Berjaya Land returns to Penang

GEORGE TOWN: After staying away from the Penang property scene for more than 20 years, Berjaya Land Bhd (BLand) is returning in a big way. And it is picking up arguably the most controversial piece of real estate on the island to mark its return — a part of the Penang Turf Club (PNTC).

Opposition to an earlier planned redevelopment at PNTC was said to be one of the causes of the downfall of the previous state government.

The PNTC on Tuesday, Aug 16 sold a 57.3-acre (23.2ha) site on its grounds for RM459 million to BLand, which works out to RM184 per sq ft. BLand is said to have made the highest bid for the land parcel, which also saw other developers making equally competitive bids.

Berjaya group chairman Tan Sri Vincent Tan said at the signing of the sale and purchase agreement between BLand unit Berjaya Land Development Sdn Bhd and the PNTC that BLand proposed to develop a low-density exclusive guarded and gated housing development comprising bungalows, semi-detached homes, two blocks of 10-storey condominiums and low-cost housing units. The project will have a gross development value of RM1.52 billion.

Tan is excited about his return to the Penang property scene after more than two decades.

"We were active in the property development scene in Penang during the time of the late Tun Lim Chong Eu. After his tenure, we were put off by the state leadership and I decided not to invest in Penang ever again.

"However, now, we have decided to come back here again. If there are any other opportunities, if the price is right and the location is right, we will invest in other projects here. We have every good reason to do so now," he said.

Tan said he was impressed with the level of cleanliness in Penang and that the state has done very well economically over the past few years, having attained the highest level in terms of investments in the country last year with RM12.2 billion.

He added that with Penang being an attractive location for the Malaysia My Second Home (MM2H) programme and the strong demand for high-end landed properties in the state, the exclusive residences planned by BLand will further boost the value of the refined suburban housing in the area.

The PNTC borders Jesselton Heights, one of the most exclusive residential areas on Penang island.

The 57.3-acre site sold to BLand forms less than a quarter of the entire 259-acre turf club. The RM459 million paid by BLand is close to the RM488 million that the entire turf club was earlier proposed to be sold for, to privately-held Abad Naluri Sdn Bhd.

At that time, Abad Naluri was 25%-owned by Equine Capital Bhd, a Kuala Lumpur-based developer then helmed by well-connected businessman Patrick Lim.

Abad Naluri had signed an agreement with the PNTC in 2004 and paid an advance of RM10 million to acquire the entire 259 acres. In return, the company was supposed to build an equestrian and race course on a 300-acre site in Batu Kawan, on mainland Penang, for RM375 million, and hand it over to the PNTC by 2007. The balance of RM113 million was to be paid in cash to the club.

The turf club's 259-acre parcel had included about 60 acres of hill land that cannot be developed. The Abad Naluri deal valued the entire land at about RM43 psf. Based on the net developable land of about 175 acres, however, it worked out to around RM64 psf — a third of what BLand paid.

In 2004, Abad Naluri then planned a controversial RM25 billion development called Penang Global City Centre (PGCC) on the site. The high-density development was vehemently opposed by Penangites. It eventually died a natural death after the 2008 general election which saw the fall of the Gerakan-led Barisan Nasional state government.

Abad Naluri was given an extension of two years by the PNTC to complete the equestrian and race course in Batu Kawan after the initial deadline was not met.

The plans had been previously submitted to the Gerakan-led state government for the PGCC. However, the developer had failed to meet conditions set by the local authorities and was asked to resubmit its plan which it failed to do before the 2008 general election.

As there were no plans resubmitted to the local council under the new state government, the PGCC project failed to take off and Abad Naluri could not embark on the facilities in Batu Kawan.

Under the Penang Island Municipal Council's (MPPP) guidelines for the area, the proposed density, without taking into account hill land, is six units per acre with a height control of two stories. PGCC's earlier proposal was 36 units per acre inclusive of hill land and 54 units per acre excluding hill land.

Under the guidelines, the area nearest to Jesselton Heights must only have low-density development and only bungalows must be built. Abad Naluri had reportedly proposed to build almost 7,000 luxury units in 38 towers, including two iconic towers.

It was also reported that Abad Naluri had failed to include the affordable housing policy in the original development plan, and had only proposed to improve the six existing blocks of flats in Rifle Range and build 1,334 low-medium cost units to fulfil its obligations on MPPP-owned land in Rifle Range.

As the deal with Abad Naluri could not be fulfilled, PNTC called for new open tenders, paving the way for BLand's entry.

Berjaya's Tan expressed confidence that there would be no controversies arising from the proposed development.

Unlike the PGCC project which had featured two iconic towers each standing 200m high, Tan said this project has no commercial components and only consists of residential units.

"There is no controversy surrounding this project as we are not building high-rise towers and this project is strictly residential.

"We planned this project in accordance to the guidelines given by the authorities and I am confident that this property project will be developed," Tan said, adding that plans have yet to be submitted to the relevant authorities.

Meanwhile, PNTC operations advisor Robin Rizal P H Tan said there are no plans to relocate the turf club whose operations would not be affected by the project.

However, the proposed sale will affect the club's existing golf course. Nine of the 18 holes are part of the sale but the balance nine holes will still be maintained by the club.