Permodalan Nasional Bhd (PNB) wants to monetise its investment in its property development companies. That is well known and something that even its top officials do not deny.

Names that have been linked to PNB?s plan include Mah Sing Bhd and S P Setia Bhd ? two companies in which the investment fund is a shareholder.

Two weeks ago, it was reported that PNB was looking to jointly develop, with Mah Sing, its landbank in the centre of Kuala Lumpur as well as in Johor.

Observers reckon the rationale for choosing Mah Sing is probably because the developer is well known for its ability to develop small pockets of land within a short time frame.

Another name that has been cropping up in PNB?s property rationalisation plan is S P Setia ? one of the biggest names on the local property development scene. Its Setia Alam township development is well established while other projects associated with it have also been well received. Buyers have made handsome profits on the secondary market from the resale of its homes.

S P Setia?s president and CEO Tan Sri Liew Kee Sin did not deny such talk when the media asked him about it. He said though that whatever the plan, it ?must add value? to the company.

While S P Setia and Mah Sing have their niche in property development that has attracted PNB, it must not be forgotten that PNB has within its stable Sime Darby Property Bhd (SDP).

Why isn?t PNB looking at SDP, which has an extensive property development division? The latter also has the largest landbank in the country. Isn?t it good enough to develop PNB land within the city centre?

The property arm of the conglomerate has a relatively good track record for its projects. The merged Sime Darby may not be, to some, the most efficient oil palm planter, but its brand certianly carries weight in property development. Its flagship development, the township of Subang Jaya, is proof of its skills and capabilities.

Sime Darby?s landbank in the Klang Valley stretches from the Guthrie Corridor in the north of Selangor, to Putrajaya, Seremban and Port Dickson. The 37,000 acres in its landbank is about as big as Kuala Lumpur and three times the size of Putrajaya.

That, however, isn?t enough to whet PNB?s appetite for property assets as it continues buying stakes in public-listed developers.

PNB took Petaling Garden Bhd, Island & Peninsular Bhd and Pelangi Bhd private between 2005 and 2007. The three collectively own 7,200 hectares of land. Apart from land, PNB also has buildings in prime locations that can easily be packaged into a real estate investment fund (REIT). Within its fold is also Syarikat Perumahan Pegawai Kerajaan Sdn Bhd (SPPK), which has a good property development record.

Because of its huge landbank, Mah Sing and S P Setia are said to be possible vehicles for PNB to unlock value.

Like it or not, if any such move takes place, Sime Darby may be viewed by the market as not being the ?favourite child? of PNB. That?s despite PNB having the highest stake in Sime Daby among all the property companies that it owns.

PNB holds about 53% stake in Sime Darby, which wholly owns Sime Property.

In contrast, PNB has accumulated almost 20% in Mah Sing and has direct and indirect interests of close to 32.9% in S P Setia. Another company that PNB has bought a stake in is I-Bhd, where it has 18.1%.

There are other property companies, such as A&M Realty Bhd, IGB Corp Bhd, Crescendo Corp Bhd, in which PNB and its units have about a 5% stake or less. But these are held merely for investment purposes.

But to be fair to the government-backed fund management company, it has not firmed up any plans on how it plans to monetise its property development division. While it has accumulated massive property assets over the past two years, nothing has come out of it so far.

At the end of the day, whichever property company PNB chooses to use, nobody would probably question its decision. But it certainly won?t stop tongues wagging as to why it isn?t looking at companies where it has the most say.

This article appeared in Corporate page of The Edge Malaysia, Issue 755, May 18-24, 2009