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Thursday, August 18, 2011

Pact gives new lease of life to Penang Turf Club land

When a media advisory arrived that Berjaya Land Bhd (BLand) was inking a deal with the Penang Turf Club (PNTC) in George Town this week, most reporters were spooked and wondered if the "ghost" of the Penang Global Centre (PGCC) was back to haunt them.

The PGCC was a proposed project to be located at the PTC grounds, carrying a gross development value of RM25 billion and to be built over a span of 15 years by its developer Abad Naluri Sdn Bhd, an associate company of Equine Capital Bhd.

Abad Naluri bought the land for RM488 million from the club in 2002 and had, among others, planned to include two five-star hotels, a performing arts centre, retail complex, monorail transportation and a world-class convention centre.

Following public opposition to the development, which was considered misleading and lacking in transparency with issues such as land rezoning and traffic congestion, along with a host of other concerns, the proposed project was officially declared "dead" after the Penang Island Municipal Council in 2008 rejected it on the basis of the developer's failure to submit the layout plans on time and comply with the council requirements.

On Tuesday, Berjaya Corp Bhd founder and chairman Tan Sri Vincent Tan was in Penang to ink a sale-and-purchase agreement between Berjaya Land Development Sdn Bhd (BLand) and Penang Turf Club (PNTC).

BLand is buying 22.8ha of freehold prime land within PNTC for RM459 million cash, and is proposing to develop a low-density, exclusive, guarded and gated housing development comprising bungalows, semi-detached homes and low-rise condominiums with an abundance of landscape and garden areas to complement the serenity and exclusivity of the surrounding areas.

The company, unlike other property developers which have entered Penang in recent times, is set to meet the requirement of building affordable housing units within the same site, although these homes will be located away from the high-end residential units.

Tan made it clear to reporters when he was asked if there would be any controversy on the project, that he was not expecting any from those living in the neighbourhood of the PNTC.

This he said is because there is no retail component to the proposed development, and the condominium would only include two low-rise blocks.

As concerns about traffic congestion owing to an incremental impact of new residents to the area are likely to surface in due time, it would be prudent for BLand to take proactive measures and devise a traffic dispersal system.

On its part, the PNTC has to contend with decreasing horse-racing revenues, while doling out large sums in quit rent and assessment in recent times.

This is because the present site of the PNTC was originally given by the government for a nominal sum and zoned as an "Open Space". However, this was changed in 2007 to a "Mixed Development" zone, to facilitate the PGCC project.

The club is now saddled with paying revised rates and has been making efforts to increase its revenue base.

In 2009, PNTC said it was planning to embark on a RM30 million development project to build 25 bungalow units on the fringes of the club, which can be rented out to generate income.

Plans for this development is still on the cards, the club's officials said, and it is currently awaiting the necessary approvals to proceed with the project.

While BLand has made it clear that Penang has become much more attractive as an investment destination in recent times and the company is on the lookout for other opportunities, there should be no major issues or opposition arising from its planned development on the PNTC grounds.

At the end of the day, it is simply a property transaction between two parties, with hopefully no "ghosts" lurking in the shadows.

By Business Times

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