The Penang Island City Council (MBPP) has approved new guidelines allowing development rights to be transferred from properties within the George Town UNESCO World Heritage Site to other suitable development sites.

The move is aimed at helping property owners make use of development potential that may be restricted by heritage requirements, while preventing excessive development from being concentrated in a single location.

MBPP mayor Datuk A. Rajendran said the new guidelines set a maximum plot ratio of two for development rights transferred to a receiving site.

Previously, there was no specific limit on the amount of development rights that could be accepted at a new development site.

However, Rajendran stressed that the two plot ratio cap does not mean every property owner will automatically qualify to transfer development rights equivalent to a plot ratio of two.

The actual amount will depend on factors including the size and number of properties owned within the George Town heritage site.

“If you have only two or three properties, the transferable plot ratio could be 0.2 or 0.3,” he said during MBPP’s full board meeting on Friday (Aug 21).

The TDR mechanism is particularly relevant to heritage properties where development is restricted by factors such as building height and other conservation requirements. Under the new framework, the unused development potential can be transferred to another suitable site, subject to MBPP’s approval and planning requirements.

However, receiving sites will still need to meet all relevant planning and technical requirements. These include Traffic Impact Assessments (TIA), Social Impact Assessments (SIA), structural considerations, surrounding infrastructure and applicable height restrictions.

Rajendran also stressed that the transfer of development rights does not amount to automatic approval for development at the receiving site.

The guidelines cover relevant areas within the George Town World Heritage Site, including the core and buffer zones. They apply to commercial, mixed-use and residential properties, subject to the conditions imposed on the receiving sites.

All properties within the George Town UNESCO World Heritage Site are currently eligible for consideration under the TDR guidelines, regardless of whether they are used for residential or commercial purposes.

Rajendran said the new framework would allow development potential to be managed more sustainably while helping to protect George Town’s heritage character and prevent development pressure from being concentrated in particular areas.

Artist impression

FBG Holdings Bhd, formerly known as Fajarbaru Builder Group Bhd, is seeking to withdraw from the joint development of the Penang Medi-City project in Batu Kawan.

The construction firm said its wholly owned subsidiary, FBG Land Sdn Bhd, had written to the Penang Development Corp (PDC) to cease proceeding with the collaboration under the master purchase and development agreement (PDA). FBG proposed that both parties discuss an orderly conclusion of the existing collaboration.

FBG Land and PDC are currently discussing the proposed cessation, with the company saying further announcements will be made upon any material developments or once the terms and conditions are agreed.

The PDA for the first phase of Penang Medi-City was signed in January 2025. The 235.8-acre project was planned as a mixed development incorporating healthcare and wellness facilities alongside residential, retail and commercial components.

Under the agreement, FBG was to acquire a 51.2-acre Parcel 1 in Bandar Cassia for RM111.5 million. The parcel was expected to generate a gross development value of RM2 billion over eight years.

FBG had previously undertaken a rights issue with free warrants to fund the land acquisition. In December last year, the exercise raised RM54.9 million through the issuance of 304.995 million rights shares.

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This is a freehold high-rise residential project by Airmas Group located near Jalan Telaga Air in Butterworth, adjacent to WellSpring Residence and about 500 metres from Raja Uda. It offers convenient access to nearby amenities, schools, supermarkets, eateries and transport links, including Penang Sentral, around five minutes away by car. The development comprises an 18-storey building with 148 units, each featuring three bedrooms and two bathrooms, with indicative prices starting from RM527,000.

Find out more about Silkspring Residence

The Penang Island City Council (MBPP) has introduced new guidelines governing businesses operating on private land, effective August 21, 2026.

The Guidelines for New Applications and Management of Licences on Private Land (GTP) were approved by MBPP’s Public Health Standing Committee to regulate small-scale businesses, while addressing public nuisance, cleanliness and neighbourhood safety concerns.

MBPP Mayor Dato’ Ir. A. Rajendran said individuals operating businesses on their own residential properties, private land or the land in front of their homes are required to obtain a licence from MBPP.

Under the new guidelines, businesses must comply with several conditions:

• The business area is limited to 20ft by 20ft (400 sq ft).
• A maximum of two stalls is allowed at each site.
• Only food and beverage businesses are permitted.
• Tables and chairs are not allowed.
• The licence holder must be present at all times to supervise the business.

Rajendran said the guidelines are intended to ensure that businesses operating on private land remain small-scale and do not create problems for surrounding communities.

MBPP councillor Tan Soo Siang said the guidelines would help ensure business locations remain conducive while minimising issues such as poor sanitation, traffic congestion and safety risks.

She noted that businesses operating on private land are becoming increasingly common in George Town, and are no longer limited to village areas.

Tan added that larger operations could generate significant waste and attract more traffic, potentially affecting the comfort and safety of neighbouring residents.

Meanwhile, MBPP has also approved new Guidelines for the Transfer of Development Rights for Buildings Located within the George Town World Heritage Site.

Rajendran said the new guidelines limit the transfer to a maximum of two plots, compared with no previous limit.

Owners and operators of Private Accommodation Premises (Tempat Inap Persendirian, or TIP) in Penang have been given a two-month grace period until November 1, 2026 to submit licence applications following the enforcement of the Private Accommodation Premises By-Laws (Penang State Local Authorities) 2026 (TIP By-Laws 2026) on August 1.

Penang Local Government, Town and Country Planning Committee chairman H’ng Mooi Lye said the grace period was introduced to give TIP operators sufficient time to prepare and submit their applications to the relevant local authorities.

She said enforcement action would be taken after the grace period based on the provisions of the new by-laws.

The new regulations aim to ensure the short-term accommodation industry develops in a more orderly manner while safeguarding the safety, peace and wellbeing of local communities.

According to H’ng, the Penang Island City Council (MBPP) received 364 complaints involving public nuisance and health issues related to TIP operations between 2020 and March 2026, while the Seberang Perai City Council (MBSP) recorded 24 similar complaints.

Although TIPs contribute to the tourism sector and provide economic opportunities, operators must conduct their businesses responsibly and take into account the interests of nearby residents, she said.

The TIP By-Laws 2026, approved by the State Executive Council on June 10, also provide clearer enforcement powers compared with previous guidelines. These include powers to investigate, enter premises and close premises for non-compliance.

Penang is believed to be the first state in Malaysia to introduce specific by-laws governing TIP operations.

The fees include a RM50 application administration fee and an annual licence fee of RM1,000 for premises with up to three rooms. Premises with more than three rooms will incur an additional RM200 per year for each extra room, up to two additional rooms.

A separate TIP fee of RM1,800 per unit per year applies, while a RM5 fee is imposed for each notice issued for outstanding payments.

TIP operations are prohibited in government or statutory body premises, healthcare or childcare centres, workers’ hostels, private educational institutions, as well as low-cost, low-medium-cost, affordable housing and People’s Housing Projects.

Within MBPP’s jurisdiction, TIP operations may be considered in designated residential and commercial zones, subject to planning requirements. Landed individual-title properties such as detached, semi-detached and terrace houses may be considered, subject to an application to change the building’s use.

For stratified properties, the types of properties permitted to operate as TIPs vary between the MBPP (Penang Island) and MBSP (Seberang Perai) areas. In general, strata residential properties on Penang Island are not permitted to operate as TIPs, while a wider range of strata properties is allowed on the mainland. The permitted property types are as follows:

Penang Island (MBPP):

• Serviced apartments
• Small Office Home Office (SoHo)
• Small Office Flexible Office (SoFo)
• Small Office Virtual Office (SoVo)
• Suite offices
• Duplex offices

Seberang Perai (MBSP):

• Apartments
• Serviced apartments
• Condominiums
• Townhouses
• Small Office Home Office (SoHo)
• Small Office Flexible Office (SoFo)
• Small Office Virtual Office (SoVo)
• Suite offices
• Duplex offices
• Landed strata properties

Owners or operators must also obtain approval from the relevant Joint Management Body (JMB) or Management Corporation (MC) to use the property for TIP operations. The application is subject to approval at the relevant general meeting, with a special resolution requiring at least 75% of valid votes.

The state government said the new regulatory framework is intended to strike a balance between supporting tourism and protecting the wellbeing of local communities.