KUALA LUMPUR – May 27, 2015: Investors will not be perturbed by the negative political perception shrouding 1MDB if their assessment indicates that they could profit from ventures in projects initiated by the government-owned strategic development company.
Binary University professor Zulkifli Senteri is of the opinion that if one is to view it purely from a business perspective, then it was clear that 1MDB’s projects could yield lucrative returns.
“For instance, Tabung Haji (TH) has announced that it has already secured a buyer for part of the Tun Razak Exchange (TRX) land that it had bought from 1MDB.
“Now we have Nexgram Land contemplating to invest in TRX,” he said, adding that investors should not be making decision while being clouded by political sentiments.
Zulkifli also said that it was a big loss for TH when it caved in to political pressure and had to decide to sell the TRX land.
“In terms of investment, the purchase of the land was a good investment but the transaction was strongly opposed by the public because they were led to believe that the government was using TH depositors’ money to bail out the ‘debt-ridden’ 1MDB,” he explained.
Independent economic analyst Professor Hoo Ke Ping told The MOLE that the interest in buying land at TRX was expected due to the economic situation that has reduced the price of land.
“If you compare with Hong Kong, Singapore, Shanghai and Jakarta, land in Kuala Lumpur is dirt cheap, so whoever buys land now will probably get a huge profit in years to come.
“I think investors should seize this opportunity to buy more land at TRX because 1MDB is currently in distress so an investor may get a good deal,” said Ping.
However, he also warned that it would be stupid for anyone to develop land within the next three to five years due to the current property overgrowth and high vacancy.
“Based on my analysis, Kuala Lumpur’s office space will face a glut soon. As for now, the vacancy rate is already more than 15 per cent in the Golden Triangle.
“Not even 50 per cent of a total 30 blocks of property clusters in the Klang Valley are occupied.
“So buying land is a smart investment but to immediately develop it may not be economically viable,” he said.