The Petaling Jaya Utara MP pinned a lot of the blame for the oversupply of such property on government-linked companies (GLC) and government-linked investment companies (GLIC).
“The Star reported in April this year on the increasing involvement of GLICs in the property sector, both directly and indirectly.
“EPF has been directly involved developing the new Kwasa Damansara township, which has a massive size of 2,300 acres and RM50 billion in gross development value (GDV).
“Permodalan Nasional Bhd (PNB) on the other hand, is developing the 118-storey Menara Warisan project next to the historic Stadium Merdeka. It will offer 4.3 million square feet of residential, hotel and commercial space,” Pua said in a statement.
He added that with PNB also being the single biggest shareholder of SP Setia, that means the GLIC has oversight on some of the biggest luxury developments in the Klang Valley, including the 25-acres KL Eco-City, Setia Sky Seputeh and many others.
“In addition, EPF and PNB jointly owns 63% of Sime Darby Bhd, which recently launched its RM8 billion GDV AYLA Kuala Lumpur project which covers an area of 360 acres.”
Pua, who is also DAP national publicity secretary, was referring to the government’s decision to freeze luxury property developments valued at over RM1 million following a report by Bank Negara Malaysia (BNM) on Nov 17, warning that unsold residential properties were at a decade-high level.
“BNM had first raised the issue in their 2015 annual report. In its latest report, BNM said that in the Klang Valley, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017.
“The situation is only set to get worse as there is an incoming supply of 38 million square feet of office space.”
Pua also highlighted the finance ministry-owned UDA’s Bukit Bintang City Centre (BBCC) in the site previously occupied by the Pudu Prison, and which has a GDV of RM8.7 billion.
“There is also the RM20 billion GDV KL Metropolis project, developed by a private company, Naza TTDI, in a land-for-building deal with the international trade and industry ministry; the Khazanah-owned UEM-Sunrise, which specialises in high-end residential market in prestige locations such as Mont Kiara.
“Then we have the two mega-property developments linked to 1MDB, that is the 70-acre Tun Razak Exchange (TRX) and the 486-acre Bandar Malaysia,” Pua said.
With all the evidence pointing to how GLCs have contributed to the glut which is threatening our property space in the country, Pua said no policy prescription is complete without addressing the GLC and GLICs’ involvement.
“The other issue is if the government could grant exemptions on the ‘freeze’ for Bandar Malaysia and TRX Exchange, why would it not do the same for the GLCs and GLICs as well,” Pua said.
He questioned the implication such exemptions will have on the private sector in the country.
“Should they all just pack their bags and take their money to other countries to invest?”
Consultant: Any freeze will have impact on land or property valuation
Luxury project freeze: Govt only looking out for 1MDB, says Pua