Penang Property Talk

The Penang South Island (PSI) project embodies the social and economic goals at the heart of Penang 2030. Measuring 4,500 acres of state-owned land, the project will span three islands that comprise an advanced new ecosystem and serve as a model for the future of work and livability in Malaysia.

On the lifestyle front, PSI will deliver 20,000 new homes including affordable housing, mixed-used residential and landed residential. Future residents will enjoy over 13 kilometers of public beaches, 140 acres of coastal parks, 12 kilometers of cycling tracks and plenty of open green spaces. Smart city components including digital connectivity and energy management will future-proof infrastructure across the islands, while eco-conscious development will ensure a sustainable environment that takes the challenges of climate change into account.

PSI will attract a new wave of tourists to Penang, which is already one of Malaysia’s top tourism destinations. An idyllic waterfront area dubbed “Heart of the Island” will be the main draw with its public square, retail walk, convention center and Instagram-worthy views. It will also offer a vibrant mix of entertainment and lifestyle options that rival those in popular high streets around the world.

A robust integrated transit system will make it easy for residents and tourists to commute throughout PSI. The system will include highway, light rail transit, trams and water taxi services. Walkability and bike-ability also make personal mobility a great option for thoughtful connectivity.

A Place to Live, A Place to Work

Where electronics and manufacturing for low-value sectors once drove Penang’s economy, the future lies in advanced manufacturing and R&D facilities for the next generation of digital technologies in aim for high-value E&E sector.

PSI will include an 800-acre Smart Industrial Park that will create a range of new jobs for the country’s young population and draw global companies looking to expand their businesses and tap into the potential of Southeast Asia’s burgeoning middle class. The Smart Industrial Park will cater to companies producing everything from automotive electronics and mobile devices to cloud computing technology and digital medical devices.

The Smart Industrial Park will be a boon for companies looking for new industrial land to locate high-tech production facilities, house a campus for software and business services and much more. With 480 multinationals already operating in nearby Bayan Lepas Free Industrial Zone – an area that has driven economic growth in Penang for forty years – the challenge won’t be attracting companies, it will be finding space for everyone that wants to take advantage of what the Smart Industrial Park has to offer.

Laying the Foundations of the Future

Like all of the best things, developing PSI will take time. Phase one of the PSI work is scheduled to commence in the second half of 2020, and will focus on developing the first 2,300-acre island over the course of ten years. Yet, the first benefits will come as soon as that begins. Reclamation during phase one is expected to create 9 billion ringgit worth of new construction jobs.

Throughout the course of its development and long after its completion, PSI will be a catalyst for Malaysia’s economy and help the country achieve high-income status along the way. Once PSI reaches its full potential, it will serve a model for how people in one of Asia’s most dynamic countries will live, work and play in the future.

Source: Penang State Government

About Utropolis @ Batu Kawan

A mixed commercial development by Paramount Property in Batu Kawan, Penang. Strategically located next to UOW Malaysia KDU Penang University College, just a stone’s throw away from IKEA furniture store. There is also a proposed linkage to the Design Village Outlet Mall.

Find out more about Utropolis @ Batu Kawan:

• Phase 1 – Sensasi Commercial & Residential Suites
• Phase 2 – Suasana Residential Suites
• Phase 3 – Sinaran Avenue & Sinaran Residences

Penang Chief Minister Chow Kon Yeow today said the state will sign a major agreement next month to realise its 1,821ha three-island project (Penang South Islands), which forms an important part of the RM46 billion Penang Transport Master Plan (PTMP).

He said once the agreement was signed, the project’s delivery partner, SRS Consortium Sdn Bhd, would come up with a detailed design and plan for the PTMP, which includes reclamation, rail, roads and other associated works.

Besides the detailed design, once the agreement is signed, tenders will be called and the contractors will be hired later.

Chow said this agreement can be only signed once all relevant approvals are obtained.

In the meantime, he said the state government would now await a RM10 billion sukuk bond to be issued and a federal government guarantee for the bonds.

“Depending on the financial arrangement and the bond guaranteed by the government, we will decide what to start off with first,” he said at a press conference in Komtar today.

Chow said the top priority was the three-island project, now dubbed Penang South Islands (PSI), followed by the Bayan Lepas Light Rail Transit (LRT) and the Pan Island Link 1 (PIL1) highway.

The 30km LRT line will cost about RM8 billion and will begin in June next year. It will take five years to complete.

The 20km PIL 1 highway will cost about RM7.5 billion.

Chow also revealed that 27 groups had been shortlisted for the PSI master plan competition. A total of 124 consortiums had earlier indicated their interest, he said.

Two-thirds of those shortlisted are foreigners.

The competition is co-organised by the northern chapter of the Malaysia Institute of Architects. Winners will be announced next April.

He said an honorarium of US$125,000 (RM520,000) will be paid to each of the five shortlisted groups. The state government has set aside RM5 million for this purpose, along with the cost of organising the competition.

The PSI is the Penang government’s RM46 billion project to reclaim three islands and later sell them to the highest bidder to build highways, the LRT line and other modes of transport.

The project will be undertaken by SRS Consortium Sdn Bhd, a joint venture between Gamuda Bhd and Penang real estate development firms Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd.

The Edge Markets recently quoted Gamuda Bhd managing director Lin Yun Ling as saying that the first package of the Bayan Lepas LRT would be awarded by mid-2020.

Source: Free Malaysia Today

Gamuda Bhd is likely to sign the Project Delivery Partner (PDP) agreement for Penang Transport Master Plan in the ‘next few weeks’, and the first package of Light Rail Transit (LRT) would be awarded by mid-2020, according to managing director Datuk Lin Yun Ling.

“Once the PDP agreement is signed, the design works will start, from LRT to the first (man-made) island, or what we call Island A, and Pan Island Link, and reclamation work for South Island will all move. We expect by middle of 2020, the first package of LRT will be awarded,” he told reporters at a press conference, after the group’s annual general meeting today.

Source: EdgeProp.my

by Anders Ong

Sometimes some people earn more in property investment and sometimes some people just making lost in the market. Some are pure experts and some are pure luck if we had bought properties during the boom time every single person can also be an expert and boast about it. But, the era had past or do it really past forever?

We might know some of our friends whom had earned millions and we might have friends whom are saying property investment isn’t profitable. This goes to the simple theory of Property Cycle, it is the periodical and sequential cycle of property where there price goes up and goes down; in a nutshell, TIMING. Property cycle happens due to the economic principles of Supply and Demand influenced by the political, demographic, economic and social economic factors. The demand of property will always increase in the current era due to the growth of population and limited supply of land for property development.

The property cycle happens from time to time but it does take quite a long time to complete a perfect cycle which can range up to 10 – 30 years in some countries and this is the reason no one ever notices it or forgot as it took quite a time and an amateur investor could turn into professional investor for such a long period of investing.

The First recorded studying of property cycles was Homer Hoyt in 100 Years of Real Estate Values in Chicago and popularised by the 18 Years property cycle developed by Economist Fred Harrison, they are the first few people to identify the existence of property cycle. Fred concluded that the length of a full property cycle averages out to 18 years at max and divided into 4 distinctive stages.

Basically, there are TWO trend and FOUR stages of property cycles:-

Up – Cycles Trend

#1. RECOVERY of Market – During this stage, the market is gaining more confidence in the property buyer market. Rental rates started to rise, time took to sell off a property reduced, property price and property value increase. Banks are hungry and ease their lending criteria and approve more credits.

#2. Mid Cycle Dip – Once the market started to recover there will be a small mid-cycle dip as some earlier investor take profit before the explosive phase of the market

#3. EXPLOSIVE of Market – Bank interest is low and easier for approval, buyer sentiment increase, media perception are positive, property price increase at a more rapid rate and rental continue to increase. Property will be sold above their market value and vendor keep on increasing their prices for more profits. Every explosive stage also brings in more new young generations of investors into the market due to greed-driven by seminars and property guru. Many people will borrow against their increased house value and buying consumer products. Even seasoned property investors will also be driven as they worried they will missing out the boat. (Seller Market)

#4. Cycle Peak – This is the final few years of the explosive phase, where price had to reach the peak of the property cycle which the economist Fred Harrison named it as the “Winners’ Curse”. It is definitely not lucky to buy the highest priced property during the peak as the next phase of the cycle will be a downturn phase. Most property bought at this peak will be valued lower or worth less than the price paid later on. This happens due to property prices risen too quickly or unaffordable to the market, high growth of liability and credit due to heavy borrowing, overconfident of developers in sales and led to oversupply, and more speculators whom are looking for a quick property flip of fortune.

Down – Cycles Trend

#5. RECESSION of Market – Market stage is characterized by oversupply, decreasing growth, price plummet, more seller and fewer buyers, harder to get loan, home harder to sell, past buyers over-leveraged, increased vacancies, increase auction market, reduced cash flow or rental, and bad media perception with daily dose of oversupply and auction news. This is also the result of a rapid supply of developers’ stocks and sellers in the boom phase. Property prices could stagnate or even drop due to purchases at the boom period which people could not afford so they had to sell at depressed prices. (Buyer Market)

#6. Cycle Bottom – This stage of property cycle reflects the lowest stage of the cycle where most property prices are low, stagnant and rock bottomed but no one is buying due to the negative sentiment, oversupply and loss of money from sales during the recession.

#7. STABILIZE of Market – Falling bank interest rate and Bank Negara Over Night Policy (OPR) rates, ease of lending rules and policy, prices may remain flat and move up slowly. There are more and more government initiatives and interventions on the property market to encourage take up rate, economy and homeownership.

Summarization on investing through the property cycles timing:

• Recovery phase prices usually start higher than the last recovery prices.
• The property cycle has different time variance in different country.
• It is normal for property prices to go through the up and down.
• Buy at the bottom of the cycle and sell at the top of the cycle.
• Do not over leverage at the peak point of property cycle.
• Do not panic sell when price are dropping.
• Be a seller when everyone is buying
• Be a buyer when everyone is selling
• Do not mislead by the media.

In a nutshell, understanding of the periodical property cycle can make us a better investor and have more understanding of current property market health by looking at market signals. There would be nothing to be worried of during market recession and there would be nothing to be excited during the market explosive.

Anders Ong – Speaker, Property Consultant, Young Property Investor and Author of Back To Property Investment To Create Wealth