Dear friends of i3 Forum,

As the title implies

WHEN PALM OIL ESTATES TURN INTO INDUSTRIES & TOWHSHIPS: THE HIGHEST VALUE IS ACHIEVED

WE CAN SEE FROM EXAMPLES AFTER MORE GOOD EXAMPLES

1. THERE ARE LONG TERM VALUE APPRECIATION FOR PALM OIL COMPANIES COMPARED TO OTHER INDUSTRIES

WHY?

ANSWER:

THE ANSWER RESTS UPON THE ASSETS OF PALM OIL ESTATES WHICH ARE LANDS. AND LANDS ARE INDETRUCTIBLE LIKE GOLD

EVEN AFTER TWO ATOM BOMBS DROPPED ON HIROSHIMA & NAGASAKI IN YEAR 1945 MORE THAN 78 YEARS AGO THEY ARE NOW THRIVING CITIES FILLED WITH PEOPLE

SO ARE PALM OIL LANDS. THEY ONLY GET MORE AND MORE VALUABLE AS THE YEARS GO BY

1. VALUE IS GAINED BY SELLING PALM OIL ESTATES TO OTHER PALM OIL PLAYERS. LIKE TSH SOLD PALM OIL LANDS IN SABAH TO OTHER PALM OIL GROWERS. OR LIKE KLK TAKING OVER THE ENTIRE PALM OIL BUSINESS OF IJMPLANT AT RM3.10 PER SHARE (FROM RM1.86)

2. CONVERTING PALM OIL ESTATES TO INDUSTRIES WILL COMMAND A HIGHER PRICE

LIKE BPLANT SOLD LANDS TO YTL-POWER FOR INDUSTRIES LIKE DATA CENTER OR SOLAR FARM

3. BUT THE HIGHEST VALUE COMES FROM CONVERTING PALM OIL ESTATES TO NEW TOWNSHIPS

LIKE JCORP TOOK KULIM PRIVATE AT RM4.10 (FROM RM2.50) TO BUILD 2 NEW TOWNSHIPS IN PENGERANG

SEE THIS GOOD EXAMPLE

Report: Bottling factory site in PJ Section 13 sold at record price

EdgeProp.my January 16, 2021

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PETALING JAYA (Jan 16): A bottling factory site (pctured) in Petaling Jaya’s Section 13 has been sold at “a new record” price “for industrial land transactions in the area” to  a Penang property developer, reported The Edge Malaysia.

Sources told the weekly that Singapore-based National Aerated Water Co (KL) Sdn Bhd has disposed of the site, popularly known as Kickapoo land, to GSD Land (M) Sdn Bhd for RM46 million (about RM514 psf).

Savills Malaysia is the appointed exclusive marketing agent for the deal. “We are in the final stages of the disposal,” deputy managing director and head of capital markets Nabeel Hussain told publication.

VPC Alliance (M) Sdn Bhd managing director James Wong said the “sale of the Kickapoo factory at RM514 psf is probably the highest commercial land sale in the commercial precinct of Petaling Jaya’s Section 13. The sale was transacted pre-Covid-19 pandemic”.

He added that the buyer likely paid a high price since “the land is zoned for mixed commercial development with a plot ratio of 3.25” and there is “limited supply of commercial land in Petaling Jaya, which is in good demand”.

The bottling plant, which used to churn out Sinalco and Kickapoo Joy Juice drinks many years ago, is located on 2.06 acres or 89,560 sq ft of leasehold land called Lot 54. It was put up for sale in “late 2019” with 41 years remaining on the lease.

The Edge wrote that “One of the attractions of the land is its dual frontage” as it “faces Jalan 13/6 and Jalan Professor Khoo Kay Kim, formerly known as Jalan Semangat”.

Potential development activities on the site “can include services, commerce, retail, residential, facilities and infrastructure, and utilities”.

“Following the sale of the former Kickapoo factory site, attention will now turn to the much larger tract of 9.93 acres belonging to Dutch Lady Milk Industries Bhd, located across the road from the site,” it added.

Calvin comments:

How come such old dilapidated bottling factory at the end of lifespan has SUCH HIGH RESIDUAL VALUE?

YES! THE UNDERLYING LANDS LONG LONG AGO WAS ULU. THEN TURNED INTO INDUSTRIES

AND FINALLY COMMAND SUCH HIGH PRICING?

THE ANSWER IS: BECAUSE FINALLY IT TURNS FROM INDUSTRIES TO TOWNSHIPS

STAGE ONE : PALM OIL ESTATES

WHERE TREES GROW

STAGE TWO: INDUSTRIES WHERE ALL KINDS OF THINGS (GOODS ARE MADE)

STAGE THREE: TOWNSHIP WHERE HUMAN BEINGS CONGREGATE LIVE, WORK & PLAY

SO READ AGAIN

Potential development activities on the site “can include services, commerce, retail, residential, facilities and infrastructure, and utilities”. (NOT POLLUTING INDUSTRIES ANY MORE)

SO LAND VALUE GOES UP MUCH MUCH HIGHER AS HUMANS WORTH MORE THAN THINGS, GOODS OR PLANTING

THAT'S IT!

ONCE UPON A TIME MR. SIME & MR. DARBY ARRIVED FROM ENGLAND ON MALAYSIA SOIL AND JOINED TO FORM SIMEDARBY

AFTER 200 YEARS THE PLANTATION LANDS ARE NOW TOO VALUABLE FOR PLANTING TREES. SO THEY ARE SOLD AND CONVERTED TO HOUSING

SEE

Sime Darby Plantation to sell land in Kapar to Sime Darby Property for RM618 mil

Shazni Ong / 

KUALA LUMPUR (Dec 1): Sime Darby Plantation Bhd is disposing of 949 acres of freehold land in Kapar, Klang to Sime Darby Property Bhd for RM618 million.

The deal is in pursuant to one of the nine call option agreements entered into between both companies in 2017, when Sime Darby Bhd embarked on a "pure play" exercise, which involved the creation of stand-alone listed entities in plantation, property, trading and logistics sectors.

In a Bursa Malaysia filing, Sime Darby Plantation said it signed

an agreement on Thursday (Dec 1) to sell the Kapar land to Sime Darby Property's wholly owned subsidiary, Sime Darby Property (Bukit Tunku) Sdn Bhd.

It said the land, which was acquired in 1975, forms part of Bukit Kerayong Estate, and is being used for agricultural purposes.

Proceeds from the disposal will be utilised for its working capital requirements, added Sime Darby Plantation.

The original cost of investment in the Kapar land was RM4.7 million, while another RM10.7 million was spent on subsequent investments in bearer plants and immovable assets up to April 2013.

The net book value of the land recorded by the group as of Dec 31, 2021 was RM11.8 million, which included the allocated original cost of investment and capitalised costs.

Sime Darby Plantation said the retailed party deal is expected to be completed in the second quarter of 2023.

Kapar land to be developed into integrated sustainable industrial township

Sime Darby Property, meanwhile, said the purchase of the land would be fully satisfied in cash, via a combination of internally generated funds and bank borrowings.

The property developer said in a filing that the land is located four kilometres away from the Kapar interchange of the West Coast Expressway with accessibility to be further enhanced by the proposed development of East Coast Rail Link.

Sime Darby Property said the acquisition is in line with the group's journey under the SHIFT25 strategy to transform from a pure play property developer into a real estate company by broadening and diversifying income streams.

The acquisition is also in line with the group's active land bank management, by adding value to its existing matured townships in areas with promising development prospects.

The company added that the land would be developed into an 

integrated sustainable industrial township given the strategic location and sizeable net land area.

"The first phase of the proposed development is expected to be launched in 2024 and will be structured as a phased development over a period of 10 to 15 years.

"Based on the preliminary master layout plan, the estimated gross development value of the development is estimated to be between RM5 billion and RM6 billion," it added.

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FROM THE ABOVE LET US DO A BREAK DOWN

1) SIMEDARBY PLANT SELLING 949 ACRES OF LAND TO SIMEPROP FOR RM618 MILLIONS

TO GET COST PER ACRE DIVIDES RM618,000,000 by 949 ACRES

= RM651,211 PER ACRE SOLD

SEE FURTHER

The original cost of investment in the Kapar land was RM4.7 million, while another RM10.7 million was spent on subsequent investments in bearer plants and immovable assets up to April 2013.

NOTE: THE ORIGINAL COST OF THESE 949 ACRES WAS ONLY RM4.7 MILLIONS 

or RM4,952 PER ACRE!

AND SPENT RM10.7 MILLIONS IN PLANTING AND BUILDING IMMOVABLE BUILDINGS ON THESE LANDS (SIMEPLANT ALSO HARVESTED AND SOLD LOTS OF FFB & PALM OIL TO RECOUP ALL COSTS)

NOW AFTER ALL THESE YEARS THE ESTATE  IS SOLD FOR A WHOPPING RM618 MILLIONS

SO FROM RM4.7 MILLIONS TO RM618 MILLIONS

NOW READ FURTHER INTO THE FUTURE

The acquisition is also in line with the group's active land bank management, by adding value to its existing matured townships in areas with promising development prospects.

The company added that the land would be developed into an 

integrated sustainable industrial township given the strategic location and sizeable net land area.

"The first phase of the proposed development is expected to be launched in 2024 and will be structured as a phased development over a period of 10 to 15 years.

"Based on the preliminary master layout plan, the estimated gross development value of the development is estimated to be between RM5 billion and RM6 billion," it added.

READ ONE FINAL TIME

"Based on the preliminary master layout plan, the estimated gross development value of the development is estimated to be between RM5 billion and RM6 billion," it added.

SO THESE 949 ACRES OF LAND 

ORIGINAL COST RM4.7 MILLIONS.........WILL HAVE A FUTURE DEVELOPMENT VALUE OF BETWEEN RM5 BILLIONS TO RM6 BILLIONS

KINDEST REGARDS

Calvin Tan

Please buy or sell after doing your own due diligence or consult your Remisier/Fund Manager or Real Estate Valuer

Sime, Darby and Co. Limited[edit]

In October 1910, British businessmen William Sime and Henry Darby established Sime, Darby and Co., a fledgling player in the lucrative rubber industry. The company later diversified to cultivating palm oil and cocoa and met with enormous success. At the time of the company's founding, William Middleton Sime was a 37-year-old Scottish adventurer and fortune seeker. He had two failed ventures behind him – one in import-export business and the other in coffee plantations – when he left his job as a mercantile assistant in Singapore. Henry Darby was a wealthy 50-year-old English banker who owned property in Northern Malaya.^[2]