KUALA LUMPUR: Felda chairman Tan Sri Isa Samad defended the corporation's purchase of a serviced apartment block in London for almost half a billion ringgit, stressing that it was "a good offer".
He said the hefty price was expected because of its location in Bayswater, one of London's most cosmopolitan areas.
"Buying properties in London can never go wrong. If we sell it next year, for sure we will make a profit."
Isa explained that the property acquisition was not carried out by its plantation arm, Felda Global Ventures Bhd (FGV), but by its new investment company, Felda Investment Corporation (FIC).
Apart from the London property, FIC manages Felda's nine other hotel properties in Perak, Terengganu, Negri Sembilan and Sabah.
Isa also questioned the bad publicity over the London property purchase when other government-linked companies (GLCs) are doing it as well.
"If the other GLCs are doing it, why not us?" he responded to queries at a press briefing at Menara Felda, here, yesterday.
Last month, Felda announced the purchase of the Grand Plaza Serviced Apartments for STG98 million (RM508.7 million), its second major property acquisition after the Grand Borneo Hotel in Kota Kinabalu for RM86 million.
On another "overpriced" purchase in the form of Pontian United Plantations Bhd for RM1.2 billion, Isa denied that the price was on the high side.
"It is for 16,000ha of land. IOI Corp Bhd paid the same price for 12,000ha. It was a good deal considering that plantations in Sabah are more expensive than in the peninsula."
FGV group president and chief executive officer Mohd Emir Mavani Abdullah said the acquisition was to fulfil its initial public offering (IPO) obligation, which is to increase its plantation hectarage.
"We had cash in hand (from the IPO proceeds) and we paid RM65,000 to RM67,000 per hectare. In comparison to similar purchases by others, ours was not that high," he said, adding that FGV's balance from the IPO proceeds now stand at about RM2.6 billion.
Mohd Emir said FGV will be looking at acquiring more plantation land.
Meanwhile, FGV said in a statement it will maintain and abide by its dividend policy of a minimum payout ratio of 50 per cent of its net profit.