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Journal Homepage: -www.journalijar.com
Article DOI:10.21474/IJAR01/15234
DOI URL: http://dx.doi.org/10.21474/IJAR01/15234
RESEARCH ARTICLE
MOHAMED HAJI HASHIM WAQF: LESSONS LEARNT FROM ITS LAND DEVELOPMENT
Marina Abu Bakar1, Sukriah Ismail2, Che Zuina Ismail3 and Noor Asyimah Ramli4
1. Lecturer, Kulliyyah of Shariah & Law, Universiti Islam Antarabangsa Sultan Abdul Halim Mu‟adzam Shah
(UniSHAMS), 09300, Kuala Ketil, Kedah, Malaysia.
2. Lecturer, Kulliyyah of Shariah & Law, Universiti Islam Antarabangsa Sultan Abdul Halim Mu‟adzam Shah
(UniSHAMS), 09300, Kuala Ketil, Kedah, Malaysia.
3. Assoc. Prof. Dr., Academy of Contemporary Islamic Studies (ACIS), UniversitiTeknologi MARA (UiTM),
Terengganu Branch, 23000, Kuala Dungun, Terengganu, Malaysia.
4. Advocate & Solicitor, High Court of Malaya; Sharie Lawyer; Noor Asyimah&Associates, No. 8B, Tingkat 2,
Jalan Todak 3, Pusat Bandar Seberang Jaya, 13700, Prai, Pulau Pinang, Malaysia.
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Manuscript Info Abstract
……………………. ………………………………………………………………
Manuscript History
Received: 18 June 2022
Final Accepted: 22 July 2022
Published: August 2022
Key words:-
Mohamed Haji Hashim Waqf, Penang
Islamic Religious Council (MAINPP),
Penang Waqf, Waqf Land
Development, UDA Waqf, Waqf
Lessons
In Penang, all waqf properties are under the sole trusteeship of the
Penang Islamic Religious Council (MAINPP). To date, Mohamed
Hashim Waqf Land has already been productively developed in
accordance with the waqf giver‟s wishes. However, there are
significant issues and challenges remain in the waqf property
development process of Mohamed Haji Hashim Waqf Land. Hence,
this study was conducted to analyze lessons learnt from Mohamed Haji
Hashim Waqf Land development. This study uses qualitative research
methodology. The data was collected via library research method and
semi-structured interview. Later, the data was analyzed using thematic
and content analysis method. The findings prove that there are several
issues and challenges that arise and need to be addressed by MAINPP
to ensure the development of waqf lands in Penang can be proceeded
without hitches. The results of the study consist of valuable lessons that
can be proposed to MAINPP and the developer in improving the
process of waqf land development so that waqf properties can be
developed optimally and provide profitable returns to the Muslim
community in Penang.
Copy Right, IJAR, 2022,. All rights reserved.
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Introduction:-
Islam places a high value on the act of worship known as waqf. Waqf can be categorized under sadaqah al-Jariah,
which guarantees eternal benefits to the waqf giver. Allah SWT has specifically mentioned about waqf in the Holy
Qur'an, “You will never achieve good (perfect) until you donate some of what you love, and whatever you donate,
then indeed Allah is All-Knowing” (Ali Imran, 92: 3).
Waqf originally came from Arabic terms which means “to withhold” or “to retain” (Ibn Manzur, 1990). While
technically, waqf is to withhold property that can be used without physical depreciation by giving the property to a
consumer for the appropriate use (al-Bugha, 2012). Al-Zuhaily (2002) explains waqf as to withhold property that
still has its substance and can be utilized for charity causes as an act of taqarrub to Allah SWT, where the waqf
Corresponding Author:- Marina Abu Bakar, PhD.
Address:- Lecturer, Kulliyyah of Shariah & Law, Universiti Islam Antarabangsa Sultan Abdul Halim
Mu‟adzam Shah (UniSHAMS), 09300, Kuala Ketil, Kedah, Malaysia.
marinaabubakar@unishams.edu.my
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property is given to specific parties and these parties aren‟t allowed to use it at their discretion (al-Zuhaily, 2002).
Next, Yayasan Waqaf Malaysia defines a waqf as any asset that the waqf giver retains ownership of through any
transaction, inheritance, hibah, or will in addition to maintaining its material resources, for the benefit of the waqf‟s
welfare and the intention for advancement of its spiritual relationship with Allah SWT (YWM, 2022).
Waqf in Penang is governed by Penang Islamic Religious Council (MAINPP) and was divided into two primary
divisions by MAINPP, namely Seberang Perai and Penang Island. The Northeast, Southwest, North Seberang Perai,
Central Seberang Perai and South Seberang Perai are the several districts located in each of these divisions. Figure 1
represents the divisions of each waqf property according to lots and acres. By 2020, it was reported that Penang has
1210 lots or 1260.61 acres waqf properties.
Figure 1:- Penang Waqf Properties by 2020.
Source: MAINPP (2021)
Waqf land development in Penang has undergone a lengthy process and at different times has been impacted by
environmental factors like social and political situations. This is demonstrated by the formation and expansion of
MAINPP as the sole trustee that is in charge of overseeing the development of waqf land in Penang. On 11
November 2019, UDA won the 1st Global Waqf Conference Recognition Awards. This award was obtained by
UDA through UDA Land North which has successfully developed one of the waqf lands, namely Mohamed Haji
Hashim in collaboration with MAINPP. The development, which covers an area of 1.14 acres and contains 68 units
of apartments, has cost a gross development value of RM15.34 million. The development of Mohamed Haji Hashim
Waqf Land in Central Seberang Perai was fully completed in the fourth quarter of 2017 and is the first waqf land
development to receive strata in Malaysia (Prebiu, 2019). However, MAINPP has occasionally run into a number of
issues and challenges while fulfilling the trust to develop waqf properties including Mohamed Haji Hashim Waqf
Land. Therefore, it is necessary to analyze lessons learnt from Mohamed Haji Hashim Waqf Land development.
Besides, the lessons learnt can assist in the future development and implementation processes to become more
efficient and in line with Islamic waqf regulations.
Literature Review:-
Past Researches on Waqf Lands
There have been numerous prior research studies on waqf land undertaken by other researchers. Early study
conducted by Zakaria & Md. Sani (2015), was focusing on the development of waqf land in Penang. Using the
AMOS application, the researchers have created a comprehensive framework for the development of waqf land in
Penang. Later, Johari et al (2019), looked at the usage of al-Tawriq in Malaysia. They contend that the waqf assets
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that have been transformed into low-cost housing developments can produce money to fund the creation of other
waqf projects. The term of al-Tawriq is highlighted in the study as an alternate approach to the issue of waqf
property development fund. Furthermore, Mokhtar (2018) has conducted research on Penang‟s cash waqf
implementation. The results of this study revealed that the quantity of cash waqf funds collected by MAINPP varied
significantly from year to year, with high and low values corresponding to various years. MAINPP has implemented
numerous reforms, such as cash waqf through salary deductions and offering online payment options, to address this
issue. These efforts, meanwhile, did not yield any fruitful results. In order to strengthen the collection of cash waqf
in Penang, the study seeks to uncover the variables that affect Muslims‟ intentions with regard to adopting cash
waqf.
Waqf land-related laws in Malaysia have been studied by Syed Abdul Kader & Mohamad (2019). The results of this
study show that waqf administration in Malaysia has increased, and it now contributes to nearly every area of
economic, social, welfare, Islamic finance, takaful and tax law. By offering inexpensive public housing to
Malaysia‟s B40 households; the bottom 40 percent of household can afford to buy a house according to the median
income in Malaysia. In addition, Abdullah & Meera (2018) have presented an Islamic approach to social finance
research. This study seeks to investigate a new national public housing plan for Malaysia that entails providing long-
term al-Hikr leases for inexpensive, low-cost housing. In parallel, Mat Daud & Mubarak (2019) examined how
socio-economic factors affected the development of waqf assets using MAINPP as their case study. Waqf is one of
the wealth distributions‟ tools that Islam recommends to its people. The findings of this study demonstrate that
MAINPP performs its organization and control functions well.
Meanwhile, the sustainability of waqf property has also been the subject of research by Mat Hassan (2018). The
researcher contends that maintaining and enhancing waqf property as well as creating ongoing waqf advantages
constitute the permanent part of waqf property. In Malaysia, there are still a lot of waqf lands, particularly
unproductive lands, as of right now. The development of waqf property has become unsustainable as a result of this
predicament. The researcher also discovered that waqf managers, or mutawallis, are paying attention to housing
waqf as one of the projects on waqf land that might provide income for waqf lands. This is evident in Penang today,
where MAINPP is aggressively creating housing waqf on waqf property. According to Hashim & Ab Rahman
(2012), MAINPP has used five fundamental techniques to develop waqf properties in an effort to generate income.
However, the utilization of joint venture methods with Government Linked Companies (GLCs) is the only one of
the five approaches stated above that is discussed in this study. The strategic positions and high value of the waqf
lands are two important characteristics that contribute to MAINPP‟s success in developing waqf lands. It is worth
mentioning that large-scale waqf assets can be developed by MAINPP due to its expertise, as well as the developers‟
assistance and cooperation.
Next, Mat Rani (2014) in his study emphasized that waqf land is a significant potential found in religious institutions
in certain state. As such, in addition to having significant economic advantages, it also merits investigation and
development. Its function as a mechanism centered on not only worship and social well-being but also economic
well-being is one of the methods and strategies to enhance general well-being as a whole. Additionally, it must be
created using Shariah principles. In reality, a number of concerns, primarily relating to population, logistical issues,
development fund and end-financing, were found through this research. Yusof et al (2016) have explored new ideas
regarding waqf management based on the model introduced by J.R Galbraith to improve services in MAINPP waqf
management in Penang. This study found that MAINPP is one of the successful organizations for waqf management
in Malaysia. The analysis also revealed that MAINPP possesses waqf assets worth more over RM 800 million, the
most of which are lands situated in key locations like Georgetown. The study‟s findings are translated into
management improvements using the suggested model and helpful recommendations on how to establish and
maintain waqf properties in Penang.
It is important to note that a previous study by Nasution (2002) found that the majority of the Muslim groups living
in Penang had endowed waqf lands in the hope that their descendants or close relatives would continue to manage
them. However, there have been numerous legal disputes between waqf trustees as a result of restrictions such as the
absence of an Islamic administration in urban and colonial areas as well as the conflict between Islamic law on waqf
and British law. Waqf land, which was seen to be cultivating squatter circumstances in the center of the city‟s
settlement as a result of the urbanization process, was taken over by the Local Authority (PBT) at the end of the 19th
century. The British had succeeded in meddling in religious matters and Muslim land management practices with the
cooperation of some Muslim authorities at that time. Additionally, Hashim et al (2013) discovered a number of
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techniques that can be applied to boost the production of waqf assets. Assets owned by the waqf can be leased to
interested parties or utilized for a variety of commercial endeavors, including farming and raising cattle. The waqf
management should look for other options to make the waqf land profitable in circumstances where the
aforementioned strategy is deemed ineffective. In order to maximize the utilization of the waqf land under their
management, waqf trustees should also look into other options. Thus, investing in real estate can be a substitute for
developing waqf land.
Ibrahim (2005) has highlighted the negative effects of the migration process of Malay communities in Penang. He
claims that lower-class Malay groups in Malaysia‟s main cities who don‟t own permanent homes frequently
experience relocation as a result of temporary changes in development. The typical urban residential area, which
was once a village, has been destroyed and replaced, or has evolved into a squatter settlement area that is so
unsightly and awkward in its location within a bustling city. Ibrahim (2005) believed that the removal of the village
status in the city needed to be handled carefully to prevent the squatter settlement issue from spreading throughout
the neighborhood. A current study by Abdullah et al (2020) looked at how waqf property development was
implemented in Penang, particularly in the commercial sector. Waqf properties in Penang that are centrally located
have a higher potential for cash generation than those that are out in the countryside due to their higher valuations.
Compared to leasing land, commercial development can result in a significant return on investment. However,
carrying out this development is not a simple task. They contend that MAINPP must overcome a number of
obstacles and issues in order to accomplish a successful development.
Moreover, a compilation of waqf legislation pertaining to the decisions of the Penang State Fatwa Committee has
been put up by the Penang State Mufti Department in 2019. The management of waqf property by the MAINPP as
the sole trustee of waqf faces numerous challenges, according to the Penang State Mufti Department (2019), which
must be taken into consideration before any development proposal on the property is carried out. This is to make
sure that the development will be carried out properly and achieve the waqf‟s objectives. In addition, Abdullah
(2016) also examined the development of waqf property that MAINPP had carried out in its capacity as trustee for
Seetee Aishah Waqf Land. The two types of approaches used in this study are field research and library research.
The study‟s findings revealed that this land had been successfully developed despite the MAINPP encountering
numerous difficult obstacles.
The Challenges of Developing Waqf Lands in Penang
Waqf property development has taken many different shapes today. Other than, waqf land development often falls
into one of three categories; agricultural, livestock, or building construction (Hashim & Abd Rahman, 2015). In fact,
waqf property developments that employ commercial strategies like housing (terrace homes, apartments), lodging
(hotels, boarding houses), stores (bazaars), and so forth, are the best examples (Hashim & Abd Rahman, 2015).
These methods of implementation have given Muslims‟ economies new vitality and made them more viable. As a
matter fact, Abdullah &Bahari (2019) study, which showed that non-productive waqf land may be developed
utilizing the istibdalapproach via special waqf land, further supported the Hashim & Abd Rahman (2015) study
findings. Both of them are on the view thatistibdal method can ease the burden of waqf managers, who require
substantial funding to oversee and maintain the maintenances of waqf lands. Additionally, research by Mohamed
Noor & Ismail (2016) examined the idea of development in the context of istibdal waqf. According to the study‟s
findings, Selangor‟s local populace has benefited greatly from the idea of waqf development via the istibdalmethod.
Likewise, Mat Hassan (2019) has conducted a thorough analysis of the sustainability of Penang‟s waqf housing
development. There are three essential components regarding the concept of sustainable development of waqf
property. The five guiding principles of the idea of sustainable development of waqf property are just, dependable,
Shariah-compliant, economically sound, and environmental preservation. Adding, commercial waqf property
development that cultivates effectively on waqf land alters the waqf benefits and has the potential to raise the value
of the waqf land itself (Mat Hassan, 2019). The three components must also meet the techniques used to maintain
the development of waqf property; First, the retention of „ayn waqf property. Second, grows productively. Third,
produces ongoing benefits (Bahari& Mat Hassan, 2017). Besides, the focus of Abdullah and Bahari (2019) study is
on the proper approach to development on waqf land from an Islamic standpoint. According to the results of their
research, special waqf land can be utilizing using istibdal method. The United Nations Educational, Scientific and
Cultural Organization (UNESCO) has designated several locations, including various waqf lands in Penang, as
World Heritage Sites. KapitanKeling Waqf Land is one of the examples of a property that can be developed in line
with modernization.
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Concurrently, Abd Rahman (2015) has investigated the re-evaluation of the KapitanKeling Waqf Land development
using the idea of Islamic-Based Development (PBI) and discovered that this land development didn‟t adhere to the
development model advised by Islam. Thus, in order to ensure that the management and administration of
KapitanKeling Waqf Land are on track with Islam, its development needs to be reexamined in terms of philosophy,
worldview, and epistemology. Apart from, a number of researchers such as Hashim et al (2014), have explored the
use of the BOT (Built, Operate, Transfer) approach by MAINPP in developing the waqf land in Majoodsaw in their
research. By using this BOT method, a 21-storey office structure has been successfully constructed. This building,
commonly known as the Penang UMNO Tower, is situated in Georgetown, Penang. MAINPP has earned income
from Majoodsaw Waqf Land and achieved double profits using the same development methodology. On other
housing waqf lands, MAINPP has been putting the redevelopment and conservation into practice. The waqf land of
the Kadershah Apartments, KapitanKeling, AlimsahWaley and LebuhAcheh were included in this development and
conservation.
According to recent research by Ismail et al (2021), MAINPP encountered a number of difficulties when developing
SeeteeAisah Waqf Land. The Local Authority (PBT), end-financing, governance and land status were among the
major issues. The inability to find strategic partners for waqf partnerships, the difficulty of regaining the trust and
confidence of the Muslim community in Penang, and future challenges, such as end-financing issues caused by lease
issues on the waqf properties, are also highlighted as side challenges. The researchers emphasized that in order to
accomplish large-scale development in the future, all governmental entities, whether at the state or federal level,
strategic smart partnerships, and financial institutions must work together with MAINPP to mobilize energy. As
Penang‟s real estate market is expanding annually, large-scale development can be carried out positively.
Methodology:-
Research Design
Research design consists of research inquiry strategies that help researchers find answers to research questions. As
for this, the researchers can achieve the research objectives that have been designed before (David & Sutton, 2004;
Denzin & Lincoln, 2011). There are four factors that influence the selection of a study design, namely study
objective, research problem, researcher's experience and the targeted group (Neuman, 2015; Creswell & Creswell
2018). This study uses a qualitative approach via library methods and in-depth semi-structured interviews which
involves data from primary and secondary sources. Qualitative design was chosen because the study was intended to
analyze lessons learnt from Mohamed Haji Hashim Waqf Land development. A case study of waqf land that has
been selected is Mohamed Haji Hashim Waqf Land. After various data were obtained from the interviews and
library researches, all of these data were analyzed in more depth to generalize the findings. Next, the datum that
have been analyzed, were included in the researchers‟ study, as the research findings.
Data Collection Method
The data collection process in this study involves two sources, namely primary sources and secondary sources.
Qualitative data obtained from primary and secondary sources exist in large numbers and are complex in nature
(Lebar, 2009). Primary data is data collected by the researchers directly from primary sources. Lim (2007) suggested
that the collection of primary data is done by using the interview method. Primary data in this study was collected
through in-depth semi-structured interviews with five informants. According to Yin (2018), the interview method is
the best technique in collecting data for studies that use a case study design. Therefore, a semi-structured interview
was conducted with five informants as in Table 1 to obtain information related to the case study involving Mohamed
Haji Hashim Waqf Land.
Table 1:- List of Informants.
No.
List of
Informants
Positions
Date
1.
Informant 1
Head of Property Development & Waqf Unit, MAINPP
24 May 2021
2.
Informant 2
Chief Executive Officer, WakafPulau Pinang Sdn. Bhd (WPPSB)
27 May 2021
3.
Informant 3
Vice President II, UDA Holdings Berhad
2 June 2021
4.
Informant 4
Officer, Property Development & Waqf, MAINPP
7 June 2021
5.
Informant 5
Legal Officer, MAINPP
14 June 2021
Source: Researchers‟ Own (2021)
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All of the informants were selected using a purposive sampling approach as suggested by Patton (2002). Besides,
this approach is suitable to be applied in this study when the informants involved came from various backgrounds
and suitable work fields and have extensive experiences with the phenomenon being studied by the researchers.
Meanwhile, secondary data involves existing data that has been collected through primary sources and processed by
past researchers (David & Sutton, 2004). In this study, the researchers collected data from published materials and
internet access through databases. The data involved is via books, theses, dissertations, research reports, papers,
proceedings and articles through workshops, seminars, conferences and others.
Data Analysis Method
Primary data analysis in this study involves data obtained from in-depth semi-structured interviews with informants.
These data were analyzed using thematic approach. The thematic analysis process involves the following processes
and phases as in Table 2:
Table 2:- The Thematic Analysis Process.
Process
Phase
Description
Transcription
Identify and familiarize
with data
Read the details and familiarize with the type of
data and its content.
Check any errors in the recording of data or
Test data credibility
Coding
Identify codes
Identify appropriate elements in the data
Record all potential related details
Maintain a history map of every move
Report key codes that can be found
Categorizing
Find the themes in data
Finalize domain and themes
Categorization of data
Check that each theme has a particular domain.
Theme
Review each theme
Analyzing the appropriate theme for its
authenticity.
Search for missing data
Document Analysis
Document analysis
Analyze and draw inferences from the related data
Electronically/manually, paper details
Make sure that the relevant information is
significant/answer research question
Source: Researchers‟ Own (2021)
Therewithal, secondary data analysis in this study involves data in the form of writing or documentation and was
obtained through library methods and database studies. These secondary data were analyzed using content analysis
method. This process involves researchers examining materials related to research issues, namely the issues,
challenges and lessons learnt from Mohamed Haji Hashim Waqf Land development by MAINPP and UDA
Holdings Berhad. All these processes are carried out systematically and repeatedly by focusing on several aspects
such as concepts, themes, items and others related to the study phenomenon (Berelsen, 1952).
Results &Discussion:-
Background of Mohamed Haji Hashim Waqf Land
In 1904, this waqf land was endowed by a waqf giver named Mohamed Haji Hashim. This waqf land covers an area
of 1,148 acres (50,000 square feet) and is currently located in a strategic area in the city center of Seberang Jaya next
to Seberang Jaya Hospital and AEON Big Business Complex. Originally, this waqf land was an agricultural land,
bushy and only filled with coconut trees. As the yield of coconut trees on the waqf land is less lucrative, the waqf
yield failed to be distributed for the purpose of Muslims as intended by the waqf giver, Mohamed Haji Hashim.
Apart from that, the crop of coconut trees also bites the dust to cover the annual land tax payment. However,
MAINPP is of the view that this waqf land has great potential and can generate remunerative revenue if it‟s
developed based on its value of RM2.9 million. Therefore, in order to ensure the waqf continuity, MAINPP strives
to develop this waqf land so that the waqf returns obtained can continue to grow and provide a continuous
contribution to Muslims. Thus, this matter also coincides with what is written in the deed of waqf Mohamed Haji
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Hashim. It was stated that the waqf proceeds should be used for purposes that benefit Muslims. Hence, there are no
specific conditions specified by the waqf giver through this deed.
MAINPP has collaborated with developer, UDA Holdings Berhad to develop this land. This development is also
known as Seberang Jaya Legacy or SJ Legacy in conjunction with the name of the housing projects developed in
collaboration with developer UDA. With assets worth RM 22 million for the development process, the rental income
on this waqf land can generate an income of RM15,000 per month. The total cost of the development of this waqf
land is RM17 million, consists of 2 blocks of 68 units of medium cost apartments that have been developed with
several public facilities for each residential unit such as 2 units of parking, multipurpose hall, swimming pool, surau
and many others. This apartment is located at Lot 192 Mukim 1, Seberang Perai Tengah (Seberang Jaya). Aside
from, this development project has given a return of RM 4 million to the developer, UDA Holdings Berhad.
Meanwhile, MAINPP received a return of RM 3.3 million, which consists of 9 residential units. The project was
completed on 26 September 2018, while the apartment was first occupied in October 2018. Figure 2 is the
architect‟s sketch illustration of Mohamed Haji Hashim‟s Waqf Land development and Figure 3, represents the
illustration of Mohamed Haji Hashim‟s Waqf Land development. While, Figure 4 is a summary of Mohamed Haji
Hashim‟s Waqf Land development project.
Figure 2:- Architect‟s Sketch Illustration of Mohamed Haji Hashim Waqf Land Development.
Source: UDA Holdings Berhad (2021).
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Figure 3:- Architect‟s Illustration of Mohamed Haji Hashim Waqf Land Development.
Source: UDA Holdings Berhad (2021).
Figure 4:- Project Summary of Mohamed Haji Hashim Waqf Land Development.
Source: UDA Holdings Berhad (2021).
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The financing method of Mohamed Haji Hashim Waqf Land development involves sukuk al-Wakalah through
musharakahcontract as shown in Figure 5. Sukuk al-Wakalah is a power distribution contract by one party to another
for a specific project or activity to be managed by an agent (representative) in the interest of the sukuk holder.
Through this method of financing, Bank Muamalat is involved as a fund manager who will manage the investment.
Bank Muamalat will accept investments from public investors who invest in the bank. These investors invest for the
purpose of making profits and the bank will invest through the development of this waqf property. In addition, the
bank will also finance the entire cost of waqf land development. MAINPP is the owner of this waqf land, while the
developer, UDA, is the implementing agent. UDA is responsible for appointing and negotiating with the contractor
who developed the waqf land. MAINPP as the landlord will receive a return from the development that is not less
than the current value of the land. Meanwhile, the profit of the project will be divided according to ratio of 60:40,
i.e., 60% will belong to Bank Muamalat and given as distribution to investors, while the remaining 40% will belong
to the developer, UDA. MAINPP received returns in the form of apartment units, namely 9 residential units worth
RM 3.3 million, which is also equivalent to the value of the land. These 9 residential units will be rented by
MAINPP to generate revenue and fulfill the wishes of the waqf giver as stated in the waqf deed.
Figure 5:- Sukuk al-Wakalah.
Source: UDA Holdings Berhad (2021).
While, Figure 6 is a picture of a waqf apartment that has been completed and inhabited. There are several
advantages of buying a Mohamed Haji Hashim Waqf apartment house including low payment of deposit, situated in
a strategic area as it‟s located in an urban area, low density where the apartment units built aren‟t so crowded, the
house is readily built and can be occupied during the purchase process.
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Figure 6:- Outcome Projects of Mohamed Haji Hashim Waqf Land Development.
Source: UDA Holdings Berhad (2021).
Issues and Challenges of Mohamed Haji Hashim Waqf Land Development
Unlike other waqf lands in Penang, the Mohamed Haji Hashim Waqf Land didn‟t face any encroachment or
squatters‟ problems. Most of the other waqf lands under the supervision of MAINPP have problems with
encroachments, illegal settlements, as well as the unregistered occupants under MAINPP. This causes MAINPP to
struggle in managing their relocation if development is to be done on waqf land as planned. However, there are
several issues and challenges in developing Mohamed Haji Hashim Waqf Land that can be pondered as follow:
Development Fund Issues
The waqf land site didn‟t experience any squatting or encroachment problems. Seeing that, this waqf land was
originally made up of swamps and couldn‟t generate income for MAINPP. Nevertheless, the waqf land development
process still has to face challenges on the part of MAINPP to obtain funds for development purposes. MAINPP has
tried to establish cooperation through a joint venture with the developer, UDA, to overcome the problem of funds in
the development of this waqf land. Even so, before the development process was carried out, this waqf land was an
agricultural land planted with coconut trees. MAINPP has used the proceeds to pay taxes. Since it is not inhabited,
MAINPP didn‟t face obstacles to develop the waqf land according to the waqf deed. No proposal was offered to the
residents and MAINPP has used the revenue to cover the costs related to the land before and after the development
process.
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Waqf Land Status
The waqf land is located in the institutional zone. This causes the waqf land to be used only for construction
purposes. The developer, UDA, faced several challenges in order to change the zone status and conditions to a
development zone that can be used for residential and commercial purposes.
Legal Constraints
Legal constraints are among the issues synonymous with waqf real estate development. The reason is because a
fatwa on the part of MAINPP has decided that waqf buildings built on waqf land can‟t be transferred, but instead are
owned on a lease for 99 years through the provision found in the National Land Code 1965 (NLC), Form 15A. From
a point of view, this caused MAINPP to become the sole management body responsible for managing and
maintaining the buildings during the lease period, for 99 years. MAINPP also remains as the landlord and owner of
the building through the parcels of the building. Apart from NLC, MAINPP has to comply with the Strata Title Act
1985 because the development on this waqf land involves high-rise buildings (strata). According to this act, after the
completion of the development process, each unit will be divided into lots through the Share Unit Formula
Certificate (SiFUS). These plots are owned by MAINPP as a lessee for 99 years.
In actual fact, there is no change of ownership involved in the development of this waqf land. Therefore, the
absolute ownership of the residential units is still owned by MAINPP. Whereas, on the other hand, the occupants of
the building will be given a lease for 99 years. Therefore, all taxes such as door and land taxes have to be borne by
MAINPP during the lease period. Along with, other facilities such as open spaces, multi-purpose halls, roads, TNB
sub-stations, Indak Water Konsortium (IWK) sewage plants, playgrounds and drains also need to be maintained by
MAINPP throughout the 99-year period.
End-Financing
As MAINPP has to comply with the fatwa issued in relation to waqf land, then the waqf land developed can‟t be
transferred as stated in NLC, Form 14A. Constraints to comply with this fatwa have resulted in the majority of banks
not being able to offer financing that comply with the conditions except for a few banks such as Ar-Rajhi Bank,
Bank Islam Malaysia Berhad (BIMB) and Bank Muamalat Malaysia. The transfer of ownership is allowed only
through a lease for 99 years only, that is through NLC, Form 15A.
Local Authority (PBT) Guidelines
The Penang State Fatwa Committee has issued a fatwa on the prohibition of transferred land as per NLC, Form 14A.
Therefore, the development of Mohamed Haji Hashim Waqf Land isn‟t exempted from complying with this fatwa.
However, the challenge arises when there are guidelines issued by the Local Authority (PBT) aren‟t in line with the
fatwa. Due to the fact that, all the conditions set by the department must be complied with to obtain Project Planning
Approval. Among the conditions include roads that need to be handed over to JabatanKerja Raya (JKR), electricity
sub-stations to Tenaga Nasional Berhad (TNB), multipurpose halls, open spaces, drains, landscapes and playgrounds
to the Municipal Council and sewage plants to Indah Water Konsortium (IWK). Accordingly, all of these affairs
must be submitted through the process of exchange of ownership, namely NLC, Form 14A for maintenance
purposes.
Development Procedures by the Ministry of Housing and Local Government (KPKT)
Among the other challenges faced by MAINPP is to comply with development procedures by the Ministry of
Housing and Local Government (KPKT). The commercial housing development in Malaysia is subjected to
development procedures set by KPKT. The challenge lies in the process of obtaining a Advertising Permit and
Developer License (APDL). Advertising licenses and permits are required to sell residential units to buyers.
However, the problem arises when this residence needs to be converted in the process of sale through NCL, Form
14A and the process of changing the ownership through the lease of NLC, Form 15A.
Lesson Learnt from Mohamed Haji Hashim Waqf Land Development
Some of the lessons that can be learnt to overcome the issues and challenges in the development of Mohamed Haji
Hashim Waqf Land include:
Improving Land Management and Administration Aspects by MAINPP
It is proposed that MAINPP improve the land management and administration to overcome various challenges that
arise related to waqf properties. Expertise in the areas of development management of waqf land organization is
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highly desirable to be polished. In addition, waqf also involves various other cross-fields that require different joint
methods and strategies in order to succeed in a development project. The crucial fields include shariah, economics,
accounting, finance, asset and project management, facilities management and maintenance, marketing, law and
others.
Due to the insufficient number of officees, MAINPP can polish the knowledge and skills of the existing officers via
in-house training with experts in the field or by professional training courses related to property development from
time to time according to the departmental needs. Besides, MAINPP can also hold regular consultation sessions with
experts involved in the property development phase. This consultation process can help MAINPP to learn innovative
methods in developing waqf properties according to the current needs of the market. Moreover, it can also aid
MAINPP to build a more dynamic development strategy, while trying to find solutions for existing challenges.
Creating a Waqf Land Database
Databases are essential to manage and develop waqf land effectively. As a matter fact, this is also in line with the
concept of waqf property itself which waqf should be permanent and sustainable so that it can continues to be
enjoyed by the waqf beneficiaries. A Geographic Information System (GIS) needs to be worked on to be established
at the MAINPP level. The GIS technology able to process and integrate various information related to waqf
properties such as policy maps, modeling and predicting a situation that will occur at the geographical location of
the waqf land as a result of the integration of relevant information.
Coordinating Waqf Legislation
Coordination of legislation related to waqf can be done from time to time. Although this matter took a long period,
but amendments after amendments in the existing waqf legislation can further smoother the process of managing
waqf properties in Penang. In addition, negotiations with the developer regarding rigid procedures can facilitate the
development process in the future.
Measuring Waqf Property Development Investment
MAINPP is recommended to measure the existing waqf property development investment. Without proper
measurement, it is difficult for MAINPP to generate profits from the investments that have been made. Among the
traditional investment measurement methods are Total Return Method, Payback Method, Average Profit Method,
Peak Profit Method, Rate of Return on Income and Rate of Return on Cost. Meanwhile, modern investment
measurement methods include Internal Rate of Return (IRR), Net Present Value (NPV), Profitability Index, Money-
Weighted Rate of Return, Time-Weighted Rate of Return and Rate of Return Investment.
Conclusion:-
Consequently, it can be concluded that there are various issues and challenges related to the development of waqf
property in Penang, especially those involving Mohamed Haji Hashim Waqf Land. In the effort to develop this waqf
land, several issues and challenges have been identified such as meeting the guidelines of the Local Authority
(PBT), the status of waqf land, development procedures of the Ministry of Housing and Local Government (KPKT),
development fund issues, constraints in the legal aspects and end-financing. Some lessons that can be learnt include
improving land management and administration aspects by MAINPP, creating a waqf land database, coordinating
waqf legislation and measuring waqf property development investment. It is hoped that these listed lessons can be
grasped by the parties involved in the development of waqf land in Penang. For further studies, among the areas that
can be explored comprise of studies on waqf property developers, waqf property development financing
mechanisms, waqf property legislation in Penang and waqf property investment returns using various traditional and
modern investment measurement methods. Future studies may also use larger sample sizes, longitudinal designs or
even a multi-method approach to improve findings on this subject.
Acknowledgement:-
This research was funded by Universiti Islam Antarabangsa Sultan Abdul Halim Mu‟adzam Shah (UniSHAMS)
under the Short-Term Grant Phase 5/2020 (UniSHAMS/STGRMU/2020). The researchers would like to thank
Penang Islamic Religious Council (MAINPP) and UDA Waqf Holding Berhad officers for their unequivocal
cooperation throughout this research.
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