Economy

Government Considering a Buyout of Kampung Baru

Kampung baru

It appears the Malaysian government is once again keen to initiate a buyout of Kampung Baru, the historic Malay enclave in the shadow of KLCC.

Federal Territories Minister Khalid Abdul Samad confirmed the reports at a recent press conference held in Putrajaya, noting that if the affected landowners agreed to the buyout, it could cost the government as much as RM10 billion. Kampung Baru sits on a large tract of super-prime real estate that lies just 500m from the Petronas Twin Towers.

kampung baru
Image credit: Nur Ismail

Khalid explained that a buyout would help facilitate a more organised redevelopment of the area, which currently comprises a number of older brick and wooden homes, dilapidated flats, and low-rise shophouses.

It’s not the first time the Malaysian government has tried to take over the 121-hectare plot of land. And, unsurprisingly, a couple of developers have made overtures, too. However, these plans ultimately went nowhere because the landowners, most of whom own small parcels of land on which their homes sit, refused to sell.

kampung baru
Image credit: Star Property

Kampung Baru is gazetted as Malay Reserve Land, which may be a curious concept to foreigners, as it means that only a specific race – Malays – can buy land or houses there. Currently, it is believed there about 5,300 landowners in Kampung Baru who collectively own 1,355 plots of land. This indicates that some lots have multiple owners, oftentimes arising as land is passed down in a family. The area is also well-known as the heart of Malay political activism in KL, with many a Malay leader over the years using the area as a centre for gathering or rallying community support.

kmapung baru
Image credit: Star2

Khalid explained that the buyout offer could comprise cash, an in-kind exchange (e.g., a new apartment or home elsewhere in exchange for their land), or a combination of both. He noted, however, “If everyone wants cash, and no one wants apartments, which is the worst case scenario, then it may [cost the government] between RM6 billion and RM10 billion.”

He went on to say that some 80 percent of landowners were now in agreement with the idea of a government buyout and redevelopment of the area. Somewhat ineloquently explaining the rationale behind the approach, Khalid said, “It is quite embarrassing to show foreign guests [and tell them] ‘this is a Malay area’ in the heart of the city, that is like a squatter village, even though the land is very valuable and the owners should be considered millionaires.”

Time will tell if this latest effort to shift out the landowners and redevelop the historic Kampung Baru area will succeed or will end up like the many attempts before it, going nowhere.

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