MAHB’s unit given developmental rights to develop KLIA Aeropolis land
21 Nov 2022
Malaysia Airports Holdings Bhd (MAHB) has sought the Malaysian government to “structure better terms” to increase domestic and foreign direct investments which pertain to the remaining short tenure of the land lease.
The airport operator, in a filing with Bursa Malaysia, said its engagement with the government last year has resulted in some changes in some earlier agreements.
The engagement has resulted in a 99-year development agreement between KLIA Aeropolis Sdn Bhd (KASB) and the Malaysian government commencing Nov 17 2022 which gives KASB, MAHB’s wholly-owned subsidiary, to plan, design, develop and construct the KLIA Aeropolis land measuring 3,454.92 hectares.
There is also a land lease agreement between KASB and the Federal Lands Commissioner for a 99-year lease commencing Nov 17 2022 which gives the rights to KASB to occupy, use, control, manage and sublease the land.
The filing also said there were supplemental agreements between Malaysia Airports (Sepang) Sdn Bhd and the Malaysian government “to vary” the terms and conditions of an earlier operating agreement to carve out land for the development of KLIA Aeropolis.
“Consequent to the above, Malaysia Airports Sepang will retain the remaining 47 lots of land of about 9352.71 hectares for the continued purposes of KLIA airport operations, to be held under the operating agreement and the lease agreement,” the filing said.
For background, MAHB, the government and Malaysia Airports (Sepang) signed an operating agreement, dated Feb 12, 2009, effective for a period of 25 years until Feb 11, 2034, for the development and operations of Kuala Lumpur International Airport.
There was also a lease agreement between the Federal Lands Commissioner and Malaysia Airports (Sepang) dated Feb 12, 2009, also effective for 25 years until Feb 11, 2034.
The filing said that based on engagements with various potential investors and businesses, there were “challenges faced” by them to get a palatable return on investment due to the short remaining tenure of the land lease.