The infrastructure cost for the Tun Razak Exchange (TRX) is estimated at RM2bil with about 10 pre-qualified contractors who are eyeing the earthwork packages of the overall project.
UOBKayHian said in a report that as the land had a gradient which required a sizeable amount of earth work, the first RM1bil would be spent on earthwork and basement works, while the remaining RM1bil would go to external infrastructure works and rejuvenation of the surrounding areas of TRX, including Jalan Imbi, in order to enhance connectivity.
“1Malaysia Development Bhd (1MDB) has not decided on the source of funding as it is still deliberating on a few available options. However, a portion of this is likely to come from foreign direct investments (FDI),” it said.
It said currently ground clearing works on the land were ongoing and the first physical construction would commence in mid-2013.
“We understand there are about three packages comprising earthwork, basement and civil works in phase one. We believe that the earthwork packages could be significant, with packages valued at RM500mil to RM1bil in total,” it said
It opined that the potential winner was WCT Bhd, which could leverage on its expertise and track record from previous jobs in Iskandar, KLIA and Vale to stand a better chance in securing the earthwork packages.
“Other potential winners are IJM Corp Bhd and Mudajaya Bhd, we believe. Property developers will benefit as well because of its location and connectivity. Other than being located in a prime area, the development will also feature a dedicated MRT (mass rapid transit) station, and an existing and upcoming network of public transportation systems,” it said.
It added these would greatly benefit developers who have developments or landbanks around the area, which include Sunway Bhd and Boustead Bhd (potential of replicating The Curve in their landbank near TRX).
“We are optimistic on the development of TRX, given its close proximity to the heart of Kuala Lumpur and the concept offered. TRX will be the new international hub for finance and professional services that will also house a right mix of government intuitions, top global institutions and support services companies,” it said.
It said the first phase of development would kick off with prime Grade A office towers, offering a gross floor area of between 750,000 sq ft to 1.2 million sq ft depending on demand.
“We understand that there has been positive demand for TRX’s Grade-A offices, especially from the multi-national financial institutions that view TRX as an avenue to set up new hubs to support future growth. Some of the potential tenants are currently not present in Malaysia,” it said.
To make TRX a “work-live-and-play” area, it said the development also offers a retail mall with up to 1.5 million sq ft (to be done in phases) of net lettable area (NLA), residential blocks and a hotel and is expected to be completed by 2017.