Urbanco loses MVR 705m from Villa's Thilafushi land deal
While a land transfer deal was carried out in Hulhumale, the tenure of the two lands in Thilafushi was only a few days away from expiration.
By
Ahmed Naif
Jumhooree Party (JP) leader Gasim Ibrahim's Villa company was given two plots of land totalling 549,905 square feet from the industrial island of K. Thilafushi as a compensation for letting go of a 90,000 square feet of land they had earlier purchased from Hulhumale.
While Urbanco remains mute regarding the deal, it is clear from a Civil Court ruling last week that the two lands in Thilafushi was sold to Villa for MVR 228.7 million or MVR 416 per square foot.
Villa paid the money to the then Housing Development Corporation (HDC) way back in the early 2000s to purchase the land from Hulhumale Phase I, near the Platinum Residence. Villa did not pay any extra money this time to buy land from Thilafushi. JP's senior spokesman Ali Solih confirmed it.
Given this price, is this a decision that will benefit Urbanco? Or was it the Villa company that benefited from this?
When Urbanco last announced the sale of land from Thilafushi in February, the reserve price was MVR 1,700 per sqft. Therefore, it has to be seen that this is the lowest price at which land is sold from Thilafushi, which has a huge demand for the land for industrial work and the demand will rise with the Thillamale Bridge in the future. Even if calculating at the lowest price, the total value of the two plots sold to the Villa company would be MVR 934 million.
The lands given to Villa by Thilafushi:
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Land 1: 393,212 sqft; MVR 668 million at market value
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Land 2: 156,693 sqft; MVR 266 million at market value
Urbanco has lost MVR 1,284 per square foot.
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In terms of total value, if two plots are sold to Villa at market rate, Urbanco will get MVR 934 million
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It can be said that Urbanco has suffered a loss of MVR 705.3 million in the land exchange deal
While the land allotted to Villa for the construction of flats was released, no work was ever done there. Some construction materials, such as gravel stone and sand, were kept there.
Urbanco did not immediately respond to a request for comment.
The land was taken over from Villa during former President Abdulla Yameen Abdul Gayoom's administration. Then, after this government came, the land was returned to the company. Nothing has been done there since then.
Ali Solih, who disclosed the details of the transaction on behalf of Gasim, said Villa gave up the land to give the opportunity to Urbanco as others were interested in investing there. Villa claims that the transfer of land is good even at a loss, arguing that Urbanco’s profits from the land released from Hulhumale will increase.
In addition, the two lands allotted to Villa in Thilafushi are already leased by Villa Gas and Villa Cement. While a land transfer deal was carried out in Hulhumale on the pretext of getting a better investor, the tenure of the two lands in Thilafushi was only a few days away from expiration.
Villa Gas and Villa Cement made consistent profits for the company.
