 0.8% STBC 1,241,389
Contigencies 5.0% build+infra+facility 7,758,680
SubTotal DC 65,724,372

TOTAL GDC 196,850,573

If no work continues from the condition inspected, the probable value for sale shall be 75%
of the calculated Building Cost + Pre Development Cost which results as RM 98,352,150.

6.2 Comparables

We also take into consideration the followings themed project development in the country
for Comparable Evidence – Capital Values

Relevant comparable evidence includes the following (due to the confidential basis on
which much of our comparable information is obtained and held, we are only able to
divulge information which is already within the public domain):

Project Description Size sf Value RM Year

Cheras Leisure Retail shopping 300,000 180 million 1995
Mall, KL / Entertainment
Mall
 Berjaya Times Indoor Theme 136,000 100 million 2014
Square, KL Park
Business
Commercial
Leisure Park @ Shopping / 24 acres 170 million 2013
I-City, Leisure theme
Selangor mall
LegoLand, Lego Theme 76 acres 250 million 2012
Johor Park
Genting 20th Century 220 acres 300 million 2018
Resorts World, Fox World
Pahang Entertaiment
Theme Park

It was recognised that the projects carry on their own specifics and “branding” which
entails their capital values.

6.3 Limiting Conditions

STANDARD PRACTICE
This Appraisal Report is carried out with guidelines of standard practice in the country.

MEASUREMENTS
All measurements are based on approved drawings available and standard practice
reference

CONFIDENTIALITY
This report is confidential to the Client or to whom it is addressed and for specific purpose
to which it refers. It may only be disclosed to other professional advisors assisting the
Client in respect of that purpose, but the Client shall not disclose the report to any other
person.
Neither the whole, nor any part of the Valuation Report or Certificate or any reference
there to may be included in any published document, circular or statement nor published in
any way without our prior written approval of the form and context in which it may appear.
We shall bear no responsibility nor be held liable to any party in any manner whatsoever in
the event of any unauthorised publication of the Valuation Report, whether in part or in
whole.

USE OF REPORT
The opinion of value expressed in this report shall only be used by the addressee for the
purpose stated or intended in this Report. We are not responsible for any consequences
arising from the Valuation Report being relied upon by any other party whatsoever for any
information therein being quoted out of context.

LEGAL TITLE
Whilst we may have inspected the title of the property as recorded in the Registry
Document Title, we cannot accept any responsibility of its legal validity or as to the
accuracy and timeliness of the information extracted or obtained from the relevant Land
Registry/Office.
SITE SURVEYS
We have not conducted any land survey to ascertain the actual site boundaries. For the
purpose of this valuation, we have assumed that the dimensions correspond with those
shown in the title document, certified plan or any relevant agreement.

STRUCTURAL SURVEYS
While due care has been taken to note building defects in the course of inspection, no
structural surveys were made nor any inspection of woodwork or other parts of the
structure which were covered or inaccessible were made. We are therefore unable to
express an opinion or advice on the condition of uninspected part and this Report should
not be taken as making any implied representation or statement on such parts. Whilst any
defects or items of disrepair may be noted during the course of inspection, we are unable to
give assurance in respect of any rot, termite or pest infestation or other hidden defects.

DELETERIOUS OR HAZARDOUS MATERIALS

No investigations have been carried out to determine whether or not any deleterious or
hazardous materials had been used in the construction of the property(building) or had
since been incorporated and we are, therefore, unable to account or report any such
material in our report.

CONTAMINATION
We have not carried out investigations into the past or present uses of either property or of
any neighbouring land to establish whether there has been any contamination of there is
any potential for contamination to the property and are therefore, unable to account and
report for such contamination in our report.

DISEASE OR INFESTATION
Whilst due care is taken to note the presence of any disease of infestation, we have not
carried out any tests to ascertain possible latent infestations or disease affecting the
premises. We are therefore unable to account for such in our report.

LEASES AND TENANCIES

Where properties are valued with the benefit of letting, it is therefore assumed that the
lessees or tenants are capable of meeting their obligations under the lease or tenancy and
that there are no arrears of rent or undisclosed breaches of covenants and/or warranties

DEVELOPMENT AGREEMENTS
Unless otherwise stated, no considerations are made in our evaluation for any joint venture
agreement, development right agreement or other similar contract

OUTSTANDING DEBTS
In the case of buildings where work are in hands or have recently completed, no allowance
were made for any liability already incurred, but not yet discharged, in respect of
completed works, or obligations in favour of contractors, sub-contractors or any members
of the professional or design team.

TAXATION, ENCUMBRANCES, STATUTORY NOTICES OR OUTGOINGS

Unless otherwise stated, no allowances are made in our valuation for any expense of
realization or for taxation which might arise of a disposal, deemed or otherwise. We have
considered the property as if free and clear of all charges, lien and all other encumbrances
which may be secured thereon. We also assumed the property is free of statutory notices
and outgoings.
 VALIDITY PERIOD OF VALUATION REPORT
This Valuation is current as at the date of valuation only. The value assessed herein may
change significantly and unexpectedly over relatively short period ( including as a result of
general market movements or factors specific to the particular property). We do not accept
liability for losses arising from such subsequent changes in value.

ATTENDANCE
The instruction and the valuation assignment do not automatically bind us to attendance in
court or to appear in any enquiry before any government or statutory bodies in connection
with Valuation unless mutually agreed upon between the Client and the Company when the
instruction were given.

APPENDICES
Appendix 1 Key Plan
Appendix 2 Location Plan
Appendix 3 Site Plan
Appendix 4 Land Title
Appendix 5 Development Agreement
Appendix 6 Reclaimation Agreement
Appendix 7 Technical Drawings
Appendix 8 Property Floor Plan
Appendix 9 Photographs of the Property
Appendix 10 REFERENCE
Appendix 1 : KEY PLAN
Appendix 2 : LOCATION PLAN
Appendix 3 : SITE PLAN
Appendix 4 : LAND TITLE /1
Appendix 4 : LAND TITLE /2
Appendix 4 : LAND TITLE /3
Appendix 5 : DEVELOPMENT AGREEMENT
Appendix 6 : RECLAIMATION AGREEMENT
Appendix 7 : TECHNICAL DRAWINGS
Appendix 8 : PROPERTY FLOOR PLAN / 1
Appendix 8 : PROPERTY FLOOR PLAN / 2
 Appendix 9 : PROPERTY PHOTOGRAPHS /1

I. Snapshots of Completed Work

Building Front, Main Entrance

CarPark Building and Arab City Complex

Appendix 9 : PROPERTY PHOTOGRAPHS /2

CarPark Building Connecting bridge from CarPark

Appendix 9 : PROPERTY PHOTOGRAPHS /3

Building Sea-frontage

Inside
Arab City Complex
Appendix 10 : REFERENCE /1
Appendix 10 : REFERENCE /2
Appendix 10 : REFERENCE /3
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