LAND DEVELOPMENT PROCESS IN MALAYSIA Looking from the Malaysian land administrative perspective, land development in Malaysia simply

means the change of original use of any alienated land that effects its restriction in interest, express conditions and category of land use as opposed to what has been earlier approved by the State Authority upon alienation (Abd Kadir Al !a", #$$%&' (nterestingly, land development is no where mentioned under the )ational Land *ode ()L*& which is the governing code for land administration in Malaysia' +nder the *ode, land development however takes place in one or more of the following forms, (a& -ariation of conditions, restrictions and categories (Section #./& (b& Sub division (Sections #0% 1 #0$& (c& 2artition (Sections #/3 1 #/%& (d& Amalgamation (Sections #/4 #%3& (e& Simultaneous applications for sub division and variation of conditions, restrictions and categories (Section #./A&, and (f& Surrender and re alienation special provisions (Sections .3/A 1 .3/!& 5hus, in cases where the land chosen or ac6uired for the purpose of development is still in its agriculture status, the application for the conversion (to building or industrial status&, sub division, partition or amalgamation of land, wherever applicable, must be obtained first before any actual development can take place' (n Malaysia, there have been regular occurrences in the past whereby decision for land development was initiated by the government especially if it is recogni7ed that development of certain land not necessarily idle or under developed, is essential in fulfilling certain urban planning policies of the government' 5wo good examples are the ac6uisition of urban land for the light rail transit pro"ect and the ac6uisition of mainly estate land for the 2utra"aya development' (n some cases however, even though the government initiates the development plan which may involve ac6uisition of private

owned land, the implementation of the actual development is still usually offered to private developers' 5he stages involved in land development for this instance whereby the state government played the role as the initiator and the role of the developer was taken by a private entity' Property Development and the Need For Re-development *losely related to the term 8Land 9evelopment: is the term 82roperty 9evelopment:' 5here are various definitions by scholars on the term ;2roperty 9evelopment<' 5he one that best encapsulates its meaning and processes involved is given as follows, 2roperty development is a process that involves changing or intensifying the use of land to produce buildings for occupation' 2roperty development is an exciting, at times frustrating, complex activity involving the use of scarce resources' (t is a high risk activity which often involves large sums of money tied up in the production process, providing a product which is relatively indivisible' 5he performances of the economy, at both national and local levels, directly influence the process' *adman and 5opping (#,#$$%& 9evelopment comprises the following aspects, (i& (ii& (iii& (iv& (v& (vi& 2erception and estimation on demand for various categories of new building (dentifying and ensuring safety of site before building is built on it to meet the demand 9esigning accommodation to meet the demand for the identified site Long term or short term financing to fund the ac6uisition of and construction on the site 9esign management and construction, and Leasing out and management of completed building': =n the other hand, the 5own and *ountry 2lanning Act #$>4 (Act #>.& of Malaysia defines property development as the carrying out of any building, engineering, mining, industrial or other similar operations in on, over or under land, or the making of

any material change in the use of any buildings or other land, or the subdivision or amalgamation of lands' 5hus, in broad terms, development can be divided into two categories, one being the carrying out of physical operations such as building or engineering works, and the second the making of a material change of use (*adman et al., #$$/& 2roperty development can be divided into three prominent stages, namely, #& .& 0& 2re development stage comprising sub stages of idea initiation (decision to develop&, site selection, feasibility, financing and planning consents 9evelopment stage comprising sub stages of tendering, construction, pro"ect management, leasing, financing and sale (disposal& 2ost development stage comprising sub stages of maintenance, management, leasing, financing and sale (disposal& =n the other hand, there is also new school of thoughts (5an, #$$?& that contend that property development contains only two prominent stages@ pre development stage which combines all the sub stages in the old school of thoughts< pre development and development stages@ and post development stage comprising the same sub stages identified by the old school of thoughts' 2erhaps the definition that is more relevant to be looked into in relation to the sub"ect matter of this study is the one given by Ayrne and *adman (#$?/& who have divided the development process based on the perspective of uncertainty analysis which relate to the aspect of viability of a development into three stages, #' Ac6uisition (n this stage, development process involves land ac6uisition upon which the development is to be carried out' 5here exists the element of uncertainty in this stage due to physical features of the land, restriction in interest in the land ownership which may benefit the land or otherwise and natural features and type of land use allowed or approved by the local planning authority'

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2roduction 5his stage is when the construction of building takes place and the risk and

uncertainty that exists here is in the form of construction cost which constitutes the second capital outlay' As such the provision for risk is included when deciding on the building contract'

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9isposal 5his stage is when the completed building is owner occupied, single or multi

occupied or disposed of as investment item' Bisk and uncertainty exist in this stage when disposal is by way of renting and selling whereby rental and return on investment and purchase price contain risk element since the result of the development must be produced first even though the developer cannot guarantee or know for sure that the stability of the market at the beginning of the development is to last right till the disposal stage' 5his article written by , Sr Puan Nik Nazariah bte Nik Jaafar Associate 9irector of )(LA( !AB5A *=)S+L5A)5 S9) A!9 Besearch 9epartment of )!*SA .% Ceb .33$'

STATE OVERNMENT Tender Comm!ttee

9ecision 5o 2rivatise

Ac6uisition
investigations proceedings *ompensation

Dvaluation

5ender

A"ard

(nvitation 5o Aid

9evelopment proposal Cinancial proposal

DEVELOPER

*ompany profile

Dngage *onsultant

Fa#t Tra$%& A"ard to handp!$%ed developer Lon' Tra$%& Normal pro$ed(re

F!'(re )*+& The land development pro$e## (nder pr!vat!,at!on

ntrod($t!on #.% ' 5he development strategies for the next .3 years are focused on the vision for Kuala Lumpur to become a Eorld *lass *ity' 5he strategies are also firmly grounded on the direction and accomplishments of the KLS2 #$?/ that set the framework for the structure and present growth patterns of Kuala Lumpur' 5he physical shape of Kuala Lumpur, the distribution of land uses, the new growth areas, infrastructure development especially roads and rail systems are all directly attributable to the policies and strategies set out in the KLS2 #$?/' 5he population base of Kuala Lumpur is set to increase from #'/ million to .'. million over the next .3 years' Eithin the context of a city that is already well developed new strategies that optimi7e limited land resources need to be devised' 5his 2lan is part of the ongoing evolution of the *ity and the development strategies set out here form the basis for the planned spatial development of Kuala Lumpur as well as guiding the formation of sectoral policies up to the year .3.3' 5he strategies are all encompassing and cover every aspect of the *ity fabric from spatial and infrastructural development to urban design and the less tangible 6ualities of the *ity experience that shape and mould people<s perception of the *ity and their place within it' E.!#t!n' #!t(at!on and !##(e Land (#e +/01 - )222

#.4 '

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-*) -*)* + #.? '

5able 4'# indicates the existing land uses by sector while 5able 4'., 5able 4'0 and 5able 4'/ indicate the changes in land use between #$?/ and .333' 5he land use specialisation index in these tables indicates the relative importance of a particular land use in relation to the *ity as a whole for each of the planning units designated in the KLS2 #$?/ (refer Cigure 4'#&'

Ta3le -*+& Land +se by *ategory, .333 a4 !* #.$ ' Re#!dent!al E.!#t!n' #!t(at!on Besidential land use increased from 0,?.. hectares to %,/$3 hectares between #$?/ and .333 and is the largest land use component in the *ity' 5he ma"ority of increases in residential land use have been in the growth areas of Eangsa Ma"u and Aandar 5un Ba7ak, whereas Aukit Falil has yet to establish its residential base' Ma"or established residential land use areas are in 9amansara, Aukit (ndah, Setapak and Sentul' !owever, residential land use in the *ity *entre has declined significantly between #$?/ and .333 and now accounts only for .4'/ percent of the total residential land use in #$?/' I##(e G 9ecline in residential land use in the *ity *entre@ and G Slow growth of residential land use in Aukit Falil'

#03 '

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F!'(re -*+& Land use, .333

Ta3le -*)& Land +se *hange in Besidential, *ommercial and (ndustrial, #$?/ .333

Ta3le -*5& Land +se *hange in (nstitutional, =pen Space Becreational and Sports Cacilities and *ommunity Cacilities, #$?/ .333

Ta3le -*1& Land +se *hange in +ndeveloped Land, S6uatters, (nfrastructure and +tilities, #$?/ .333 34 !* Commer$!al E.!#t!n' #!t(at!on

Photo -*+& '''residential land use in the *ity *entre has declined significantly''' #0# ' *ommercial land use growth has been significant, increasing by ##4'% percent from %3/ hectares to #,3$. hectares between #$?/ and .333' Although there has been some dispersal of commercial land over Kuala Lumpur as a whole, the *ity *entre continues to be by far the most important commercial location in Kuala Lumpur accounting for .%'. percent of the current total commercial land use' 5he growth areas of Eangsa Ma"u and Aandar 5un Ba7ak have had respectable increase in commercial land use which is in accordance with the ob"ectives of the KLS2 #$?/' !owever, 9amansara has had moderate growth in commercial land use and Aukit Falil has only developed marginally' (t is significant that of the four growth areas, only Eangsa Ma"u has a specialisation index in respect of commercial land use greater than #'3' 5here has however, been significant growth in commercial land use outside the designated growth areas, in particular in Sentul, Aukit (ndah, Fin"ang and Seputeh' I##(e G 2reponderance of commercial land use in the *ity *entre@ and G *ommercial growth outside the designated growth areas' $4 !* #00 ' Ind(#tr!al E.!#t!n' #!t(at!on 5he industrial component of land use is relatively minor and has increased from />% hectares in #$?/ to %%0 hectares in .333' Most of the industrial land use is distributed in Fin"ang, Sentul, Aukit (ndah and Maluri, which all grew during the period' (ndustrial land use also grew in the new growth areas of Eangsa Ma"u and Aandar 5un Ba7ak and there has been a significant increase in Aukit Falil because of the Malaysia 5echnology 2ark'

#0. '

!!*

#0/ ' !!*

Many of the older industrial areas are in a dilapidated state, for example, *han Sow Lin and areas along Falan Klang Lama' I##(e G 9ilapidated industrial areas'

d4 !* #0% '

In#t!t(t!onal E.!#t!n' #!t(at!on (nstitutional land use which includes government land and military reserve land has decreased by #.'% percent from #,?%. hectares in #$?/ to #,4.# hectares in .333 and currently accounts for 4'> percent of the total land use' Most of this land is located in Sungai Aesi Military *amp, Aatu *antonment, Sungai Aesi Boyal Malaysian Air Corce Aase, Ministry of 9efence *omplex (M()9DC& of Falan 2adang 5embak and the federal government complexes at Falan 9uta and Mahameru !ighway' I##(e G Cuture use of buildings and lands formerly occupied by federal government offices'

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e4 !* #04 '

Open #pa$e6 re$reat!onal and #port# 7a$!l!t!e# E.!#t!n' #!t(at!on =pen space, recreational and sports facilities land use includes city park, district park, neighbourhood park, local park, local play area, sports complex, golf course, polo field and as well as forest reserves' 5otal open space, recreational and sport facilities land use has increased significantly by #4$'4 percent from %?4 hectares in #$?/ to #,%?3 hectares in .333, although there has been a steady decline in public open space in the *ity *entre largely because of conversion to other uses' Ma"or open spaces in the *ity *entre comprise the public open spaces of 5aman 5asik 2erdana, Aukit )anas and the Kuala Lumpur *ity *entre 2ark (KL**& totalling 03# hectares' 2enchala contains the largest amount of open space, recreational and sport facilities totalling /?4 hectares comprising mainly the Aukit Kiara Aotanical Harden, Aukit Kiara D6uestrian 2ark, Kiara Eest -alley 2ark,

#0> '

Kuala Lumpur Holf and *ountry *lub (KLH**& and Malaysia *ivil Service Holf *lub' 5he development of the )ational Sports *omplex, (nternational 2ark, Aotanical 2ark and Aer"aya Holf *ourse at Aukit Falil, together with the district park of 5aman 5asik 2ermaisuri at Aandar 5un Ba7ak have contributed to the significant increase in open space in these growth areas' #0? '