Tuesday 06 Jun 2023
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This article first appeared in Forum, The Edge Malaysia Weekly on March 6, 2023 - March 12, 2023

Any public furore over the losing of the Seri Selangor Golf Club (KGSS), a 160-acre public golf course, to residential and/or commercial development cannot be a surprise.

To be fair, the redevelopment of golf courses is nothing new. With land prices continuing to escalate, the unlocking of returns on such assets makes commercial sense.

That said, KGSS is a different candidate altogether. It is owned by the Selangor State Development Corporation (PKNS) and managed by SACC Convec Sdn Bhd, one of its 11 subsidiaries.

This prized real estate — an 18-hole, 6,464m par-72 golf course complete with a clubhouse — is located strategically in Kota Damansara, on the outer fringe of bustling Petaling Jaya.

KGSS was launched in 1998 with the objective of making the sport affordable for the public. Over the years, it has also been the favourite haunt of young and budding golfers. Many community events are held at the clubhouse.

For those unfamiliar with Kota Damansara, it used to be pretty much a backwater address; the ugly sister to PJ’s Cinderella. However, land scarcity in PJ is pushing development outwards and Kota Damansara is a clear and ready beneficiary.

This is not a new phenomenon. When Kuala Lumpur’s Taman Tun Dr Ismail (TTDI) was first put on the market decades ago, many shunned it because it was far from the heart of KL. Today, TTDI is one of KL’s most sought-after townships.

Back to Kota Damansara. In recent years, the building momentum has reached a dizzying pace. Commercial and high-rise homes have mushroomed despite the constant complaints of traffic congestion in the area.

Let’s face it — how can a bustling locale be devoid of traffic jams? Call the inconvenience a price of success if you wish. Of course, this does not mean that local authorities — town and traffic planners to be specific — should not be held accountable.

What is unfolding in mature Kota Damansara is that whatever pockets of development tracts that are on the market are being quickly snapped up by developers. This is because the land can be quickly turned around; a strategy that augurs well for any developer’s cash flow.

On the flip side, unlike in a well-planned township piloted by a master developer, sporadic and ad-hoc development activities tend to be disruptive to an area’s liveability and sustainability.

Pocket developments are guided primarily by land use zoning, density requirements and other planning approvals. However, without a holistic master plan, these new additions tend to fail to complement the existing landscape.

Such has been the situation in Kota Damansara. From its early days, it was clear that it was growing with a hodgepodge of developments. Naturally, this comes at the expense of liveability and sustainability, attributes the government is now promoting.

More than a landmark

KGSS is a noble government initiative. However, over time, it has evolved into an invaluable landmark green lung thriving in the fast-expanding concrete jungle coming up around it.

Granted, operating a golf course is not cheap. And the 160-acre tract’s worth has soared, with valuers estimating it at RM300 to RM400 psf. Developers are no fools. With the PJ boundaries bursting, it is not rocket science to understand that this piece of real estate is a rare gem indeed.

Which is why the prospect of owning the land, or even part of it, is getting developers excited. The Edge last week reported that several key developers are eyeing the land, all or in part, and that their proposals are now with PKNS. When contacted by The Edge, the Selangor Menteri Besar’s office confirmed that proposals had been received and discussed, but “no transfer or sale has been done at this point”.

It is learnt that a condition for the sale of the land is that the buyer must relocate or rebuild the clubhouse and parking lot, which together measure 7.1 acres, to another part of the land. Hence, it is no coincidence that on Jan 12, PKNS submitted an application to the Petaling Jaya City Council to develop a two-storey clubhouse complex housing a cafeteria and golf accessory store, among others, on the land.

Meanwhile, residents in nearby Tropicana Indah Resort Homes PJU 3 issued a press release on Feb 23 stating their objections to the building of the new clubhouse just next to the homes in PJU3/11 and PJU3/12.

Besides safety, traffic congestion and other concerns, the residents were also unhappy that the council had sent them a seven-day notice seeking consent for or objections to the project on Jan 25, when most of them had been away for the Chinese New Year holidays.

While there is no doubt that the return on the KGSS asset will be very attractive, as a responsible state government, Selangor must tread carefully before coming to any decision, especially when it is one that will impact the liveability and sustainability of the area.

Transparency must be the order of the day, as is clarity of intention. Does the state need to cash out the land and if so, for what purpose?

Whatever the case, any quiet attempt to sell state-owned property in dribs and drabs raises eyebrows.

Elephant in the room

What is the charter of PKNS? On its website, PKNS declares its vision as “building communities, enriching life … realising dreams”. Its mission statement: to nurture a vibrant and sustainable living environment through continuous innovation; provide service that exceeds expectations and have committed and competent human capital.

In the last 57 years, PKNS has developed 11 townships with residential, commercial and industrial components.

It carries an unsold inventory worth about RM500 million. This, according to CEO Datuk Mahmud Abbas in the latest PKNS newsletter Aspirasi, has been halved from the RM1 billion worth of unsold property when he joined PKNS in 4Q2021.

On its website, PKNS has a list of properties that are for sale. Interestingly, these include three-storey bungalows in Alam Nusantara (priced from a whopping RM3.8 million) and the Shah Alam Marbella hyperlink houses (from RM1.47 million).

Only two Rumah Selangorku projects — Kota Puteri Section 5 Townhouses (992 sq ft; from RM185,000) and Idaman Residensi apartments in Selangor Cyber Valley (1,000 sq ft; from RM232,000) — are available for sale. It is not immediately known how many of these homes are still available.

PKNS also has unsold shopoffices and factories. Added to these are residential, commercial and industrial land. Whether these tracts are considered part of PKNS’s unsold property is not clear but I have my doubts. The size and details of PKNS’s land bank is also unclear.

For a long time, developers in Selangor have been uptight about the direct competition from PKNS. However, as land is a state matter, fear of retaliation and blacklisting causes these developers to refrain from making their grouses official.

Where is PKNS heading?

I saw a glimpse of PKNS’s road ahead in its latest Aspirasi publication. In it, CEO Mahmud stresses that PKNS needs to up its game in order to carry out initiatives that are in line with the organisation’s objectives. Hence, the funding for the building of affordable homes, for instance, would need to be subsidised by the selling of high-end homes, he points out. 

Moving forward, PKNS intends to develop innovative products that meet market needs. Assisted living homes near hospitals are among the plans on the cards.Mahmud recalls how he was confronted with high borrowings, a decline in revenue and RM1 billion worth of unsold property when he joined the corporation. PKNS reported a “positive performance” for 2022 and expects to see an improvement on that this year. No details were offered.

My takeaway is that PKNS will move more aggressively in the days ahead, besides continuing to build and nurture entrepreneurs. These would be underpinned by the embrace of innovation and technology.

Has PKNS morphed into a full-fledged commercial body because of changing market forces and aspirations? Is the plan alien to its origins?

More importantly, does PKNS wield an unfair advantage over other market players? Let us not forget that development activities by the private sector contribute significantly to the state’s coffers. The playing field must stay level.

Ultimately, the question that begs to be answered is: What is PKNS’s endgame? That’s the real deal!

Nevertheless, it is time to review its role and objectives.

There must be clarity and transparency.

Au Foong Yee ([email protected]) is an editor emeritus at The Edge Malaysia

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