KUALA LUMPUR: The master developer of Bandar Malaysia, 1MDB Real Estate Sdn Bhd (1MDB RE), is not going to sell land in the Bandar Malaysia project. 

The property arm of the debt-ridden 1Malaysia Development Bhd (1MDB) is looking for both local and foreign joint-venture (JV) partners, who have the financial clout, to jointly develop the former air force base near Sungei Besi, Kuala Lumpur, according to IMDB RE.

“1MDB RE is looking for suitable investors to participate as development partner(s) in the Bandar Malaysia project. 1MDB RE is not currently looking to sell land in Bandar Malaysia,” 1MDB RE told The Edge Financial Daily in an email yesterday.

The partners will hold a stake in the development at the master developer level, 1MDB RE explained, adding that it would continue to hold a “strategic stake” in the project and remains involved in Bandar Malaysia. The commencement of development at Bandar Malaysia is part of cash-strapped 1MDB’s efforts to monetise its assets to service its RM42 billion debts. The process of request for proposal (RFP) has started with a call for expression of interest by CH Williams Talhar & Wong (WTW), which is managing the RFP for the 198ha Bandar Malaysia.

Meanwhile, 1MDB RE said it will not revalue the land in Bandar Malaysia and the Tun Razak Exchange (TRX) for the financial year ended March 2015. “We don’t have a current valuation. What we have is basically what we have recorded in the financial accounts last year.

“The land (in Bandar Malaysia) is valued at RM4.3 billion as of the financial year ended March 31, 2014,” said 1MDB RE in a statement yesterday.

The statement was issued after questions were raised during a media briefing earlier yesterday on the market value of Bandar Malaysia. “In terms of valuation (of land), why we valued the land last year and the year before was mainly because of the accounting standards. Earlier, we classified the lands as investment property.

“So following accounting standards, we need to revalue investment property on a yearly basis. That’s why we have revalued the land for the past three years,” said the statement.

For the financial year ended March 2015, 1MDB RE said “we have reclassified TRX land and Bandar Malaysia land as property development in progress. So we are no longer required to revalue the land on [an] annual basis.”

This article first appeared in The Edge Financial Daily, on July 1, 2015.