THE completion of a lifestyle shopping mall along with an office tower by 2012 is set to transform Hunza Properties Bhd (HPB) (5018) from a property developer to that of a real estate landlord.

The Penang-based company, which is due to announce two new anchor tenants for its Gurney Paragon retail development next week, has no plans to sell the mall.

"We will instead hold and manage this mall. We believe that the consistent income stream from the mall will enable the group to have a strong base of recurring income," HPB executive chairman Datuk Khor Teng Tong told reporters after a shareholders' meeting yesterday.

Apart from the 8-storey mall and 10-storey office block, Khor said the project's 700,000 sq ft net lettable area will include a podium, along with the sea-fronting former St Joseph's Novitiate building in Pulau Tikus.
St Joseph's Novitiate and a chapel inside is a heritage building on the grounds of the project, which is bordered to the north by Gurney Drive and south by Kelawai Road.

The 94-year-old building, which is touted by many as a heritage masterpiece and is being conserved by HPB, is set to be transformed to a space which will house boutique retailers and restaurants.

HPB bought the 4ha freehold site in 2004 for an integrated project which will include two condominium blocks with a development value of RM450 million.

The residential component of the project, which boasts an average RM700 per sq ft, is currently 85 per cent completed and the company expects to have vacant possession by April next year.

Khor yesterday announced that HPB had recorded its highest ever net profit of RM50.9 million for the 2010 fiscal year ended June 30. This compared with RM27.6 million in 2009.

SOURCE: Business Times

GEORGE TOWN: The Real Estate and Housing Developers' Association (Rehda) of Penang is claiming that the high cost of land is the main reason for houses being sold at high prices in the state.

Chairman Datuk Jerry Chan Fook Sing said the high cost of land was also the reason for developers' inclination towards building upmarket homes in the state.

The limited land in Penang Island has caused landowners to sell their land at very high prices and this directly impacts the price of houses, he said.

"When the land is bought for a high price, developers are forced to sell the houses at a high price as well.

"Therefore it is not fair when only the developers are blamed in this matter," he told reporters here on Thursday, Dec 9.

To ensure affordable housing prices for all levels of society in the state, the government would have to find a suitable mechanism to overcome the problem, he said.

A recent report quoted Senior Fellow at the Social, Economic and Environment Institute (Seri) Dr Michael Lim Mah Hui as saying that the average price of a house in Penang was RM540,000 last year.

The report also said the price of house in the state exceeded that of the average house price in Kuala Lumpur at RM390,000. – Bernama

SOURCE: The Edge Property

PRICES of properties on Penang island are the most expensive in Malaysia.

Socio-Economic and Environmental Research Institute (SERI) senior fellow Dr Michael Lim Mah Hui said the average house price last year was RM540,000 or eight times the average household income.

In comparison, the average house price in Kuala Lumpur was only RM390,000, or six times the average household income.

Lim said the average house price on the island has increased further this year.

A ratio of house price to household income of three to four times is internationally acceptable.

"If the situation persists, many Penangites, especially those in the middle and more so the lower classes, will not afford to own properties.

"The state government should address the issue before it gets worse," he told reporters in Georgetown on Thursday.

Lim said for a start, the authorities should stop encouraging construction of high-end properties that cater to foreigners.

He said data from the Malaysia's population and housing census indicated that there was a property glut, which suggests that many people bought property for speculative and investment purposes, thus pushing up the prices further.

In 2000, the vacancy rate in Malaysia was 15.6 per cent from the total of 5.547 million unit of houses, which amounted to nearly 750,000 houses.

He said the percentage was more than 20 per cent now.

"It is not that we do not have the houses. There are. It is just that the houses now are way too expensive and beyond many people's means.

"That is why I say the authorities should stop encouraging the contruction of high-end and luxurious properties," he added.

Meanwhile, Consumers' Association of Penang president S.M. Mohamed Idris said to make housing afforable to ordinary Penangites, the government should start a public housing policy, which provides affordable housing, particularly in urban areas, to cater to those below a certain level of income.

He said a good example worth studying was the Singapore Housing Board model, where the government spearheaded the building of affordable housing for a majority of its citizens.

He added that alternatively, the government could consider doing this in partnership with the private sector. "In short, the government's priority should be to put the needs of the majority of the people ahead of other things," he added.

SOURCE: Business Times

THE average price of a house on Penang Island in 2009 was RM550,000 — the highest in the country and RM160,000 more than the average price of a house in Kuala Lumpur.

State government think tank, Socio-Economic and Environ-mental Research Institute (Seri), said the price was eight times the average household in-come.

Its senior fellow Dr Lim Mah Hui said the house price should be between three and four times the average household in-come.

Dr Lim added that most houses that were built did not cater to the need of the majority of people.

“The building of super luxurious condominiums should not be encouraged. There are too many empty houses in Penang. The demand is there but it’s not affordable,” he told a press conference yesterday.

Consumers Association of Penang president S.M. Mohd Idris said house prices have soared to exorbitant levels in major cities of the country.

“Even the middle class cannot afford to own a house or apartment, let alone the lower income group,” he said.

Mohd Idris said that it was time for the government to start a public housing policy that provided affordable housing, particularly in urban areas, to people from the lower income group.

“A good example worth studying is the Singapore Housing Board where the government spearheads the building of affordable housing for a majority of its citizens,” he said.

He said the majority of Malay-sians want affordable homes but developers are supplying houses that they cannot afford.

“Developers prefer to cater to investors and speculators who buy to rent or to flip over and make money. They also go overseas to aggressively market properties as they are still cheap by international standards.

“Unlike Indonesia, the Philippines, and Thailand, Malay-sia is one of the few countries in Southeast Asia to allow foreigners to own landed property,” he said.

SOURCE: The Star

GEORGE TOWN: Mah Sing Group Bhd will apply for approval to take over the planning permission for the Tropika Ferringhi project given to the previous land owner.

Mah Sing said in a statement that on 22 November, the group had acquired a piece of freehold land in Batu Ferringhi which had been approved by the authorities for residential development as applied by the vendor from an earlier submission.

“The premium has been paid and a development order procured for landed development (Phase Two) for the project named Tropika Ferringhi.

Subject to authorities’ approval, Mah Sing intends to rebrand the project ‘Ferringhi Residence@Penang’ upon completion of the sales and purchase agreement.

”Mah Sing will be applying to the MPPP for approval to take over the planning permission upon completion of the land purchase,” the statement said.

Mah Sing was responding to an MPPP statement which said that the group had not submitted any application for planning or development approval for the Ferringhi Residence@Penang project.

Mah Sing had said the group would unveil its RM800mil residential project on a 61-acre site in Batu Ferringhi in the first quarter of 2011.

Group managing director and chief exe-cutive Tan Sri Leong Hoy Kum said the pro- ject would be a gated and guarded scheme, comprising property such as semi-detached and bungalow homes as well as condominiums.

SOURCE: The Star