Thank you for the analysis. However there is a “small” problem, TSH’s Indonesian lands are only 35 year leaseholds expiring in the 2040s to 2050s, as we can see from their Annual report. The value is very different from land in Malaysia which is usually 99year leaseholds or held in perpetuity as freehold land. Their Indo plantations’ land value will drop rapidly as the lease expiry date approaches, and at the end of the lease they will need to pay the Indo government to renew the lease at the then current rates which may be much higher if East Kalimantan will be more developed by then (in fact the Indo government may decline to renew the lease).
Blog: CALVIN TAN ON MALAYSIA 2ND HALF 2023: WHERE TO PUT YOUR MONEY IN LIGHT OF RECESSIONARY TIMES, Calvin Tan
2023-06-12 10:12 | Report Abuse
Thank you for the analysis. However there is a “small” problem, TSH’s Indonesian lands are only 35 year leaseholds expiring in the 2040s to 2050s, as we can see from their Annual report. The value is very different from land in Malaysia which is usually 99year leaseholds or held in perpetuity as freehold land. Their Indo plantations’ land value will drop rapidly as the lease expiry date approaches, and at the end of the lease they will need to pay the Indo government to renew the lease at the then current rates which may be much higher if East Kalimantan will be more developed by then (in fact the Indo government may decline to renew the lease).