KUALA LUMPUR, May 12 — The Retirement Fund Inc (KWAP) said today that it has not committed to investing in land at the Tun Razak Exchange (TRX), putting to rest rumours that it has struck a deal for the purchase with 1Malaysia Development Berhad (1MDB).

In a brief statement via email, the civil service pension fund said any land investment it undertakes must generate sustainable returns and meet all risk parameters set by its board.

“KWAP reviews the investment opportunity in TRX as it would with any other property investments and the decision to review the project was commercially driven based on its prime strategic location as the next Kuala Lumpur financial district.

“At this point, no final investment decision has been made on the project,” the statement said.

In a report yesterday, The Star Online quoted sources as claiming that KWAP has agreed to buy a parcel of land and building for its new headquarters in the TRX at a rate 15 per cent cheaper than Lembaga Tabung Haji’s (LTH) recent purchase.

The report said the heads of agreement, which have purportedly been agreed upon, will see KWAP pay between RM1 billion and RM1.2 billion for a 40-storey building and land at the TRX in Kuala Lumpur.

It added that KWAP will be purchasing the land at about RM2,300 per sq ft.

In comparison, LTH had reportedly paid RM188.5 million at RM2,773 psf for its part of the TRX land, which is 43 times what 1MDB paid four years ago when it purchased the same plot for just RM4.5 million at a rate of RM64 psf.

“The heads of agreement is a prelude to the sales and purchase (S&P) agreement. The terms of agreement is also tight where KWAP will only pay 10 per cent first and the rest upon completion of the building,” The Star Online quoted a source as saying.

Last week, reports of LTH’s controversial land investment hit media headlines after it was revealed that it had bought land about a month back from 1MDB, which is currently saddled with a RM42 billion debt.

A blog called “The Benchmark” first raised speculation on the purchase when it published purported documents of the controversial transaction that critics now claim could be a bailout for 1MDB.

The expose sparked outrage among lawmakers from both sides of the political divide, including even Umno leaders like Tan Sri Muhyiddin Yassin, Datuk Seri Hishammuddin Hussein and Khairy Jamaluddin, and fuelled concerns raised previously over 1MDB’s dealings.

On Saturday, LTH chairman Datuk Seri Abdul Azeez Abdul Rahim announced that following advice from Prime Minister Datuk Seri Najib Razak, the fund will be selling its TRX plot within a week.

He also claimed that the fund already has three potential buyers for the plot and that the sale will net LTH at least RM5 million in profit.