Plot Ratio In Malaysia: What Is It, What Are The Benefits, & How Can It Be Determined?

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Introduction to Plot Ratios

Purchasing a property can be exciting and rewarding. However, there are certain things to consider. It is necessary to go into the specifics of the features of the property itself. This includes the plot ratio of the property which is used to calculate the gross floor area in which a developer can build on a particular plot of land, thereby determining the density of a project.

So, What is a Plot Ratio and How is it Calculated?

It is also known as Floor Area Ratio (FAR) and is the ratio of the plot of land to the amount of floor area. It does not take into account how high the building is. Hence, the less land used, the higher the building can be. As the ratio goes higher, the more properties can be built on that plot of land. 

The plot ratio is calculated by dividing the total gross floor area with the size of the area on which the property has been built. Let’s take a simple example: If the plot ratio is 1:10, then a 1,000 square feet plot may be developed into 10,000 square feet of floor space. Plot ratios started being used in a revision to the 1916 Zoning Resolution in New York City and its aim was initially to stop buildings from preventing light and air from reaching the roads below. 

Why are Plot Ratios Important?

Plot ratios take into account the whole floor area and do not include stairs, parking garages or basements. Every city has its own capacity and going beyond this capacity may take a toll on the city itself. 

It has been suggested that reducing the plot ratios of property developments can be one policy to prevent the spread of COVID-19 and other viruses. This can reduce the congestion and crowding in residential areas where the risk or getting the illness can be curbed. Furthermore, people can go for walks in larger open spaces comfortably. 

Based on population, growth patterns and construction in a city, the Plot ratio may vary. Ultimately, the government will impose regulations to set the Plot ratio. The Plot ratio, in a large part, has an effect on the development of a country and differs in terms of industrial, commercial, residential and agricultural spaces. 

So what does plot ratios have to do with residents, particularly? Well, undeniably this calculation is crucial in determining your quality of life. If there are more units sharing the same land, there are more residents sharing the same area. So some pertinent questions would be: How crowded are public facilities such as the swimming pool or gym? Are lift facilities enough during peak times? Is there enough privacy and sufficient car parks?

Plot Ratios and Plot Ratio Caps

So, the limit of plot ratios may differ according to the city in consideration. Kuala Lumpur is of particular importance when we talk about new developments and plot ratios. The Kuala Lumpur City Plan (KLCP) 2020 limits the plot ratio cap to 1:10. The aim of this Plan is to control developments in the city’s crowded property market. 

This means that in Kuala Lumpur, developers will be limited on the gross floor space for any development.  In turn, the property market may be affected. After all, making profit is the end goal for all parties in the industry.

The KLCP 2020 was drawn out in line with Kuala Lumpur’s vision of being a “World-Class City” where it emphasises the promotion of “the concept of growth with distribution, physical and social sustainability, economic justification… efficient government, provisions of public amenities and good quality of life in the pursuit of a knowledgeable society.” The Plan is meant to guide property designers and developers with regards to its vision for the city of Kuala Lumpur.  

Moreover, the focus of this new plan will include the planning and development of the city, issues relating to plot ratio and to resolve congestion in the city and to improve the roads. With this plan comes “legislated development control” where unnecessary development can be prevented.

How to Determine Plot Ratio

The plot ratio in Malaysia is set by local councils. It is important to know the plot ratio of an area to determine whether the infrastructure and population correspond with each other. Land owners can apply to increase their plot ratios and these may be approved by the council if they are able to provide certain facilities such as escalators or walkways for pedestrians. 

Factors involved in setting plot ratio

• Land use

This is significant as, inadvertently, land for commercial uses may have higher plot ratio than land for industrial purposes.

• Topography

Here, the structure of the land comes into play where land near hill slopes and other dangerous zones may have a lower plot ratio.

• Location of Land

The location of the piece of land is also important in the determining of the plot ratio. Land in a busy business area may have a higher plot ratio than land in the suburbs. 

Going Green

As industries and individuals become more aware of saving the environment and “going green”, certain aspects of owning or developing a property take on a greater significance. For instance, let us look at the concept of the Green Plot Ratio (GPR). This is in reference to the calculation of plants in a particular development. This concept has become widely adopted as designers have begun to include more “green” areas within buildings.

The Green Plot Ratio is calculated using the Leaf Area Index (LAI) instead of floor area. Thus, the more leaves the plants have, the higher the LAI.

In discussing the GPR, it is important to note that plants not only contribute to the preservation of the environment but also benefit in a recreational, emotional and aesthetic sense. This is the effect of embracing sustainable development and is of relevance to today’s population in living a more sustainable and responsible lifestyle. 

GPR was developed by Singaporean landscape architect, Dr On Boon, with the aim of making optimum use of greenery in an urban environment. The concept is in contrast to pollution, overcrowding and over-consumption of energy and resources and as a response to the global climate crisis. 

Controlling Development Intensity

Now that we have established the meaning of plot ratio, plot ratio caps, Plot ratio and GFA, we can look at the substantial effects these determinations have on the population and environment as a whole. Also, of particular relevance here is density control. In the Town and Country Planning Act 1976, “density” is defined as the land use with reference to the number of people, units or habitable rooms or a combination of these per unit area of land. 

Density control aims to prevent urban sprawling and to have more development in areas with public transportation and other facilities. According to the definition in Britannica, urban sprawling is “the rapid expansion of the geographic extent of cities and towns often characterised by low density residential housing, single use zoning and increased reliance on the private automobile for transportation.”

Before construction on a piece of land can begin, one needs to have the density calculation. If density is more than what has been approved by the relevant bodies, then charges will be incurred. 

There are three different ways to calculate this population density which are:

• Gross Density Calculation
• Net Density Calculation
• Density Without Low-Cost Unit

Essentially, one of the main purposes of calculating plot ratios and density is to maintain sustainability and to prevent development overload and excessive population density in certain areas. Sustainable development in this respect can be viewed in terms of social and economic development.  

Implications of the Plot Ratio Cap

As mentioned before, the KLCP 2020 has set the plot ratio cap for development at 1:10 including for commercial and residential purposes. This may mean that developers may not be able to build more units on a particular plot of land, thus decreasing profits. The plot ratio cap was put in place to regulate the number of high rise projects. Also, with the KLCP 2020 in place it is hoped that the property market will be more systematic and regulated to prevent the risk of unsold properties.

Those projects that have already been granted approval with a plot ratio higher than what is permitted in the KLCP 2020, need to get new approvals on their proposals. It is anticipated that with a more regulated process for plot ratios, property developers may exercise more caution and discretion in selecting their sites. Nevertheless, it is noted that government entities such as SOCSO and EPF may be exempted from these regulations and may get higher plot ratios. 

Some other implications of a high plot ratio are that it means high density – more units will be built in an area leading to increase in number of unit per acre; higher ratios in lift sharing; a crowd at public areas such as facilities meaning higher maintenance costs; decrease in tenant quality and developers need to give more car park space for residents especially in condos or apartments. 

The Final Word on Plot Ratio of Property in Malaysia

After reading all the information above, one can get a better understanding of property development in Malaysia, the rules and regulations underlying it, and various determinations such as plot ratio and density as well as its correlation with each other. As the focus here is on plot ratio, the various aspects of this and why it is important to owners, developers and designers on the whole are highlighted.

Also, mentioned here are the legislations that are pertinent to note such as the KLCP 2020 Plan and the Town and Country Planning Act 1976. These are relevant to the topic of plot ratio of properties and give a sense of direction in which this topic may be understood better.

It can be inferred that the vision of making Kuala Lumpur, in particular, a world class city can be realised through the creation of sustainable solutions balanced with economic and social prosperity. This is evident through the control and regulation of property development where the KLCP 2020 Plan is a guide to the use of land, the intensity of its use and other infrastructure. 

Essentially it all comes to striking a balance between what is sustainable and what is beneficial and useful to the public. While we work towards a “greener” and responsible lifestyle, we should also not forget to do what is in our best interest economically. With these two factors in place, we can then live a comfortable and fulfilling life.

All in all, hope you now have a better understanding of the value of plot ratio. It is not just for property developers to know this, but also for the general public, as we plan, design and shape our properties with the foreseeable future in mind.