THE Penang Turf Club (PTC) is proposing to sell 21.7ha or about a fifth of its site to Berjaya Land for RM459 million (S$185 million) in cash.
Both parties have entered into a conditional sale-and-purchase agreement. The purchase price values the prime freehold land at about RM8 million per acre or RM184 per square foot, Berjaya Land said in a filing to the stock exchange yesterday.
The property developer, which is part of tycoon Vincent Tan's stable of companies, intends to build a gated and guarded community comprising bungalows, semi-detached houses, condominiums and apartments on the land over a five-year period.
It estimated the gross development value at RM1.52 billion.
Located within the PTC about 3.2km from Georgetown, the land is close by neighbouring developments such as the upmarket low-density residential area of Jesselton Height.
Significantly, it is also part of the land on which the previously mooted Penang Global City Centre (PGCC) was to be built.
A mega development said to be worth RM25 billion on 104ha of PTC land, the PGCC was launched in 2007 by public-listed Equine Capital during the administration of former prime minister Abdullah Ahmad Badawi, but never took off and was shelved after a new state government came into power in 2008.
Whether the current Pakatan Rakyat-led administration will approve Berjaya Land's plans remains to be seen given its previous opposition to the PGCC. The controversial project had been criticised by Penang residents as far too dense, with many stating they would rather maintain the open space, notwithstanding the economic benefits of the 'iconic' development.
Indeed, Berjaya Land's proposed acquisition is conditional upon planning permission approval for the development from the relevant authorities as well as PTC members agreeing to the disposal.
Berjaya Land, which beat rival developers said to include IJM, SP Setia and IGB in the PTC tender, said the property is generally an undulating site with the majority of its terrain in Class 1 slope classification, that is less than 15 degrees gradient. Its present usage includes horse stables, equestrian activities and part of an 18-hole golf course.
Jerry Chan Fook Sing, chairman of the Penang branch of Real Estate And Housing Developers' Association Malaysia, views the price as favourable for Berjaya Land provided the relevant approvals can be secured. 'It's good because land in the Jesselton area is going for upwards of RM400 psf although that is on a nett basis.'
Noting the height controls in the Jesselton area of six units per acre and two-storey restrictions, he observed residents in the vicinity would likely not oppose bungalows and semi-detached houses but would be more wary of proposed high-rise buildings.
Even so, the state government's response will be of immediate interest. Many Penangnites are still sore the land had been re-zoned from open space to mixed development under the previous Barisan Nasional state government - a conversion they believe was to facilitate the PGCC.
Berjaya Land said the proposed acquisition would increase its land bank for future development in Penang given the strong demand for high-end landed properties in the state, and that it expects to complete the purchase within four years of the agreement.