PETALING JAYA – Property consultants are puzzled over how one of the most prime pieces of land in Malaysia bought 10 years ago was sold at a loss.

Axis REIT Managers Bhd head of investments and Malaysian Institute of Estate Agents immediate past-president Siva Shanker said it was “beyond comprehension” that land purchased by property developer Thriven Global Bhd in Bukit Tunku a decade ago was recently transacted at a loss of RM11mil.

“It’s one of the most sought-after residential addresses and there is no indication that prices of properties there are coming down,” he said when contacted by StarBiz yesterday.

Bukit Tunku, formerly known as Bukit Kenny or Kenny Hills, is a top-class residential area. Siva said the location attracted mainly owner-occupiers or very long-term investors.

“There is no speculation there. Land there should be able to fetch top dollar, especially from the super rich.”

Similarly, property consultancy PPC International Sdn Bhd managing director Datuk Siders Sittampalam also said it was puzzling for property within Bukit Tunku to be sold at a loss.

“Unless there are restrictions that we do not know about, the land should be sold at a premium.”

CBRE|WTW managing director Foo Gee Jen said planning requirements for Bukit Tunku were very rigid.

“If one were to buy to speculate for high-density development, he may face difficulties. So, in this situation, he may resell at a loss.”

On Tuesday, Thriven announced that its 51%-owned unit Mulpha Argyle Property Sdn Bhd was selling 2.5 acres to real estate firm Mount Well Sdn Bhd for RM27.5mil (RM249.84 per sq ft), which would result in a loss of some RM11.4mil for the company.

The property developer said its cost of investment in the land was RM30.75mil (RM279.32 per sq ft) in 2007. As at Dec 31, 2016, the land had a net book value of RM38.38mil (RM348.69 per sq ft).



Thriven group managing director Ghazie Yeoh Abdullah said the disposal would help the company recoup cashflow and channel its resources toward profitable projects.

He said the land, which had been earmarked for the development of bungalow units, did not generate the type of returns intended by the company.

“At over two acres, we could only build six bungalows for around RM19mil each. The focus of the company right now is to develop affordable projects and developments worth over RM100mil.

“So that (Bukit Tunku) land did not fit into our present strategy,” he said when contacted by StarBiz yesterday.

Ghazie said despite being an impairment loss, the transaction would still be positive from a cashflow standpoint.

“We sold at a loss because we have decided to recoup the cashflow of RM20mil, which we will redeploy into our projects, providing us with better returns.

“Also, our book value was high because the borrowings that the past management had to buy the land was very high, at 8% per annum.”

Ghazie also pointed out that the impairment was only 51%, given its stake in its subsidiary.

“After this transaction, we will take over the company and use its tax loss as an asset.

“With the projects we have and the potential ones, there is no harm in having a tax-loss company to offset the profitability of the future projects,” he said.

In its announcement on Tuesday, it said no valuation was carried out in relation to the proposed sale, although the company explained that the price was arrived at after taking into consideration the market value of the land, given the prevailing property market condition.

Thriven said the sale would raise net cash proceeds of RM19.85mil, after repaying some RM7.12mil to lenders to redeem and discharge the land, which will be used to finance the company’s capital expenditure and working capital.