Archive for the ‘Penang Housing Development’ Category

New Condominium Developments in Bukit Mertajam

Sunday, February 22nd, 2015

As we usher the “Goat Year” of Chinese new Year 2015, the Penang Property sector is entering a challenging year amid the impending implementation of Goods and Service Tax on 1/4/2015.

Whilst high rise residential schemes continue to dominate bulk of the on-going developments in Penang Island, one inevitable development trend that is emerging in Central Seberang Perai is the mushrooming of new condominium schemes and the emergence of integrated developments.

Penang Property Skyline

Unlike Penang Island, conventional landed housing schemes of single and double storey terraced houses used to dominate the residential sub-sector of Seberang Perai and the preferred housing types by the mainland Penang purchasers. But this trend is poised to change in the coming years as new housing supply will be coming from high rise condominiums schemes. As land costs for development lands have gone up substantially in the last few years and coupled with depleting land banks available for housing developments, building conventional landed homes at affordable price range are no longer feasible for developers which seek to maximize profits from their projects.

The property sector in central Seberang Perai will see an influx of new condominiums and apartments into the housing market over the next 2-3 years.

Izrin & Tan Properties Sdn Bhd www.intproperties.com conducted a research on the supply of new high rise housing schemes currently being built, launched as well as planned projects in  Bukit Mertajam Area.  The supply of new condominiums/apartments in Bukit Mertajam Area is estimated to be 5,543 units from a total of 24 housing projects. Below is a table showing the new condominium schemes in Bukit Mertajam Area.

New Condominium supply in Bukit Mertajam

New Condominium supply in Bukit Mertajam

Bukit Mertajam Area Map

Bukit Mertajam Area Map

Some general observations on the trend of new condominium developments in Bukit Mertajam Area:-

a) In terms of area distribution, Bukit Mertajam Town - Jalan Song Ban Kheng  Area  contributes 32% of  the  total units  from 11 schemes,  followed by  Bukit Mertajam  South-Western  Corridor, namely Bukit Tengah -Bukit Minyak - Juru Area  with  27% of the total units from 5 schemes and  Bukit Mertajam western corridor, namely Jalan Permatang Rawa-Jalan Baru area, with 22.3 %  of the total units from 4 schemes.

b) About 58% of the new schemes in Bukit Mertajam Area are single block development with less than 150 units each as developers prefer to opt for exemption of 30% low cost provision for their schemes. Under the state housing rulings, it is mandatory for developers to build 30%  low cost units  for new developments exceeding 150 units. Some of these developers are first time builder venturing into high rise stratified housing schemes.

c) In terms of sales price, the average per square foot generally ranges from RM240 psf up to RM350 psf for unfurnished units. Sales Price for units that comes with renovation package or kitchen cabinet or additional home improvement fittings range from  RM365-RM450 psf.

d) In terms of Floor areas, the unit sizes range from 1,000 sq ft to 1,300 sq ft for a 3 bedroom/2 bath unit. There are also bigger units with floor size of 1,300 sq ft to 1,500 sq ft for 4 bedroom  type.

e)Car Parks- most schemes are offering 2 car parks as one car park is considered to be inadequate.

f)The ratio for the number of residential suites (with commercial title) vis-à-vis residential titled units is projected to increase as developers seek to maximize land usage ie. mixed usage integrated developments instead of residential schemes.

g)Service charges at RM0.15 –RM0.19 psf per month for condominiums whilst the rate for service charges of residential suites is generally higher, at RM0.25 psf per month. For purchasers intending to buy residential suites(with commercial title),  please note that  the rates for assessment, utility such as water, electricity and Indah Water for suites are based on commercial rates and thus higher than the residential-titled condominium units.

As more supply of new condominium units entering the market, there will be increased  competition for housing developers to price their units competitively in order to boost their sales take up and this would provide more choices for discerning buyers to bargain hunt and choose their homes according to their budget requirements, loan eligibility, locational preferences, security and facilities, tenure, building design, floor layout and size etc.

The changing trend and living lifestyle of young working population will propel the demand for gated and guarded stratified housing units in Bukit Mertajam Area. According to the draft local plan prepared by MPSP, the population of Central Seberang Perai in year 2015 is estimated to be 430,100 and it is projected to increase to 467,800 in year 2020.

For enquires on sales and rental of Penang Properties, email to tan at intproperties dot com or call +604-6588333.

The Development of Batu Kawan and its land price trends

Monday, March 3rd, 2014

Batu Kawan is on the national attention following the official opening of the Second Penang Bridge by the Malaysian Prime Minister on 1st March 2014. It is officially known as Tuanku Abdul Halim Mu’adzam Shah Bridge.blog.intproperties.com have gathered relevant information and researched the chronological events on the development of Batu Kawan to track its past pricing trends of land transactions from the time Batu Kawan Island was acquired to the present time of the completion and opening of Second Penang Bridge.(Map of Second Penang Bridge).

second-penang-bridge-011

second-penang-bridge-011

Background Information

Batu Kawan used to be an oil palm estate previously owned by Batu Kawan Berhad (BKB). On 8th February 1991, the Penang state government has gazetted Batu Kawan Estate under section 8 of the land acquisition act 1960.

In 1992, the entire 5,260 acre Batu Kawan was acquired by Penang State Government through the Land Office Administrator of South Seberang Perai District for a sum of RM53,197,974 or RM8,167 per acre awarded as compensation.

BKB filed the case to the Penang High Court and the judge reviewed the land acquisition and increased the award of compensation to RM15,000.00 per acre (RM15,000 X 5,260 acres = RM78,900,000.00) on 9th October 1995.

Not satisfied with the compensation, BKB pursued the matter to the Court of Appeal but was dismissed on 22th Sept 1997.

Subsequently, BKB took the matter up to the Federal Court seeking higher compensation of RM40,000 per acre but was dismissed by Federal Court on 11th September 2001. BKB exhausted all the legal means which took them 9 years and finally settled with the compensation of RM15,000.00 per acre(Analysed to RM0.34 psf). The Federal Court judge held that the revised compensation of RM15,000.00 as at that time in 1992 is the “Adequate compensation” on the premise that the land is an agricultural estate land with remote potentiality for any development.

Past Events and Transactions

In Feb 1996, BKB set up a joint venture vehicle with a 60%-owned joint venture company, Padova Corporation Sdn Bhd (“Padova”), with the Penang Development Corporation (“PDC”) whereby Padova has entered into a Land Purchase Agreement with the PDC.

Under this Agreement, Padova was to purchase from PDC 740 acres of former estate land on Batu Kawan Island for a sum of RM50 million for property development(analysed to RM1.55 psf). The land was part of the Company’s Batu Kawan Estate, which was compulsorily acquired by the State Government in 1992 and a sum of RM40 million has been paid to PDC under the Agreement. However, due to economic downturn, the plans for property development in the area were reviewed while the Land Purchase Agreement has been terminated.

On 9th May 2002, Abad Naluri Sdn Bhd (ANSB) submitted tender for Penang Turf Club’s relocation and sale of Batu Gantung land. ANSB proposed to build a new race-course for the Penang Turf Club at a 250-acre site at Batu Kawan. On 25th November 2002 – Turf Club EGM approved sale of Turf Club land in Batu Gantung and proposed acquisition of Batu Kawan site for relocation of Penang Turf Club.

On 16th Jan 2004 – PDC entered into a Principle agreement to sell several parcels of land in Batu Kawan, totaling 750 acres to ANSB. The development was planned in six different phases, each divided into Parcels 1, 2A, 2B 3A, 3B and 4 respectively of which mixed development projects were planned on Parcels 1, 2A, 2B 3A, and 3B measuring 450 acres in total. The development of Parcel 4 was confined to the development of a Penang International Equesterian Centre (PIEC) measuring approximately 300 acres. The purchase consideration for Parcel 4 was reported as RM46 million (analysed to RM3.52 psf).

On 8th March 2008, The DAP-led Pakatan Rakyat took over the Penang State Government administration.

In September 2008, CM Lim Guan Eng and 52-member delegation went to Korea for its first oversea trade investment mission. After the trip, it was widely reported that an MOU between PDC and Korean Group DK ENC has been signed to build a US$ 100 million (RM350 million)golf course in Batu Kawan. However, the deal fizzled out after a memorandum of understanding (MoU)on the project,signed between PDC and South Korean-based DK ENC Company Ltd lapsed.

batu kawan golf course

batu kawan golf course

In year 2009/2010, land acquisition process began on private lands in the Batu Kawan locality affected by the Second Penang Bridge alignment and road linkages to North South Highway and were awarded compensation at a rate of RM8-10 psf.

On 5th April 2011, CM Lim Guan Eng announced the sale of Batu Kawan Land TO ABAD NALURI SDN BHD(ANSB) after a re-negotiation process with ANSB since 2008 to proceed with the development of the remaining parcels since the S&P Agreements for Parcels 2B, 3A and 3B were yet to be signed. After serious negotiations and discussions between both parties, a decision was finally made and agreed upon by both parties in early 2011.

It was reported that the change in the development of Parcel 4 from the PIEC to the proposed mixed development has benefited PDC by enhancing the value of the land from RM3.05 psf to RM4.77 psf amounting to an increased value of RM22,500,000.00.(Approximately 56% increase in value of the land)- Click here for more info.

On 27th June 2011, CM Lim Guan Eng held a press conference and announced that an industrial park catering for SME with 150 acres will be established at the Batu Kawan Industrial Park(1,600 acres) and 67 acres acres for SMEs opened for sale as backbone for solar and renewable energy industries. The current sales price of SME industrial land in Batu Kawan Industrial Park is priced at RM30 psf.

batu kawan industrial park

batu kawan industrial park

On 23rd August 2011, CM Lim Guan Eng unveiled that PDC has allocated 200 acre site in Batu Kawan for the proposed Mega housing project of which at least 7,300 affordable housing units will be built over a period of 5-7 years at a density of 55 units per-acre.

mega housing at batu kawan

mega housing at batu kawan

On 16th February 2012-Ground breaking ceremony for HDB designed affordable homes was held at Bandar Cassia, Batu Kawan- Video.

On 29th February 2012, a signing ceremony was held between Robert Bosch with PDC for the purchase of a parcel of industrial land for RM58 million. 20% of the purchase price has been paid in December 2011. The land is estimated to be 35.2 or 87 acres(Analysed to RM15.30 psf).

In September 2012, Equine Capital Bhd, the controlling company of ANSB, changed its name to Global Oriental(GOB). GOB still has a remaining 350 acres of leasehold land in Bandar Cassia, Batu Kawan.

On 10th October 2012, Malton Berhad announced that Silver Setup Sdn Bhd (”SSSB”), a wholly-owned subsidiary of Malton, had entered into a Joint Development Agreement (“JDA”) with Batu Kawan Development Sdn Bhd (formerly known as Abad Naluri Sdn Bhd) (”BKDSB”) for the proposed joint development of a piece of land situated at Batu Kawan, Mukim 13, Seberang Perai Selatan, Pulau Pinang (“Land”), measuring approximately 300 acres (“Joint Venture”).

The proposed development under the JDA is expected to comprise mixed commercial and residential development (“Proposed Development”). Based on the preliminary plans, the gross development value of the Proposed Development is estimated to be RM3.8 billion.

The Proposed Development is expected to be carried out and completed in phases over 10 years from the date of issuance of the title of the Land, subject to extension as may be approved by the PDC.

Details of the Joint Venture Entitlements under the Proposed Development :-

BKDSB’s entitlement under the JDA is 18% of the Gross Development Value of the Proposed Development, subject to not less than RM300 million, which represents the minimum return expected by BKDSB from the Joint Venture. Whilst SSSB shall be entitled to the remaining 82% of the Gross Development Value of the Proposed Development. Under the JDA, SSSB is solely responsible to meet the costs of the Proposed Development. Upon signing of the JDA, SSSB has paid a sum of RM20 million as deposit to BKDSB as part of BKDSB’s entitlement under the JDA (“Deposit”).

On 28th March 2013, after slightly more than a year, Media reported that Bosch Solar Energy Malaysia Sdn Bhd has decided to shelve its plan to invest RM2.2 billion in a new mono-crystalline solar cell plant at Batu Kawan Industrial Park although a sales and purchase agreement had been signed between Bosch and PDC in December 2011 for a 35.2ha of land in Batu Kawan to build the plant, citing circumstances did not allow Bosch to proceed with the project.More on Bosch pull out.


In August 2013, PDC called for a request for proposal (RFP) for an international theme park and golf resort (with a minimum 18 holes). The RFP is for the purchase and lease of a total 685 acres of land – 215 acres for the theme park (west of Batu Kawan) and 470 acres for the golf resort (north of Batu Kawan). Both projects are required to be completed within four years from the date of agreement. The entire development must be fully completed in 10 years. No new announcement on the outcome of this RFP yet.

On 12th October 2013, PDC signed a purchase and development agreement for the construction of a premium retail outlet in Bandar Cassia,Batu Kawan. The agreement, signed between PDC and developer PE Land Sdn Bhd, will see the nation’s second premium outlet after the Johor Premium Outlet. The premium outlet, costing about RM200mil, will be built on a plot of 16ha (39.54 acres) land that will also include a 300-room international-class hotel, cafes and food and beverage outlets, a landscaped garden as well as residential units. It was reported that the Payment for the land premium of RM65.34mil would be within three months.(Analysed to RM37.94 psf).

On 10th January 2014 – CM Lim Guan Eng announced IKEA’s Entry Into Batu Kawan with the sale of 245 acres of land for the purpose of development of an integrated shopping mall, anchored by an IKEA store to be developed by Ikano Pte Ltd, and mixed development of offices and residences to be developed jointly by Aspen-Ikano (a joint venture company to be formed by Aspen Vision Land Sdn Bhd and Ikano Pte Ltd).  The 245 acres development in Batu Kawan will include: 30 acres for the development of IKEA Store and phase 1 of the Shopping Mall 45 acres for the development of phase 2 of the Shopping Mall; and 170 acres for mixed development purposes (Remaining Parcels) The total land cost for the project is RM 483,951,600 and payment is to be made within 60 months from the date of Agreement. A RM 5 million non-refundable deposit has also being paid to PDC.

Off all the land dealings in Batu Kawan, this is considered as the landmark transaction of year 2014 which analysed to RM45.34 psf with payment terms of up to 5 years.

The last one year also witnessed several big players joining the bandwagon of acquiring lands in southern Seberang Perai in anticipation of the improved infrastructure networks with enhanced accessibility following the completion of Second Penang Bridge. Several reported land acquisition by established developers are :-

MAH Sing Group Bhd bought about 76.38 acres of freehold land in Jawi, Southern mainland Penang for RM42.59 million It was reported that the land was acquired at RM12.80 psf in December 2013 with payment terms within 18 months.

Another developer , Tambun Indah (TILB) acquired additional 21 acres freehold land at Pearl City of Bandar Tasek Mutiara.This came after the acquisition of a 24.1 acre land parcel also in the township a month earlier.The purchase consideration of MR12.7m translates into a land cost of MR14.00 psf, similar to the earlier transaction. Tambun Indah has an accumulated land bank of about 550 acres of Pearl City of Bandar Tasek Mutiara

IJM Land has also acquired 70 acres of land in Jawi, Southern mainland Penang for RM56 million (Analysed to RM18.50 psf ) in July 2013.

According to RHB Research, EcoWorld also bought about 60 acres of land located at the junction of Jalan Paboi and the old Simpang Ampat federal route, near Simpang Ampat, Southern Seberang Perai at over RM30 psf.

After a span of 22 years, Batu Kawan is poised for higher intensity of development with the recent opening of the Second Penang Bridge. There is no doubt that the construction of RM4.5 Bil Second Penang Bridge since 2008 have accelerated the development of Batu Kawan as evidenced by increased investments and land transactions over the past one year. Improved road networks and accessibility has significant impact on its land usability.Its zoning use from that of pure agricultural land in 1990’s has gradually maturing into lands with potential and suitable for housing and industrial use and likely to scale up to higher economic land usage such as commercial and mixed development township. So as its land prices which have surged significantly in recent years in tandem with the change of land usability, zoning and enhanced accessibility.

For more information and advisory on Penang property matters, please visit our website at www.intproperties.com or email to tan@intproperties dot com.

Updates :

On 25th March 2014, Property developer Paramount Corp Bhd (PCB) signed an agreement with PDC to purchase 12.14ha ( about 30 acres)  of freehold land in Batu Kawan for a total of RM65.56 million to develop a university metropolis. It was reported the land cost for the 10 acres of land for education use ie. for development of KDU University College is RM40.50 psf whilst the land cost for the remaining 20 acres earmarked for integrated development is RM55.00 psf.

Under the agreement, PCB is required to commence and complete the development of the education component within 5 years whilst the integrated development is targeted for completion within 10 years from the agreement date.

4 Market indicators on Penang Property Sector 2010

Sunday, September 5th, 2010

1. More new property launches - More housing projects are being slated for launching in the second half of this year by established developers in Penang as there is growing optimism amongst housing developers and market players on the recovery of domestic economic and improving market outlook on the property sector. Read more at Penang gears up for more property launches.

2. Property transactions on the rise -According to NAPIC’s press release, there is an increase of 16% in terms of number of property transaction in 1st Quarter 2010 compared to the corresponding quarter in year 2009 whilst the total transaction values surged significantly, almost 49% from RM16.92bil to RM25.5bil. It is projected that the rise on the property transactions and total values are likely to continue for the forthcoming quarters. The overall property market performance this year is expected to be much better than year 2009 which have been marred by the world financial crisis.

3. Rebound in market demand -The rebound in market demand experienced by the Penang Property sector in the first half of this year is mainly attributable to the pent-up demand after a period of subdue market activities brought about by the impact of the world financial crisis.

Recent reports of higher take up and improving sales performances experienced by Penang’s established housing developers indicates that the market demand has indeed picked up and the demand trend is likely to remain firm in the short term as property investors are flocking back into the property market in anticipation of buoyant economic outlook as well as further price increase following the recent government’s move to implement gradual removal of subsidy on energy and raw materials.

Another factor that could fuel the buoyancy of the property market is the recent strong performance of the Bursa Malaysia KL Composite Index which have recovered over 1,400 points. The stock market has made substantial gains this year and this could boost the property sector.

A local research fund house predicted that Malaysia’s property sector is set to see its biggest residential boom in a decade. The property sector was already entering the early stage of a property “super cycle”. More at OSK bets on Malaysian Property boom.

The Economic Clock - Malaysia’s property sector is currently at the stage of 9 - 12

4. Rising home prices - There is a growing concern that home prices are getting costlier due to the cost push factor as most of the newly launched projects appeared to be in the category of upmarket segment offering luxury housing units.

Penang Island is facing very limited land bank for housing development particularly medium cost housing units and landed homes. With limited supply in land bank, land costs on the Penang Island keep rising and inevitably push up home prices to unprecedented range that go beyond the affordable levels of the majority of the island’s population. A Penang politician MP has recently voiced his concern on rising home prices and has urged the housing ministry to relook into the present housing policy. In the meantime, more parties are urging the state government to review and address the housing issues in Penang which may have an impact on brain drain of Penang employment. The rising prices of homes, if left unchecked, may result in gentrification. Urban gentrification is a phenomenon on socio-cultural changes in an area resulting from wealthier people buying up the housing units in a less prosperous community area.

Penang Property Guide : Is it better to buy or rent ?

Saturday, May 1st, 2010

Many consider property, be it a landed home or stratified condominium unit, is a big ticket item which involves high capital and long term commitment, so the question of whether is it better to buy or rent is very much depends on one’s financial affordability and needs. www.intproperties.com looks into the advantages of owning a home versus renting.

Advantages of home ownership

i) Provide stability and certainty of stay for your family;
ii) Benefit of security and pride of home ownership;
iii) Freedom on choices of usage ie. for self-occupation or weekend second home or rent out;
iv) Built equity of your own home. Instead of paying rental monthly, you make repayments to the banks and gradually building up your home equity and ultimately owning the property after you redeem the property.
v) Hedge against inflation. Owing to the scarcity of landbank earmarked for new developments and growing population, demand for quality and affordable housing in established areas in Penang remains high which leads to higher home prices. In addition, the cost to build new housing stock continues to rise due to inflationary factor.
vi) Tax relief. Malaysians are eligible for tax relief of up to RM10,000.00 a year on loan interest payment to finance the purchase of property for three consecutive years subject to conditions that it is limited to one residential home for own occupation( not for rental) and the sale and purchase agreement is signed between March 10 2009 and December 31 2010. Besides, the government has further relaxed the EPF housing withdrawal guidelines beginning of January this year to encourage more Malaysians home seekers to own houses.

Advantages of renting

i)a cheaper and affordable way (less upfront costs) as you only need to come out with deposit payments equivalent to 3 months rental of which the security and utility deposits are refundable;
ii) Faster move in time unlike property purchase which takes 3-4 months to complete the deal and hand over the property.
iii) option of choosing length of stay according to tenant’s need ie. monthly or yearly tenancy ;
iv) No need to bear documentation costs such as legal fees for preparation of sale and purchase agreement and loan documents and stamping charges in connection with home ownership transfer and yearly taxes like assessment rates and quit rent.
v) No need to bear maintenance charges and structural repair costs either as these costs are also to be borne by the landlord.
vi) flexible of being relocated without having to worry about the empty home!

Recommended blogs on the advantages and disadvantages of Buying versus Renting, go to Renting vs Buying a home or Buying vs. Renting.

Whether renting is better than buying depends on many factors, including how fast prices rise and how long you will stay in your home. And now there is a new method rent-buy interactive calculator to compare the costs of buying and renting equivalent homes.

The methodology of the calculator keeps a running tally of the most common expenses of owning and renting. It also takes into account something known as lost opportunity costs — for example, the return you could have earned by investing your money instead of spending it on a down payment. The calculator assumes that the profit you would have made in your investments would be taxed as long-term capital gains and adjusts the bottom line accordingly. The calculator tabulates lost opportunity costs for all parts of the buying and renting scenarios.

This rent-buy interactive calculator allows home seekers to do their own comparisons on renting versus buying whereby you can i)  adjust the annual home price change and annual rental rates according to local market conditions  and ii) change inputs or variables such as your rate of return on investments, condo/common fees and your tax bracket to find out whether the buying is better than renting or otherwise!

Whilst no one can accurately predict the future pricing/rental trend of the houses in a particular area, however, analysis to find out average house price index or its trends based on the past historical housing data of say past 10 years or 15 years or 20 years of a similar class of property in a specific housing area can be quantified.

In Malaysia, information on property pricing trends and rental movements, current and future supply and take up rates of various sub-sector of Malaysia property market can be obtained from the annual publication of Malaysia Property Market Report published by Department of Valuation and Property Services (JPPH) and NAPIC quarterly reports. Find out more at 6 websites that property investors need to know in Malaysia. It would be good that a similar calculator can be generated in Malaysia using our very own housing data.

Views of new completed housing schemes in mainland Penang

Villa Cendana 2 ( Cendana Permai) at Juru

Dedaun - another housing scheme by PDC at Batu Kawan

Impacts of Global Financial Crisis vis-a-vis Asian Financial Crisis on Penang property sector

Sunday, October 18th, 2009

Despite the onslaught of the global financial downturn, the Penang property sector in general has been resilient and relatively stable with no drastic movement in housing prices. The local housing developers have been better prepared this round to ride through the downturn with the exception of handful housing developers which are forced to slow down their construction activities or delay their project launchings during the height of the crisis. Though there are signs of market softening in 2H 2008 and 1H 2009, market sentiment for Penang property sector in the 2H 2009 has improved remarkably with more buyers/investors flocking back into the market whilst housing developers are beginning to make a come back and roll out more new planned projects in anticipation of improving economy outlook. Transaction activities in both primary as well secondary market are poised to pick up again buoyed by the continued support and lending by Malaysia’s banks with attractive financing packages at low interest rates of 3-4%.

Unlike the previous 1997/98 Asian Financial crisis, the Penang property sector at that time was badly hit due to the credit crunch of the Malaysia banking system and the sudden surge in lending rates to as high as 13%.  As a result, many housing projects were stalled and abandoned, with many developers were either facing cash flow and debt servicing problems and eventually collapsed and wiped off from the marketplace such as Adorna, Penas and Cayman etc. The aftermath of the crisis has crippled the Malaysia housing and construction sector with major property sectors suffered sharp price declines as much as 30-40% from their peak levels whilst the banking system saddled with huge bad loans and high NPLs.

Some notable projects in Penang/Kedah region which have been badly affected since the times of 1997/98 Asian Financial Crisis are mostly retail/commercial and several mega projects, some of which are still in abandoned stage and awaiting revival or resuscitation:-

Penang Island

Bayan Central – An uncompleted commercial complex located at Bayan Bayu which commenced construction in 1997 and subsequently stalled.

Bayan Bay Marina and Leisure Resort by Eternal Resources (joint venture between Anson Perdana and PDC) which was originally scheduled for completed by year 2000 but stalled for several years. This multi-million Bayan Mall (now Queensbay Mall) was successfully revived by CP Group and commenced business in 2005.

Mainland Penang (Seberang Perai)

Plaza utama- A commercial complex comprising 6 storey shopping mall, 213 room-hotel and one office block at Bukit Mertajam town. Plaza Utama development commenced in Nov 1995 and completed in 1997. The commercial complex was opened for business after completion but ceased business after a short stint.

View of Plaza Utama in Bukit Mertajam


City Parade at Jalan Megat Harun, Bukit Mertajam – Another completed commercial building which is similarly affected like Plaza Utama and ceased operation after opened for business for a short period.

Both buildings have long been put up for sale by former Danaharta now Prokhas and still looking for potential “white knight” to revive it.

Fasda Heights (Taman Bidara)- a mixed housing project in Macang Bubok, Bukit Mertajam with about 1,000 units which was not fully completed and handover to the purchasers.

Taman Perindustrian Macang Indah- an abandoned SMI industrial park at Sungai Lembu, Bukit Mertajam.

Leisure Tower- A 11-storey integrated commercial complex at Jalan Kampung Gajah, Butterworth by HCC Group originally schedule for completion end of 1999 but only partially completed and abandoned.

Kristal Golf Resort (Suasa Kristal) - a golf resort located at Sungai Bakap, Southern Seberang Perai, ceased operation several years ago and taken over by Danaharta. The site was reportly sold to a private housing developer.

Others approved commercial complexes which have been launched but failed to take off and subsequently shelved are “Plaza Everise” – a planned 2.3 acre commercial complex at Sungai Rambai Commercial Centre and  “Aseania Mall” at Bandar Perda. Both are located within bukit mertajam area. “Plaza Cayman”, another planned commercial project located adjacent to old MPSP building at the heart of Butterworth town.

Kedah

Padang Meha Parklands by MBF Country Homes and Resort (Alamanda) near Kulim– a proposed RM3 billion housing/resort development near Kulim covering 5,200 hectares launched prior to 1997/98 Asian Financial Crisis which has since abandoned. Latest report disclosed that the developer has been liquidated in year 2005. More related info here: Developer liquidated, 300 land buyers in the lurch. Others include the 160 hectare  residential resort scheme (Diamond Santuary) in Mukim Padang Meha near Kulim Hi Tech Park and the proposed RM1 billion Diamond Creeks Retreats with 800 hectares of land in Ulu Behrang, Perak near the proposed Proton City.

In a nutshell, the magnitude and severity brought about by the impact of the 2008/09 Global Financial Crisis on the Penang property sector is comparatively shorter and much lesser compared to 1997/98 Asian Financial Crisis. A healthier and resilient Malaysian banking system, on-going implementation of Malaysia economic stimulus package, Malaysia’s central bank prudent interest rate policy, relaxation of EPF housing withdrawals and other economic liberalization measures, have helped to cushion the impact of the recent economic downturn on the property sector. Malaysia economy is on track for a full recovery next year.

5 market indicators on Penang Property Sector

Friday, January 23rd, 2009

1.Fewer new project launchings - Unlike first quarter last year whereby a slew of new housing projects were launched feverishly, this quarter will likely see a subdue market with fewer housing project launchings judging from the promotional activities and advertisements in the local dailies during the period of year-end holiday seasons and new year festivities. Recent housing advertisements and promotional activities are mostly geared towards “stock clearance sales”, indicating that developers/contractors are attempting to reduce their overhang units or clear their inventory.

2.Softening property prices - Whilst some of the housing developers are still holding on to their selling prices, few have started reverting to their old selling prices after price increment ranging from RM10,000 to RM50,000 per unit 5-6 months ago due to escalating costs of fuel and building materials.

Previously, it is common to see developers offering “free legal fees for SPA” only. Now, developers are more “generous” in dishing out perks which include free legal fees for all documentations and absorb all stamping duties on transfer and loan and progressive interest payments during construction period and freebies like LCD TV, air-conditioners, home alarm system, no maintenance charges for first two years etc. Under such packages, If one is to purchase a house costing RM500,000.00 with 95% loan (RM475,000.00), the estimated “savings” can total up to RM35,000.00 - RM45,000.00 per unit or approximately 3-4% of the sales price. The primary market of  Penang Property Sector is likely to see more such offerings and new pro-consumer financial packages such as 5/95 Home Loan Package.

3.Higher overhang units were reported in 3Q08 in the latest NAPIC’s report of which 86% of the overhang units is from Seberang Perai (mainland Penang), which still has abundant of usable lands and is facing stiffer competitions as compared to Penang Island.

In a softening demand environment, developers are shifting strategies to shore up sales and focus more on cash flow management to sustain their projects rather than holding on to their overhang units whilst some may review their project plans to either cater for niche product segment or more affordable products range.  A clearer picture on the take-up rates of the ongoing housing projects which indicating the demand trend will emerge over the next few months when NAPIC releases its 4Q08 and 1Q09 reports.

4. Slower construction activities-Construction activities of some ongoing housing projects have also noticeably slowing down or scaled down in recent months. Several property developers in Penang have already announced plans to defer their projects in the state;here and here.

5. Lower housing supply -Given the global economic downturn and weak domestic market outlook,  the number of new housing supply coming on stream this year may be lower compared to previous good years. It is a challenging times for housing developers to launch new planned projects.

According to Malaysia’s NAPIC Report - Residential Property Stock Report 3Q08(Page 31-33), the Penang State housing stock totals 322,426 units including 1,687 newly completed units in 3Q08. The incoming supply (under construction and works started) is estimated at 51,612 units whilst another 34,648 units planned supply units from housing projects which have been approved as well as those submitted but pending approvals.

On the national front, Malaysia’s housing ministry has projected a lower number of supply of newly completed houses at 80,000 units for year 2009 as compared to annual average of 100,000 units. More at Ministry hopes for 80,000 homes in 2009.

As the property market in Malaysia is taking a breather, the current property downturn has opened up good opportunities for property investors with a long term prospective as Malaysia properties are still comparatively attractive as compared to other regions. For advisory on property investments in Kuala Lumpur and Penang, email to us at Izrin & Tan Properties Sdn. Bhd or call us at +604 6588333 (Penang Office) or +603 92839782 (Kuala Lumpur Office) and we would be pleased to assist.

New housing schemes in Bayan Lepas near Penang International Airport

View of  the newly completed housing scheme in Butterworth town.

Penang Mega Projects: PGCC and The LIGHT

Friday, February 22nd, 2008

The Penang Island property sector looks set for major transformation following the launching of two mega development projects within a span of 3 months in the second half of 2007 ie Penang Global City Centre (PGCC) by Equine Capital and The Light Waterfront by IJM Properties.

PGCC, a high-impact and widely publicized RM25bil project was launched by the Prime Minister of Malaysia in September 2007 to complement the NCER initiatives whilst The Light, a RM6.5 waterfront city along Penang’s eastern coastline unveiled in November 2007.

The launching of the two mega projects has received wide publicity coverage by the mainstream media.The vernacular press, sinchew, has given in-depth coverage as well with multiple photo slots on its website and has described it as mega projects which complement each other, each has its own distinct feature with the former being located at the Penang foothill whilst the latter is sited along the waterfront overlooking Penang eastern coastline. It has also provide a comparison of salient facts of the two mega projects.

PGCC, designed by Architect Hani Rashid, will feature architectural themes that synthesise local symbolism and historic forms with contemporary-style designs. The PGCC’s website provides much of the information on its development concept and master plan complete with an animated photo gallery. The website also highlights on the project features of carbon-zero city, PGCC Central Park and Penang Metropolitan Park. The 40ha Metropolitan Park, which will link the Youth Park and Botanical Garden, will see more open spaces for the public. Two flyovers costing RM140 million connecting PGCC to PORR will be built to smoothen the traffic flow of the area. Click here to see to aerial view of the PGCC site and the traffic flow. Over the past few months, the developer has embarked on a series of road shows and exhibitions highlighting that PGCC will benefit Penangites and attract foreign investments and boosting Penang tourism. The development of PGCC is expected to create up to 30,000 jobs.

Unlike The Light Waterfront, the launching of PGCC has generated mixed reactions and split views from the public. A pro-development body, PERINTIS and several Youth associations have voiced their support for the development of PGCC whilst several concerned Penang NGOs and the residents from nearby Jesselton area have voiced their objections and concerns on the implications of this controversial project on issues ranging from environment impacts, traffic congestion, project density, approval procedures etc. The development of PGCC may be delayed and scale down.

Update : The application for PGCC project has been formally rejected by the Penang State Authority on 6/8/2008.

For advisory on individual property investments in Penang, email to us at Izrin &Tan Properties Sdn. Bhd. or call us at +604 6588333 (Penang Office) or +603 92839782 (Kuala Lumpur Office) and we would be pleased to assist.

Map showing the approximate location of PGCC and The Light in relation to the proposed Penang Outer Ring Road (PORR) Alignment or Browse Google’s Map guide on Georgetown.

Location Map of PORR, PGCC and The Light (source from Thestar online)

The skyline of Penang Eastern Coastal area will see major changes when The Light is fully completed…

Penang’s luxury homes market plays catch-up

Saturday, November 10th, 2007

Home values set to rise as big-name players race to build high-quality developments on Malaysian island.

WHEN it comes to Malaysian property, foreign investors seldom set their sights beyond Johor, Kuala Lumpur (KL) and Malacca. But the island of Penang in the north is starting to come into its own.

Malaysia’s foreigner-friendly policy means that Singaporeans can buy properties freely in the country, as long as they are worth more than RM250,000 (S$110,000).

Home prices in Malaysia’s second-smallest state have been on the rise and property players say the area is drawing the attention of overseas buyers.

‘Prices are generally on the uptrend and properties located in prime areas have seen significant price increases of 10 per cent from a year ago,’ said Mr Tan Chai Liang, a consultant with Izrin & Tan Properties in Penang.

Still, the island’s properties remain affordable. In general, prices of Penang homes have ‘a lot of room for appreciation’, said Mr Michael Geh, a senior partner at property firm Raine & Horne.

In the high-end segment, homes are 30 to 50 per cent cheaper than those in KL, he added. Luxury condominiums in the KL city centre range from RM700 to RM1,500 per sq ft (psf), compared with RM400 or RM500 psf for Penang’s priciest condos.

But Penang is playing catch-up. The state’s government has been pouring money into large-scale infrastructure projects that are helping to boost home prices. Also, more developers are now investing in Penang. ‘For many years, there wasn’t much development in Penang. But now, bigger developers are coming in and bigger projects are being built,’ said Mr Geh.

Well-known developers from KL have begun to descend on Penang, lured by the lower land prices, which can be as little as a quarter of those in KL.

Since 2004, these developers have announced projects worth about RM30 billion to be built in Penang over the next 10 to 15 years.

The big players include luxury developer E&O Properties and leading construction and property firm CP Group.

With their entry into Penang come more high-quality projects and the promise of escalating property values.

Indeed, their arrival has helped home prices in the southern and south-western districts of Penang shoot up by more than 20 per cent in the past year, according to Malaysia’s Star newspaper. For instance, a condo development called Coastal Towers is now selling units at RM235,000 each, compared with RM180,000 previously, said Mr Geh.

Attention is also on the northern coast, which hosts a 9km tourism belt. Districts to look out for include Gurney Drive, Tanjung Bungah and Batu Ferringhi, where a slew of resort condos and waterfront villas are being built, said Mr Tan.

For a three-bedroom condo in these areas, investors can expect to pay RM350,000 to RM650,000, he added.

Annual rental yields are 6 per cent to 8 per cent for quality condos in prime areas.

For ’super condos’ with large floor areas of 4,000 sq ft and above, prices range from RM1.5 million to RM2 million, Mr Tan said.

Some high-profile projects include CP Group’s 74-acre Queensbay development, with shops, homes and offices. On sale now is the 160-unit Bay Star condo, which is 70 per cent sold at prices ranging from RM450,000 to RM1.4 million. CP Group estimates rentals at RM3,000 to RM8,000. Bay Villas, also a Queensbay project, will be previewed in Singapore next year. It has 86 freehold waterfront villas, each with a built-up area of 5,000 to 6,000 sq ft and priced at RM3.8 million to RM5 million.

Another Penang development being marketed in Singapore is Seri Tanjung Pinang, an integrated seafront development that its developer, E&O Property Development, says is similar to Sentosa Cove.

E&O, which opened its first overseas marketing office in Singapore last week, said it has received ‘keen interest’ for its Acacia semi-detached homes, priced from RM1.45 million each.

In December, it will launch its seafront villas - at RM2.5 million to RM6.5 million each - and may also sell the condo units in Singapore next year. Other homes in the development include courtyard terraces, which start from RM735,000 and offer rental yields of 6 to 10 per cent.

Strong attraction

Since 2004, well-known developers such as luxury developer E&O Properties and leading construction and property firm CP Group from Kuala Lumpur, have announced projects worth about RM30 billion (S$13 billion) to be built in Penang over the next 10 to 15 years.

Source: The Sunday Times, Singapore 28 Oct 07

For advisory on property investments in Penang email to us at Izrin &Tan Properties Sdn. Bhd. or call us at +604 6588333 (Penang Office) and we would be pleased to assist.

Northern Corridor Economic Region(NCER) and the high-impact projects on Penang

Tuesday, August 7th, 2007
The much awaited Northern Corridor Economic Region (NCER) masterplan has been launched by the Prime Minister of Malaysia[Video] on 30th July 2007. The masterplan was well received by the people of northern states. Here are the response and comments from Economists, Matta, PCCC and former Prime Minister of Malaysia, Tun Dr Mahathir.

The NCER blueprint, prepared by master planner, Sime Darby, is expected to bring in RM177 billion investment into the Northern Corridor [Map Guide] covering 4 northern states of Peninsula Malaysia – Perlis, Kedah, Penang and Northern Perak to transform and expand the agricultural,manufacturing, tourism and logistics sectors until year 2025.

According to the NCER blueprint, five growth corridors will be created within the economic region ie. Island Corridor, Coastal Corridor, Central Corridor, Hinterland Corridor and Butterworth-Kulim-Baling-Pengkalan Hulu Grik Corridor. For more highlights on NCER, click here and here. More info are available at NCER’s website www.ncer.com.my.

The plan will position Penang into an integrated logistics hub for northern corridor. Amongst the high-impact projects earmarked for Penang are airport and port expansion, enhancement of public transportation system i) Rapid Penang Bus services , ii) high –speed ferry services iii) RM2Billion Penang Sentral a central transport hub to be undertaken by MRCB and akin to Kuala Lumpur Sentral albeit at a smaller scale of about one fifth of its development size and iv) the Penang monorail project, micro-electronic center of excellence at USM and the RM18 Billion Penang City Centre to be promoted as MICE destination.

Update : more insights on NCER initiatives by SERI - Penang as an integrated logistics and transportation hub under northern corridor economic region.

For individual property advisory and investment in Northern Corridor of Malaysia, email to us or call us at +604 6588333 (Penang).

To what extend and how fast would all this initiatives and benefits cascading down to the ordinary people in the Northern Corridor ? Find out more on who are the beneficiaries of the NCER ? at Beneficiaries of the NCER and NCER big boost for Penang and which Property firms to get NCER benefits?.

Maps on Infrastructure road linkages;

Maps on Penang’s high impact projects under the NCER masterplan ;


Green homes and sustainable living in Malaysia

Thursday, July 19th, 2007

Green homes, a relatively new home living concept to the local Malaysians, is beginning to make foray into the local housing scene. In recent months, Malaysia’s conglomerate and leading housing developer, YTL Land has taken a lead in preserving environment via its Bird Island project [Video] and has also announced its first green architectural competition in a move to encourage more home designs that promote sustainable living.

In Kuala Lumpur, another housing developer, Putra Perdana Development Sdn Bhd is carving a niche in designing and constructing energy-efficient buildings and has recently launched its D’Heron at the Lakes, a niche bungalow development located at Putrajaya offering green home features which received good response. More at Good response seen for green homes .

In Penang, Intproperties.com team went for a quick search recently on the availability of such new green homes during the recent MAPEX 2007 organized by REHDA Penang but found that there isn’t any housing schemes in Penang with green home features in their housing designs yet. In a related significant event, the Nationwide Environment Awareness Campaign 2007 was launched by the Prime Minister of Malaysia at Queensbay Mall, Penang two weeks ago urging Malaysians to save the environment. The Prime Minister has also urged housing developers and builders to pay heed to conscious planning to preserve the environment. Unlike Singapore which has already introduced the Building and Construction Authority’s (BCA) Green Building Master plan as well as providing incentives to encourage developers to embrace green housing technology for sustainable development- related link at Buildings going green with style and savings, Malaysia has yet to introduce such green master plan to encourage more local developers to follow suit. Like other industrialized countries in the world, Malaysia is facing similar environmental problems such as haze (Video), water pollution, unmanaged waste, global warming etc. Major cities of Malaysia ie Putrajaya- Kuala Lumpur, Penang have already recorded raising temperate caused by developments.

On the local front, the local council of MPSP Penang has recently conducted a Green Productivity workshop under the LA 21 initiative for the factories in Perai Industrial Area in a move to encourage more factories to adopt green productivity practices. More info on Green Productivity. The Malaysia government has also recently launched a program called Suria for Developers offering financial reward to the property developers that can come up with the best sustainable, eco-friendly housing development which incorporates solar panels or building integrated photovaltic (BIPV). The BIPV is an initiative by the Malaysia government under the 9th Malaysia Plan and implemented by Pusat Tenaga Malaysia under the stewardship of the Energy, Water and Communication Ministry.

As house buyers are increasingly discerning and environmentally conscious, they become selective and are demanding for better quality houses with eco-friendly features like the D’Heron at the lakes at Puterajaya by Putra Perdana apart from the primary factors such as location, pricing, architectural design and facilities when buying new homes. For aspiring home owners and house buyers, the next time you register for a new home with any housing developers for their upcoming projects, voice out that you wish to own a house that incorporates green home features and eco-friendly too !!

Read more for Green tips here and here! or participate in the upcoming seminar on 7th August 2007 a) The building industry’s solution to sustainable development or b) Regional conference on 5-7th November 2007Conference on Sustainable Building South East Asia – Theme : Strategies for Implementation.

The Prime Minister of Malaysia, YAB Datuk Seri Abdullah Ahmad Badawi launched the Nationwide Environment Awareness 2007 at Queensbay Mall, Penang on 8th July 2007.

Queensbay Mall, Penang

Recommended update link : Go green for a brighter future.