Bursa Malaysia has queried, among other things, the basis and justification for Berjaya Land Bhd’s purchase price of RM8.01 million per acre or RM184 per square foot for 57 acres of Penang Turf Club land.

In its response, Berjaya Land pointed to the location of the land, the surrounding low-density “upmarket” area and the scarcity of residential land on the island.

It also compared the RM184psf price to a few recently reported real estate transactions in Penang:

  • CP Land Sdn Bhd disposed a parcel of land in the Queensbay area at Bayan Lepas for RM160 million or RM420psf. (Source: New Straits Times, 27 July 2011 edition)
  • Ivory Property Group Bhd announced that it had won the rights to buy 41.50 hectares of land at Bayan Mutiara, where the reserve price is said to be RM200 per square foot and its winning bid was RM240psf. (Source: New Straits Times, 27 July 2011 edition)
  • Ivory entered into a conditional agreement last year to buy 0.49 hectares freehold land in Batu Ferringhi for RM25 million or about RM474psf. (Source: New Straits Times, 16 June 2011 edition)
  • Mah Sing Group Bhd acquired a 3.38-acre freehold plot of land in Georgetown for RM38.6 million or about RM262.19psf. (Source: The Edge Financial Daily, 19 October 2010 edition).

The RM184psf is lower than all these deals.

Anyway, the conditional S&P agreement for the 57 acres is subject to approvals being obtained from MPPP, PBA, JKR, JPS, DoE, IWK and TNB.

Let’s see how these authorities handle this deal, especially in view of the congestion already apparent on Scotland Road.