PETALING JAYA: While 1Malaysia Development Bhd (1MDB) is seeing a positive balance sheet with total assets exceeding total debts by RM3 billion, it cannot be denied that revaluation of its land assets, which were acquired relatively cheaply, is what saved it from slipping into a deficit. As at last January, 1MDB had RM53 billion in assets compared with RM50 billion in debts, according to the Public Accounts Committees (PAC), which released the findings of its investigations into 1MDB last Thursday. At a glance, while the appreciation of 1MDB's asset value could be significant, it does however raise the question of how much its acquisition price has helped supplement its balance sheet over the past few years. While details of 1MDB's latest assets and debts are not available, past records do show that its cheap buys in the land division with the federal government especially have worked to help bolster its balance sheet by at least RM6.36 billion. The site for the Tun Razak Exchange (formerly known as the Kuala Lumpur International Financial District), one of the most valuable tracts of land in the city centre, was acquired for RM230 million or about RM75 per sq ft in 2011. The 70-acre land registered a value of RM2.7 billion in 1MDB's books as at end-March, 2014, a hefty gain of close to 12 times, Last year, 1MDB acknowledged that the per price per square foot was lower than market rates, but it stressed that the transaction was ultimately within the confines of the government's internal transactions. It also said the transaction price was reasonable given 1MDB's obligations to provide infrastructure. For Bandar Malaysia, the latest reported valuation was RM12.35 billion, a benchmark used by 1MDB for the disposal of its 60% stake to China Railway Engineering Corp (M) Sdn Bhd (CREC) and Iskandar Waterfront Holdings Sdn Bhd (IWH) for RM7.41 billion. The deal was announced late last year. Recall that that land was acquired by 1MDB in 2013 from the Ministry of Finance for merely RM400 million. In just less than three years, the value of the 486ha land in Sungai Besi has ballooned by more than 30 times. According to the PAC report, the value of Bandar Malaysia, including the Royal Malaysian Air Force Base, was RM4.29 billion as at March 31, 2014. 1MDB has said the CREC-IWH consortium will assume all obligations under Bandar Malaysia, including the relocation cost of the air force base of RM2.7 billion and a RM2.4 billion Islamic bond. An industry observer said, from a business perspective, 1MDB has done nothing wrong in buying the land cheap. "You buy something very cheap, then you put on some effort to convert the land, naturally the derived value will get an input, then it will get a big gain," he told SunBiz. He added that with planned developments, a piece of land will definitely fetch a higher value. This has not been always the case, however. For example, the Air Hitam land in Penang that 1MDB bought for RM1.38 billion in 2013 has seen a slight drop in value in less than a year, valued at only RM1.11 billion as at end-March, 2014. In another instance, 1MDB's energy assets, although their value stood at RM24.29 billion as at end-March, 2014, which was higher than the acquisition price of RM12.1 billion, were sold to China General Nuclear Power Corp for only RM9.83 billion. Thus, 1MDB is said to have incurred a loss of RM2.27 billion. Also on its list of assets are a RM4.89 billion deposit with Aabar Investments PJS, and available for sale investments in segregated portfolio companies, fund management portfolios and unquoted debt securities amounting to RM13.39 billion. Details on 1MDB's initial investments in the available for sale investments were not immediately available.