Creative wakaf land projects
UDA Holdings Bhd has come up with a development blueprint to sidestep limitations for proposed projects on wakaf (endowment) land in the country.
The blueprint — first of its kind here — will see the development of commercial properties for higher returns to the respective Muslim community, simply by leasing out the plots while maintaining the Islamic titles.
Otherwise, complications arise due to wakaf land currently being regulated and managed under different laws and regulations within the purview of the States Islamic Religious Council — consisting of 15 states and federal territories in the country, said UDA chairman Datuk Nur Jazlan Mohamed yesterday.
“The company is not out to make huge profits. This is part of our corporate social responsibility to help develop wakaf land based on its market value.”
Even so, UDA does not foresee the land-lease model attracting unhealthy competition as the profit margin is nominal, stressed Nur Jazlan.
Generally, wakaf land is used to build mosques and Muslim community centres as such plots are usually donated strictly for religious and charitable purposes, he added.
Since such wakaf plots could generate higher returns for the respective communities with alternate developments, he said UDA had engaged the Islamic councils and also Muslim financial institutions to come up with the leasehold blueprint.
The breakthrough was achieved with a 99-year leasehold model for wakaf land with beneficial ownership remaining with the respective state islamic religious councils.
With this blueprint success, UDA will be rolling out its flagship project on wakaf land in Penang. The soon-to-be-completed development of a three-storey business centre, comprising of 27 shoplots and as well as 76 units of two-storey terraced houses, has a gross development value of RM24 million.
The wakaf plot was donated by Seetee Aisah Mahmood way back in Sept 30, 1901 and was earning rental at only RM400 a year before UDA took over, he said.
Since the redevelopment, he said that plot’s assessment value had increased multifold to RM1.2 million.
Nur Jazlan said such a redevelopment model could potentially boost returns for wakaf land within urban centres and talks are already being held with respective authorities in Kuala Lumpur, Selangor and Johor for more such projects.
Research conducted by the Malaysia Islamic Development Department back in 2000 estimated there was then over 35,727ha of wakaf land in the country.
Nur Jazlan pleads: ‘Don’t bully UDA’
UDA Holdings Bhd is caught in-between implementing the bumiputra agenda policy and sustaining its profitability in the long run.
“I do not want UDA to be bullied any more because we also have our responsibilities,” chairman Datuk Nur Jazlan Mohamed yesterday said, adding that the bumiputra agenda can only be carried out when the company has excess money.
He explained that the corporatised government agency had no choice but to be competitive to survive as it no longer received direct financing from the government.
Further, UDA managing director (Ahmad Abu Bakar) and the management team are subject to assessments by the Finance Ministry and to keep up with their key performance indicators. Nur Jazlan pointed out that the bumiputra agenda has always been pulling them back, derailing any plans to meet targets.
As such, UDA has been reviewing its charter used to help protect bumiputra interests, added Nur Jazlan, who is also Pulai MP. He urged the government to offer grants to UDA to assist in the bumiputra agenda implementation so as to not impede the body’s commercial performance.
UDA has been incurring losses over the years from about 70 tenants subsidised by UDA at two projects — BB Plaza in Bukit Bintang and Komplex Niaga Utama in Bangsar. He said tenants at BB Plaza are paying only about half the market rental rate for the area.
As such, UDA had lost profits close to RM1 million for each tenant over the span of 10 years, he added.