A new Business hub in Puncak Alam.......coming soon.

Phase 1: Galaxy Avenue.

This post has been edited by mascot_lim: Feb 16 2025, 10:13 AM

PUNCAK Niaga Holdings Bhd is believed to be undertaking a revaluation exercise on the three pieces of land in Ijok, Selangor, that it is selling to Alpha Galaxy Sdn Bhd and Alpha Galaxy 1 Bhd (together, Alpha Galaxy), which could result in a higher value for the parcels.

If the land’s value rises but the purchase price is not revised accordingly, Puncak Niaga could find itself recording a bigger loss on paper from the disposals to Alpha Galaxy. The value of the land increased between 2020 and 2022.


According to a valuation report on the three parcels sighted by The Edge, the value of Lot 7093 held under land title number PN77570 was RM101 million as at Dec 31, 2021, and later updated to RM103.2 million as at Dec 31, 2022.

The value of Lot 7094 held under land title number PN77571 as at Dec 31, 2021 was RM108.6 million and updated to RM111.07 million as at Dec 31, 2022.

The value of the third parcel, Lot 7095, held under land title number PN77572, was RM108.8 million as at Dec 31, 2021, but revised upwards to RM111.2 million as at Dec 31, 2022.

This means that between 2021 and 2022, the value of the parcels to be sold appreciated by 2.18%, 2.27% and 2.21% respectively. The latest valuation update, done in 2022, was used as the basis for the purchase consideration agreed upon by Puncak Niaga and Alpha Galaxy.

The valuations of the three parcels were done by HASB Consultants (Selangor) Sdn Bhd, a chartered valuation surveyor and property consultants.

On Aug 17, Puncak Niaga and its wholly-owned subsidiary Puncak Niaga Management Services Sdn Bhd (PNMSSB) entered into three conditional sale and purchase agreements (SPAs) with Alpha Galaxy for the disposal of the three pieces of land for a total of RM306.07 million, or RM43 psf.

Lot 7093 spans 213,083 sq m, or 2.29 million sq ft; Lot 7094 measures 229,290 sq m, or 2.47 million sq ft; and Lot 7095 measures 229,717 sq m, or 2.47 million sq ft. All three parcels are for residential development.

The RM306.07 million purchase consideration is at a discount of RM20.7 million, or 7%, to the market value of the land as at Dec 31, 2022, according to Puncak Niaga’s filing with Bursa Malaysia. This translates into a discount of RM2 psf, it adds.

In an Aug 23 reply to Bursa’s queries about the discount, Puncak Niaga said the board of directors considered the current economic outlook for Malaysia, which is not encouraging, and the current property market outlook, which is not promising, as among the reasons for selling the parcels at a lower price than their market value.

“The purchaser will pay for all costs involved in the application to Majlis Perbandaran Kuala Selangor for the conversion of the land from residential to commercial status,” it added.

This means the parcels will be developed into commercial projects by Alpha Galaxy.

In valuing the pieces of land, HASB Consultants listed five land transactions as evidence of their value. Only one transaction involved residential development land — Lot 27507 in Serendah, which is about 40km away via the North-South Expressway.

The consultant also considered the transactions of PT 152254 in Pulau Indah Industrial Park in August 2019 and Lot 169438 in the same area in December 2018 when coming up with the valuation, according to the valuation report.

Pulau Indah Industrial Park is about 50km away from where the parcels to be sold are located. The transactions were also of land located in a developed industrial park that is within a stone’s throw of Westport, Malaysia’s busiest gateway terminal in Port Klang.

The transaction of PT78093 in Bukit Raja Industrial Park in June 2018 was also considered as part of the evidence of value by the consultant. Bukit Raja Industrial Park is a mature industrial park with a developed supply chain ecosystem.

The only transaction in Ijok that was included as evidence of value for the land to be sold was that of PT10557, off Jalan Cakera Purnama 12/29, in August 2018. This was agricultural land but with potential for residential development.

While the three parcels to be sold are listed as residential development land, the purchaser, Alpha Galaxy, is a developer of prime commercial and industrial properties. The group built the 800,000 sq ft National Distribution Warehouse for Panasonic in Bukit Raja Industrial Park.

Alpha Galaxy is also no stranger to the area in which the three parcels are located. In fact, its Galaxy Logistics Hub is located near the parcels, which makes it safe to assume that the group will expand its industrial logistics facilities there.

Therefore, a value comparison with industrial land in Ijok would have been a better fit for the three parcels. In fact, HASB Consultants did mention a transaction of industrial land in Ijok in the valuation report, only to exclude it from the list of evidence of value.

This was a transaction of 16.32 acres of industrial land in Eco Business Park V by Baosteel Can Making (Malaysia) Sdn Bhd in August 2020 for RM53.3 million, or RM75 psf. This was also a piece of land acquired from an industrial park developer and that usually costs more than undeveloped land, which is full of undergrowth and has little to no infrastructure.

It raises the question, however, whether the disposal consideration is fair to Puncak Niaga’s minority shareholders.

https://theedgemalaysia.com/node/682947

This post has been edited by mascot_lim: Feb 16 2025, 10:12 AM

a small timer that mainly build warehouses in their first venture