Sunrise Bhd’s acquisition of the 24-storey Wisma Angkasa Raya near the Petronas Twin Towers in the Kuala Lumpur City Centre (KLCC) vicinity is expected to generate an exceptional return on its investment.

Under a deal with Reliance Pillar Sdn Bhd and Lembaran Segimaju Sdn Bhd, Sunrise will pay RM179 million for the 69,171sq ft land on which the building is situated, or an equivalent of RM2,588psf.

By rule-of-thumb, a market observer said a building with a plot ratio of 10 could be redeveloped on the site, which would provide some 690,000sq ft of nett saleable space.

Based on a selling price of RM1,200psf, Sunrise could realise a gross development value of RM830 million.

“If you factor in construction cost of RM350psf for the saleable space, which works out to RM240 million, and add on the construction cost for car-parks and other ancillary expenditure, Sunrise could be looking at a handsome gross profit margin of 40 per cent,” said the observer.

Another factor in Sunrise’s favour is that it will now join the league of a select group of developers with projects in the prestigious KLCC address, said TA Securities Sdn Bhd analyst Kamarulzaman Hassan, “especially with the available land in the area becoming scarce”.

Despite emerging concerns about the property sector in light of the anticipated slowdown in the economy, developments in the KLCC area are not likely to be affected thanks to the robust demand from foreign investors, he added.