A 260 acres open space earmarked for the building of Penang Global City Centre (PGCC) in Malaysia is currently surrounded by controversy. So much so that the former Chief Minister of Penang, Tan Sri Dr Koh Tsu Koon has to dodge bullets by the current Chief Minister, Lim Guan Eng at a debate entitled The True Story Behind the Land Controversy in Penang. A one-liner by Lim Guan Eng sums it up for the debate that night: “If there was no corruption in the previous Barisan Nasional government, then they would not have fallen in the March (2008) election tsunami.” Yep, I guess that says it all FORMER Chief Minister, Tan Sri Dr Koh Tsu Koon!! The list of land scams by the authorities in Malaysia goes on:
- Businessman alleges irregularities in sale of Penang Turf Club land.
- Land scam to be investigated.
- Politicians identified as likely culprits in land scam.
- Multiple land titles issued.
- Experts to improve e-Tanah land registration system.
When I propose foreign land investments to investors in Malaysia, I tend to get this question a lot, “How come you guys don’t invest in land in Malaysia instead?” Or another popular one, “How come we get development approved in Malaysia so quickly and yet in Canada it takes 2 - 4 years of planning?” Hmm……let’s see. Could it be because there is no transparency in land dealings in Malaysia compared to Canada? Could it be because like in the example of PGCC, where the land zoned as “open space” sold at RM43psf is now worth RM250psf when it was rezoned as “mixed development” in a controversial way (despite public protest)? Could it be because the developer tends to need close political ties (smells of corruption)? Or could it be because it is not uncommon for multiple land titles issued on the same parcel of land (manipulation of the land registration system)?
In Alberta, Canada, the government guarantees the accuracy of the land title. As a result, anyone who suffers a loss due to an error on the title or even as a result of a fraudulent transaction may take steps to obtain compensation from the government through the operation of the Assurance fund. The titles are electronically registered and provides easy access via a web-enabled Spatial Information System (SPIN). You can easily verify land ownership over the Internet.
Over in Alberta, Canada it takes 2 - 4 years for development approval because they follow a very systematic process that even incorporate public hearings where adjacent land owners are invited to raise their concerns. All views are taken into account before development approvals are given. And no… greasing a politician’s hand will not get your development approval ahead any faster!
Maps are easily available at the town/city council websites to verify the status of the land you are investing in. Land Use Bylaw Map, Area Structure Plan (ASP) Map and Future Land Use Map are useful maps whereby you can identify whether the land you are investing in is incorporated in the town/city council master plan.
1. Land Use Bylaw Map - Tells you what is the current permitted land use.
2. ASP or Future Land Use Map - Tells you what is the future permitted land use.
The essence of making money from land banking is when a parcel of raw land is bought up by a developer for development so make sure that the land you are investing in has development potential by utilizing the various maps. If the land is clearly stated as residential usage… as long as the developer doesn’t apply to get a casino or commercial mall approved for that land, it is more of a matter of complying to the town/city council regulations to get the development approved. In Canada… it is systematic and transparent. I will end my post with a few examples of town/city council maps below:
Source: landbankingdotus
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