AFFIN BANK BUYS TRX LAND FOR $255 MILLION @ RM4,645 PER SQ FT? IS THIS PIE-IN-THE-SKY VALUATION AGAIN?

The announcement by Affin Bank today that it had acquired a 0.51 hectare parcel of land at the Tun Razak Exchange (TRX) development is astounding news. CLICK HERE for the press announcement.

The 70-acre TRX land bank is of course owned by Kuala Lumpur International Financial District SDn. Bhd., (KLIFD) which in turn is a wholly owned subsidiary of 1MDB.

The math for per sq. ft. (psf) of land works out as follows:

1. Price of land = $255 million.

2. 1 hectare = 2.47105 acres.

3. 0.51 hectare = 2.47105 x 0.51 = 1.26 acres.

4. 1 acre = 43,560 sq. ft. 

5. 0.51 hectare  = 43,560 x 1.26 acres = 54,896 sq. ft.

6. Price paid per sq. ft. = $255,000,000/54,896 = $4,645 psf.

The sale in May 2015 of 1.56 acres of TRX land to Tabung Haji for $189 million @ $2,774 psf raised a stink for more reasons than one, but particularly, the valuation.

Now we have an even more incredible valuation @ 67% more than the price determined 2 months ago. 

What the hell is going on?

Once again, that name is in the thick of things - Tan Sri Lodin Wok who is Chairman of 1MDB as well as a director of Affin Bank. 

Of course, Affin Bank's announcement mentions that Tan Sri Lodin Wok did not participate in the decision making. China Wall and all that!

But, should the MACC be called in with state-owned land prices sky-rocketing stratospherically in dealings between GLC's and 1MDB? Are these really arm's length transactions and market prices?

Or, has someone made a boo-boo with the numbers?

 Donplaypuks® with pie-in-the-sky land valuations, man!