This article first appeared in The Edge Malaysia Weekly on November 25, 2019 - December 1, 2019

BOH Plantations Sdn Bhd, a tea grower that produces the popular Boh Tea, is looking to divest 651 acres of its plantation in Southern Klang Valley, Selangor. The tract, part of the Boh Tea Farm in Seri Cheeding where lowland tea is grown, may be able to fetch as much as RM992 million.

The land forms half of Boh’s estate in Kuala Langat, near the Bandar Saujana Putra township. Boh Plantations, which was set up 90 years ago, is controlled by the founder’s family through JA Russell & Company Sdn Bhd, which owns 70.99% equity interest. Permodalan Nasional Bhd has a 25.61% stake in the company.

The vendor has appointed real estate agency CBRE | WTW as the exclusive marketing agent to seek expressions of interest (EOI). An EOI differs from a sale by tender as it is generally non-binding. Both sides do not have to proceed with the deal and interested parties also need not give an offer price. Instead, they can write in to indicate their interest and negotiate a deal later on. In comparison, an offer made via tender exercise cannot be changed. The closing date for Boh’s EOI is Dec 5.

CBRE | WTW managing director Foo Gee Jen says Boh is one of two companies in the country that grows lowland tea commercially on a large scale. “The terrain is undulating with few high spots, similar to Kajang Country Heights or Kenny Hill,” he says, adding that some portions are interplanted with taller trees, in this case, oil palm.

According to him, the 651 acres comprise three agricultural lots that have been zoned for housing. Purchasers will need to pay a conversion fee to the local authority — typically, a percentage of the enhanced value of the land — if they want to change the use of the land.

“This is the right time [for Boh] to sell as all the corridors surrounding this parcel are developed or being developed,” Foo opines, adding that the vendor prefers to sell the land rather than look at jointly developing it with a property firm.

Apart from Bandar Saujana Putra, there are three major township projects nearby — Gamuda Cove by Gamuda Land Bhd, Bandar Rimbayu by IJM Land Bhd and Eco Sanctuary by Eco World Development Group Bhd.

The land up for sale is near the 1,530-acre Gamuda Cove and is separated from it by an Orang Asli forest reserve. In September, Gamuda Land opened the new Gamuda Cove Interchange that provides direct access to the township from the North-South Expressway Central Link (ELITE) Highway. Foo says this will help facilitate access into Boh Plantations’ land.

IJM Land’s 1,879-acre Bandar Rimbayu township has residential, commercial, recreational and parkland components and a gross development value (GDV) of RM11 billion while the 308-acre Eco Sanctuary has a GDV of RM8 billion.

A real estate agent says Boh Plantations’ land could likely fetch RM30 to RM35 psf, or a total of RM850 million to RM992 million for the 651 acres, which is equivalent to 28,357,560 sq ft.

Another real estate agent contacted by The Edge pegs the price of land with infrastructure in the area at above RM30 psf.

However, a property valuer gives a more conservative figure of RM10 to RM12 psf after analysing recent sales data. At that price, that would translate into a total value of RM283 million to RM340 million.

Boh’s history can be traced back to the 1890s when John Archibald Russell, also known as JA, arrived in Kuala Lumpur at the age of six with his father and four brothers.

When he grew up, he ventured into coal mining, property development and construction but saw the potential for tea as a crop in then Malaya. He partnered A B Milne, a veteran tea planter from Sri Lanka, and was granted a land concession in Cameron Highlands in 1929.

In 1949, his only son Datuk Tristan Russell took over the business. Today, Boh Plantations is run by the third generation of the family, led by its CEO Caroline Christine Russell.

A search on the Companies Commission of Malaysia website shows that the company lists growing and production of tea, packing of tea for retail trade and growing oil palm among its businesses.

In its financial year ended Dec 31, 2016 — its latest publicly available financials — Boh Plantations posted a net profit of RM28.18 million on revenue of RM181.05 million. Its accumulated profit stood at RM235.52 million while total liabilities came to RM28.97 million.

Between them, JA Russell & Company Sdn Bhd and Permodalan Nasional Bhd own 96.6% of the company. The remaining 3.4% is held by a number of shareholders, including the Russell family.

Some of the major shareholders of JA Russell & Co include Jayone Holdings Ltd Corp (28.43%), Tristan (16.52%), Mikell Investments Ltd (14.88%), Bopac Sdn Bhd (10.75%), Tea Traders (Services) Sdn Bhd (8.15%), Ruth Ann Medley (5.91%) and Caroline Christine Russell (1.74%).

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