KUALA LUMPUR (Jan 4): At RM7.41 billion, 1Malaysia Development Bhd's (1MDB) planned sale of a 60% stake in Bandar Malaysia Sdn Bhd is among Malaysia's largest property deals in terms of value.

The Edge Malaysia business and investment weekly (Edge Weekly) reports in its latest Jan 4 to 10 issue that the transaction translated into RM12.35 billion or about RM583.37 psf for the 194ha (486 acre) Bandar Malaysia land at Sungai Besi here.

Malaysian government-owned 1MDB said it signed the share sale and purchase agreement with consortium IWH-CREC Sdn Bhd, which would jointly undertake the Bandar Malaysia mixed development.

According to 1MDB, the consortium is a 60:40 joint venture between Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corp (M) Sdn Bhd. 1MDB said the consortium valued the Bandar Malaysia land at RM12.35 billion, hence, the RM7.41 billion for the 60% stake.

The Edge reports that the Bandar Malaysia transaction, which came under 1MDB's rationalisation plan, would further help the company cut its debt.

It adds that 1MDB's debt was estimated at RM48.36 billion. It was reported that 1MDB had monetised about RM19.94 billion worth of assets under its rationalisation plan.

"To date, 1MDB’s rationalisation plan will help cover most of its debt, assuming the bulk of the proceeds from the disposal is channelled into debt-settlement.

"The asset sales so far have managed to pare down 1MDB’s debts substantially. If the strategic fund was not debt-laden, it would have been a cash-rich entity by now," The Edge said.

For a better understanding on 1MDB and the Malaysian real estate market, read the latest issue of The Edge Malaysia weekly,  Jan 4-10, or tap here to subscribe for your personal copy.

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