Auditor General's Report: Challenges in securing prime locations, incompetence the downfall of PR1MA, say experts

KUALA LUMPUR: Real estate experts said research, challenges in securing prime locations and professional incompetence have led to PR1MA Corporation Bhd's downfall.

Although the project was set up with noble objectives, particularly to provide affordable homes for the B40 segment of the population, there was a disconnect when addressing land matters as it fell under state jurisdiction.

"This made securing suitable land for development proved to be difficult for them," said Henry Butcher Real Estate Sdn Bhd chief operating officer Tang Chee Meng,

As a result, he said, the available land was not in locations favoured by the targeted buyers in some cases.

He said for any developer, it is imperative to conduct comprehensive studies on the land they intend to build on, considering factors such as pricing and suitability.

"The potential homeowners targeted by PR1MA may have found it unnecessary to purchase homes in areas that were not centrally located or were deemed too small.

"Additionally, the distant locations from workplaces made it inconvenient for potential buyers," said Tang.

He said those with the authority may have had to contemplate taking action to recover debts.

He added unless there was government intervention, there remained the risk of financial losses.

Echoing the comment, real estate expert Previn Singhe said location selection and execution could have resulted in poor absorption on PR1MA projects.

"However, the objective was really well laid out and should have emulated the Housing & Development Board (HDB) or even exceeded it.

"It is a fantastic initiative but it has to be run by real estate professionals from a development, asset management and property management perspective," said the Zerin Properties founder.

Earlier today, it was reported that 10 federal agencies reported loan balances amounting to RM122.388 billion for the year 2022.

According to the Auditor General's Analysis of Financial Statements of Federal Agencies for the year 2022, the amount represented 99.4 per cent of the RM123.137 billion of the loan balances of 24 federal agencies during the year.

PR1MA was one of the federal agencies with the highest loan balances at RM3.792 billion.

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