An aerial view of the Botanica.CT in Balik Pulau, Penang.

PROPERTY prices in Penang have risen by leaps and bounds since about seven years ago. The announcement of the second bridge in Penang in late 2006 is a key reason for the increase in property prices.

Raine & Horne Malaysia director Michael Geh said that the price of vacant land on the island has increased from around RM250 per sq ft to RM300 per sq ft in Batu Maung. This southern part of the island where the second bridge is located could fetch about RM50 per sq ft to RM60 per sq ft prior to the announcement of the second bridge in late 2007. Geh pointed out that the pricing depended on whether the land had been zoned for agriculture, commercial or residential use.

For landed properties, new two- to three-storey terrace houses now cost from RM1.2mil south of the island, compared with about RM450,000 prior to the announcement.

“The new condominiums in similar locations are now priced at RM700,000 to RM800,000, compared to RM250,000 to RM300,000 prior to the announcement.

“In the prime locations of the north-east district such as Tanjung Bungah, Tanjung Tokong, and Pulau Tikus, the pricing of new lifestyle high-rise unit starts from RM800,000 onwards, about RM400,000 prior to the announcement,” Geh said.

The sub-sales market in 2013 saw the highest transaction for a landed property at RM4mil for a 5,000sq ft semi-detached house with a land area of 3,800sq ft in Tanjung Tokong. Terraced properties sold in the sub-sales market in 2013 saw the highest transaction at RM1.8mil for a 2,700sq ft linked home with a 1,900sq ft land area in Tanjung Tokong. Property prices in the sub-sales market are about 10% to 15% more than two years ago, Geh said.

“The highest transaction for a condominium in the sub-sales market in 2013 was RM1,200 per sq ft. This was for a 1,200sq ft lifestyle condominium in Tanjung Tokong.”

In Seberang Prai, Henry Butcher Seberang Prai associate director Fook Tone Huat said vacant land prices in Seberang Prai, especially those in South Seberang Prai where the second bridge is located, is now hovering at RM40 per sq ft to 50 per sq ft, compared to RM8 per sq ft to RM9 per sq ft prior to the announcement of the second link project in 2006.

In Central and North Seberang Prai, the land prices then were between RM20 per sq ft and RM40 per sq ft. Now, the land prices in the prime locations of Central and North Seberang Prai are priced between RM50 per sq ft and RM100 per sq ft.

“New landed properties such as double-storey terrace units in South Seberang Prai are now priced between RM350,000 and RM400,000 compared to between RM150,000 and RM200,000 prior to the announcement of the second bridge,” Fook said.

In Central and North Seberang Prai’s prime locations, the prices for double-storey terraced are between RM400,000 and RM600,000, compared to between RM200,000 and RM270,000.

“We are also seeing a lot of lifestyle condominium projects being planned for development in Bukit Mertajam this year. The pricing of new condominiums in Seberang Jaya and Bukit Mertajam in Central Seberang Prai hover around RM300 per sq ft,” he said. As for the secondary or sub-sales property market, the prices for double-storey terraced houses hover around RM250,000 to RM500,000, depending on the location. “The landed properties in the sub-sales segment command the best pricing in Bukit Mertajam and in Butterworth town. The pricing of condominiums in the secondary market hover between RM250 per sq ft and RM300 per sq ft,” he added.

Property market outlook

Fook said the volume of property transactions in Seberang Prai is expected to soften this year, largely due to the difficulty in obtaining housing loans. “There will definitely be fewer transactions this year compared to approximately 12,000 registered in 2013. Since January, we have seen fewer enquiries for primary and secondary market properties, as the rejection rate of housing loans is currently hovering at about 60%.

“Property prices are expected to remain more or less the same as last year,” Fook added.

According to Geh, prices of properties in the secondary segment would remain stable, while those in the primary market might soften slightly. “Property prices will soften this year, unless Bank Negara changes its housing loan policies. There will definitely be a dip in the volume of transactions, due to the stringent loan conditions,” he maintained.

Besides the opening of the Second Penang Bridge on March 1, 2014, Seberang Prai is also drawing the attention of developers, as there are now plans to develop a RM200mil premium retail outlet known as Penang Designer Village and an integrated shopping mall, which will be anchored by an Ikea store.

PE Land Sdn Bhd will undertake the Penang Designer Village, while the integrated shopping mall with residential components will be developed by Aspen-Ikano.

Kuala Lumpur and Penang-based developers will undertake the development of RM4.559bil worth of residential and commercial projects in Penang amid a very challenging year for the local property market, which is expected to soften. Approximately RM1.862bil worth of residential and commercial projects are being planned in Seberang Prai, while the remaining RM2.697bil will be launched on the island.

The island, however, is seeing fewer residential property launches due to the growing shortage of land, higher land cost on the island, and a challenging property market environment, although the gross development value (GDV) of the projects launched on the island this year is still higher.

Developers with plans to undertake fresh projects include IJM Land Bhd (GDV of RM538.5mil); Mah Sing Group Bhd (RM280mil); DNP Land Sdn Bhd (RM800mil); Ideal United Bintang (RM935mil), a subsidiary of Wing Tai Malaysia Bhd; Tambun Indah Land Bhd (RM616mil), Sunway Bhd (RM290mil), S P Setia Bhd (RM300mil) and Eastern & Oriental(E&O) Bhd (RM800mil), MTT Properties & Development Sdn Bhd (RM250mil) and Ivory Properties Group Bhd (RM2.76bil).

Ivory Properties Group Bhd and Tropicana Corporation Bhd have also formed a joint venture company called Tropicana Ivory Sdn Bhd to develop Penang World City, an integrated waterfront development with a GDV of RM10bil.

Renowned developer, BSG property, with huge land banks in Penang is still embarking on projects despite the cautious market sentiment as its projects are mainly located in prime locations. In Seberang Prai, the biggest projects planned so far are DNP Land’s RM250mil BM Mahkota and the RM550mil Jesselton Hills landed property scheme in Bukit Mertajam and Tambun Indah Land Bhd’s RM616mil new landed property launches in Bukit Mertajam and Pearl City in Simpang Ampat, South Seberang Prai.

IJM Land will be launching RM236.5mil worth of properties comprising double-storey houses in Jawi, South Seberang Prai and double-storey linked bungalows in Bukit Mertajam, Central Seberang Prai as well as what is said to be the most expensive villa in Penang.

Sunway Bhd also plans to launch some RM150mil worth of residential and commercial projects for the second phase of Sunway Wellesley in Seberang Prai, a mixed-development project in Bukit Mertajam at the end of this month while the RM60mil third phase, comprising resort condominiums, will kick off in Oct 2014.

Sunway Bhd general manager Tan Hun Beng said it will be launching properties in Seberang Prai as the lower land prices allow the group to price its properties affordably.

DNP Land (North) general manager K.C. Tan said that the exclusive landed property scheme will feature the first high-end condominium project for Bukit Mertajam with over 200 units of semi-detached and terraced houses in Jesselton Hills, Alma.

Tan said the condominium scheme, known as BM Mahkota, has a GDV of RM250mil, while the GDV of the Jesselton Hills landed properties is about RM550mil.

“The projects are strategically located in between the first and second bridges, and is close to Jalan Song Ban Kheng, a prime residential district. They are also surrounded by the Prai and Bukit Minyak Industrial Parks and Penang Science Park.

“We expect buyers to come over from Kedah, especially from Kulim High Tech Park, as Bukit Mertajam is the main connecting point beween Penang and Kedah,” he said.

Tan added that when the Aeon BM Department Store opens in mid-2014, the appeal of the projects will be enhanced.

“The Aeon BM Department Store, sitting on a 19-acre (eight hectares) site, has a 1mil sq ft of gross retail area,” he said.

On the island, Ideal United Bintang has planned the most number of projects to be launched this year. This includes approximately RM935mil of residential projects in the south-west district, which include mixed-development projects such as the RM265mil Solaria and the second phase of the RM220mil Ideal Vision park project. The second phase of the RM450mil Imperial residences residential project will also be launched.

The other sizable project is E&O Bhd’s RM800mil Andaman Edition 18 East condominium project, which will be launched in the first half of 2014.

IJM Land will introduce the rM125mil Trehaus@Bukit Jambul, comprising condominium villas and semi-detached villas in this first quarter, and a yet-to-be-named medium-and low-medium cost project, which have a GDV of RM177mil in the fourth quarter of 2014.

In the second half of this year, S P Setia will launch its RM300mil Setia Sky Vista, a condominium project in Relau. Meanwhile, Mah Sing will undertake the development of the RM280mil The Loft condominium scheme in Southbay City in Batu Maung, which has been launched this January. Sunway Bhd will kick off the third phase of the RM80mil Sunway Cassia comprising two-storey semi-detached and three-storey terraced houses in Batu Maung in June 2014.

S P Setia Property (North) general manager Khoo Teck Chong said the group is launching fewer projects this year because of the softening property market, due in part to banks tightening the loan conditions.

E&O marketing and sales head Christina Lau said the greater access afforded by the second bridge and a host of new investments pledged by multinational corporations were positive indicators for the state of Penang going forward. “E&O is fortunate to possess development land on Penang Island including Seri Tanjung Pinang 1 in Tanjong Tokong and over 300 acres at Gertak Sanggul and realising the development potential of these land parcels will keep us busy for several years to come.”

Source: StarProperty.my

Taman Kota Permai 2, an upcoming development located within the bustling township of Bukit Mertajam, Penang. The third phase of this development comprises one unit of 3-storey bungalow and 12 units of semi-detached houses. It is only mere minutes drive from Juru toll (Autocity) and about 15 minutes drive from Penang Bridge. Easily accessible to public amenities like schools and shopping malls as well as the upcoming Second Penang Bridge.

Project Name : Taman Kota Permai 2
Location : Bukit Mertajam, Penang
Property Type : 3-storey bungalow and semi-d
Land Tenure: Freehold
Total Units: 1 (Bungalow), 12 (Semi-D)
Indicative Price: RM 888,000 onwards
Developer : Zuwen Bina Sdn. Bhd.
Contact Number : 04-502 1172

Location Map

IDEAL United Bintang Bhd (IUBB) is targeting to obtain the gold Green Building Index (GBI) certification for the Tree Sparina and Solaria projects in Bayan Lepas, Penang.

IUBB senior strategic design manager Gan Heng Fey said in an interview that solar panels and rain harvesting systems were among the green facilities that would be installed for the projects.

The RM375mil Tree Sparina, comprising 548 condominium units, is the first phase of the Ideal Vision Park project, while the RM300mil Solaria, a commercial cum residential high-rise scheme, is part of the One Residence project.

Gan said to get the gold GBI cer-tification, the aim of the projects was to obtain 83 points from the GBI panel, comprising representatives from the Malaysian Institute of Architects and the Association of Consulting Engineers Malaysia.

“The panel will look at the design and the material used.

“Both the projects would be designed to have a north-south orientation, so that the units could avoid sunlight penetration from the west and east.

“We will also use aluminium screens for all the balconies to further reduce sunlight penetration.

“Lighter colours will also be used for the facade of the buildings to reduce heat absorption,” he said.

Gan said piling works had started for Tree Sparina, which was already sold out since the launch a year ago.

“The project is scheduled for completion in 2017.

“We have also received overwhelming registration for Solaria, which will be launched soon,” he added.

Source: StarProperty.my

Chart 1: Penang Map

THERE is always a past and present which justify and lead the incoming future. Penang is a fascinating storyteller which has been able to treasure antique flavours while developing modern high-tech manufacturing enclaves that have attracted the world’s attention.

Past memories… Treasures of the future

On July 7, 2008, a huge opportunity was offered to the Penang State, the already famous Malaysian Silicon Valley. George Town, its capital city, was inscribed as a UNESCO (United Nations Educational, Scientific and Cultural Organisation) World Heritage Site due to its unique architectural and cultural townscape without parallel anywhere else in the East and South-East Asia.

Penang has been capitalising on the attention that has been driving the surge of tourist arrivals (local and international) from below three million arrivals in early 2000 to more than six million tourists in 2012. The target for this year is to attract above 10 million tourists.

The geographic configuration of the Penang State has surely contributed to the consistent growth of diversified economic drivers which consequently include property developments. (Refer to chart 1)

Two totally different scenarios in Penang have been prevalent in the last seven years: On Penang Island, a vibrant, high standard cosmopolitan lifestyle while the other is concentrated more on industrial and manufacturing projects backed by logistics and educational initiatives.

The first aspect which is related to Penang Island, is now rated the eighth best destination for retirement in the world while the mainland has been nicknamed the Malaysian Silicon Valley. Property development and their values have been rising accordingly, generating a stable and positive market.

Present with abundant opportunities

How the two property markets of Penang Island and the Mainland have been evolving in the last few years and how they will move on can easily be seen from this comparative table which shows the past, present and future supply of residential properties in the two locations. (Refer to chart 2)

Chart 2: Supply of residential units

By looking at the estimated population growth in the two areas based on a conservative calculation and without taking into account the “seasonal” resident crowd (expatriates and retired foreigners), we can clearly see the viable potential that both these areas have.

It is interesting to note that Penang State is the only one in Malaysia offering an almost adequate amount of low-cost housing proportionate to its population. The Malaysian average is 5.5% while Penang state is at 13.15% (low cost unit over total population).

The table above offers a clear and positive estimate for developers, buyers and investors in the years to come, clearing the horizon from possible cloudy forecasts in the form of a price bubble or drop in demand. (Refer to chart 3)

Chart 3: Current and future demand

Path for future potential growth

“Follow the economic growth drivers and the infrastructure.” This is the best thing a property investor can do. What is on Penang Island is quite easily seen.

As mentioned earlier, talking about the geographic and economic configuration, Penang Island can be viewed more as a retirement and holiday paradise where tourists will flock in from international shores to relax.

Keep in mind that the ratio between tourist arrivals and receipts generated has kept on growing at a favourable pace. (Refer to chart 4)

Chart 4: Tourist arrival and receipt value

Many of these tourists are looking for a short-term stay, spanning one week to three months at most and prefer to rent a medium or small house instead of living in a hotel.

Full facilities, nice locations and scenic views will be their decision drivers together backed by shopping amenities within the vicinity.

Looking at the infrastructure, we cannot miss the recently opened second link that will generate a new wave of residential and mixed-use developments.

It is sufficient to see how the first link has, since 1985, been contributing to the explosive development of the areas surrounding the landing point on the mainland to understand the high potential of this new “growth driver”.

Land nearby Batu Kawan and Jawi has more than doubled in value over the past few months from between RM7 per sq ft and RM10 per sq ft to between RM35 and RM45 per sq ft, and several developers are now fighting to secure prime positions for their future projects. No doubt the area has a very high potential in terms of accessibility and for sure, we will see interesting initiatives there taking off from the second half of this year.

Universities and big retailers, Ikea and the University of Hull just to mention the most recent developments, have been already acquiring space there as they are aware of the future direction for population growth while the developers’ planners are working on integrated townships that will offer houses with prices ranging from RM200 per sq ft up to RM500 per sq ft in the future.

Also, the proximity to the second link on the island, Batu Maung, Bayan Lepas or Teluk Kumbar, will profit with the Second Penang Bridge which will bring about a “property stage” that was in the past, dominated by George Town and Batu Feringghi.

Property market outlook

By looking into current values of residential properties in the northern areas of Penang Island, the possible growth will be within the range of RM200 per sq ft to RM400 per sq ft during the next two to three years (with 15% to 20% capital appreciation) as we cannot forget the type of buyers or the users of dwellings here. For the same reason, the (Return On Investment) ROI that smart investors will fetch in the area are surely going to be very attractive and on an uptrend for several years to come.

Mainland-wise, I’m personally looking forward to seeing the launch prices of properties located adjacent to the Second Penang Bridge take off in the next few months.

If entry values will be, as I’m expecting, below RM300 per sq ft, there will also be very good opportunities to profit from there and again, with more international schools, universities, retailers and businesses coming in as economic drivers, capital gain and yields will be, in my view, extremely attractive.

Different locations with property values are related to the future estimates of growth and will be offered on a “first come first serve” basis.

Do not think too long, otherwise these good and unique opportunities might be missed.

Source: StarProperty.my

Bayu Residencia, a collection of 14 exclusive 3-storey bungalow units within a guarded community in Bukit Mertajam, Penang. This development is strategically located along Jalan Bukit Tengah, with easy access to Penang bridge, Shopping malls, eateries and schools.

The bungalow houses come with land size ranging from 8,956 sq.ft. to 15,586 sq.ft. and build-up area from 4,887 sq.ft. onwards.

Property Project : Bayu Residencia
Location : Taman Tanah Aman, Bukit Tengah, Penang
Property Type : 3-Storey Bungalow
Tenure : Freehold
Built-up Area: 4,887 sq.ft. onwards
Land Area: 8,956 sq.ft. to 15,586 sq.ft.
Total Units : 14
Indicative Price: RM 2,200,000 onwards
Developer : PPB Hartabina Sdn. Bhd.