KUALA LUMPUR, Oct 5 — The market price of undeveloped freehold industrial land in the vicinity of the land acquired by Umech Land Sdn Bhd from Penang Development Corp (PDC) in Batu Kawan Industrial Park 2 (BKIP2) ranges from RM21 to RM35 per square foot (sq ft), Sunway Bhd said.

In a response to Bursa Malaysia’s query today, the conglomerate said the purchase of the 226.20 hectares of land in BKIP2 made by Umech Land from PDC was for RM646.02 million.

On Oct 3, the Penang Chinese Chamber of Commerce highlighted that the land deal was significantly undervalued. Moreover, it questioned why the sale was not done through an open tender.

"Given that the land is leasehold land and undeveloped with a lot of landfilling and infrastructure work to be undertaken by Umech Land, the implied price of RM27 per sq ft is deemed to be a fair price,” Sunway said.

On Sept 27, the group announced that its 70 per cent owned subsidiary, Umech Land, had entered into a joint development agreement with PDC to develop the prime industrial land in Batu Kawan in exchange for which PDC would receive a land entitlement worth RM646.02 million.

The land entitlement would consist of a RM64.6 million deposit, with the remaining RM581.42 million to be paid in four instalments.

Both parties will collaborate on the development of the land, which will be known as "Batu Kawan Industrial Park 2”. — — Bernama