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Flat property market seen for Penang

February 23rd, 2019 No comments

Penang Property Market TrendsThe Penang property market is expected to remain flat yet resilient this year and could bottom out within the next two years.

CBRE|WTW Research in its Real Estate Market Outlook 2019 says it will be a buyers’ market over the short term, particularly for residential properties.

“Under the prevailing subdued market, launches of smaller, single phase developments would reduce in the short-term but larger integrated mixed developments or townships would carry on.

 “The property market is anticipated to remain generally soft and flat in 2019. This is in consideration of the challenging global and domestic economy, rising cost of living, as well as supply-demand imbalances, particularly in the high-rise residential sector.”

The property consultancy however adds that Penang’s property market still demonstrates resilience, aided further by recovery in the economy.

“Meanwhile, the current excess in supply will effectively be absorbed by the market. Benefits of reforms undertaken by the new government could also trickle down to the local property market.”

Raine & Horne Malaysia senior partner and FIABCI Malaysian chapter president Michael Geh says transactions and values will most likely remain flat, at best.

“As residential market activity, in terms of transacted units, has been falling over the last few consecutive quarters, at best the year-on-year levels will hold. In light of the overall soft market, property values are not expected to rise in 2019,” he tells StarBizweek.

Malaysian Institute of Estate Agents Penang chairman Mark Saw says the Penang residential market will see “some correction” this year.

“However, long-term planning on infrastructure improvements will go some way towards ensuring those locations currently only accessible by cars are better served with public transport.

“For those who have been holding back their launches the past few years, there may be a need to start selling, especially if land were bought on loans.”

He adds that measures taken by the state government will help to spur the Penang property market.

“With the waiver of the 3% approval fee for foreign purchasers starting from Feb 1, Penang must be seen to be investor friendly and foreign buyers should be encouraged to come.”

Saw says prices of landed property in Penang are unlikely to drop.

“However, the high-rise market will remain challenging and developers will need to continue to offer incentives as well as alternate options of home ownership.

“Developers with deeper pockets or less loans may look into rent-to-buy schemes in tandem with the recently-announced National Home Ownership Campaign by the government.”

Geh believes that both landed and high-rise units in prime locations will hold their values, while speculatively-purchased condominiums will be affected.

“Government announcements on transportation plans, infrastructure and stimulus plans are among actions that can help stimulate the Penang property market tremendously,” he says.

Easing overhang

CBRE|WTW Research says the overhang within the Penang residential property market is likely to ease over the next two to three years, with developers offering special packages and postponing launches, all of which would allow demand to catch up with supply.

“The medium to long-term outlook remains positive given that various policies and efforts are being undertaken by the government,” it says.

Office and retail markets

CBRE|WTW Research says pent-up demand for newer and prime offices persists in Penang.

“New supply of offices in Penang in the past ten years was limited. New prime purpose-built office buildings completed within the past three years such as HunzaTower and Straits Quay Commercial Suites are enjoying commendable occupancy rates, although charging new benchmark rentals.

“Newly set-up offices, as well as offices relocated from older office buildings, comprise the tenants in these new buildings. Office occupiers are seeking newer office buildings that serve their contemporary needs and enhance their corporate image.”

It adds that pent-up demand for newer and prime offices would continue in the short-term, as most of the upcoming purpose-built office buildings are scheduled for completion in year 2020 and beyond.

“Older buildings are likely to experience a slide in demand thus lower rentals and capital prices.”

CBRE|WTW Research says stable occupancy rates can be anticipated, adding that rentals will increase.

“As at mid-2018, the overall occupancy rate of purpose-built office buildings in Penang declined slightly to 77% from 82% year-on-year. Occupancy rates are anticipated to generally remain in the region of 80% in near future.

“Rentals of prime office space in Georgetown were between RM2.50 and RM3.50 per sq ft. Prime offices outside George Town, particularly newer buildings in Bayan Lepas/Bayan Baru and Tanjung Pinang (Tanjung Tokong), registered higher rentals of RM3.30 to RM4.50 per sq ft.”

Due to increasing maintenance cost, CBRE|WTW Research says rentals of office space in most buildings are expected to increase in the short term.

“The overall average rental of prime offices would also increase, pulled-up by new entrants with higher asking rentals.”

CBRE|WTW Research says the retail sector in Penang is likely to be flat, buffered by cautious optimism.

“Mixed performances will be more evident between the better and under-performing retail complexes, of which the latter is likely to drag down the overall occupancy and average rental rates.

“With abundant supply in the pipeline, shoppers can look forward to exciting shopping experiences.”

It says the overall occupancy rate stood at 72% as at mid-2018, with 79% for Penang island and 63% for Seberang Prai.

“Retail lots on the ground floor of selected prime retail complexes on the island commanded higher gross rental rates of up to RM45 per sq ft.”

Meanwhile, Geh says better-managed malls in prime locations are sustainable.

“These malls have sustained rental rates but vacancy factors have certainly increased by 5% to 10%.

“There is no oversupply but a rise in vacancy factors. Going forward, the general population’s purchasing trend remains cautious and wary of big-ticket items.”

Saw is less optimistic about the Penang retail sector, saying “this sector has been saturated for a few years and there is no end in sight”.

Source: TheStar.com.my

 

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Construction of Ayer Itam-LCE Expressway bypass to start on Aug 31

February 22nd, 2019 3 comments 中文版

ayer-itam-lce-expressway-pairroad

Construction of the 5.7km Ayer Itam-Tun Dr Lim Chong Eu (LCE) Expressway bypass, which would be part of the RM46 billion Penang Transport Master Plan (PTMP), will begin on Aug 31 this year, Penang Chief Minister Chow Kon Yeow (pictured) said yesterday night.

He said the commencement of the by-pass will mark the beginning of a comprehensive transport infrastructure plan to alleviate traffic congestion in the state.

Additionally, he said the state government had also approved one of the packages under the PTMP to be carried out by its developer, SRS Consortium within the first half of this year.

“This will definitely spur the construction sector and provide a lot of opportunities for companies in Penang associated with building and construction businesses,” he said when speaking at the Real Estate & Housing Developers’ Association (Rehda) Penang Chinese New Year dinner here.

State Housing Committee chairman Jagdeep Singh Deo who also spoke at the event said the State had agreed to Rehda’s request to extend the period for the exemption of a three percent levy on properties purchased by foreigners in the State until the end of June this year.

Initially, the deadline for the exemption of the approval fee imposed was until Feb 28, but it was said that many foreign buyers would not be able to enjoy the benefit as the period was deemed too short.

“The state government has reviewed the request by Rehda Penang, and we have agreed to extend the deadline to end of June, in line with the Federal home ownership campaign,” he added.

Source: EdgeProp.my

 

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Alma Signature

February 21st, 2019 No comments

alma-signature

Alma Signature, an industrial park development by Golden Success Development Sdn. Bhd. at Alam in Bukit Mertajam. This is a joint venture project by GSD Land and DSG Group. Located next to Alma Light Industrial Park near Jalan Rozhan, surrounded by a matured neighborhood. It is just a mere drives away from Tesco Hypermarket and Aeon Mall.

This development comprises 47 units of a light industrial factory, featuring 6 different design types.

Property Project : Alma Signature
Location : Alma, Bukit Mertajam
Property Type : Light Industrial factory
Built-up Area: (to be confirmed)
Land Area: (to be confirmed)
Indicative Price: (to be confirmed)
Total Units: 47
Tenure : Freehold
Developer : Golden Success Development Sdn. Bhd.

Register your interest here

*By submitting this Form, you hereby agree to our PDPA Consent Clause.
(This information may be used by the developer or their appointed agent to initiate follow-up communications with you on the project.)

Location Map:


 

 

Still no firm date for Penang tunnel construction

February 20th, 2019 6 comments

For illustration only

For illustration only

There is still no indication as to when construction work will start on the PenangUndersea Tunnel project, as the contractor is still waiting for the relevant land to be dredged.

“We are supposed to start in March, but the Penang state government’s land is not ready. Until we receive the land we won’t be able to start work,” said Vertice Bhd executive director Wong Kwai Wah.

Vertice is part of Consortium Zenith Construction Sdn Bhd (CZC), which has been awarded a RM6.34 billion integrated infrastructure project that includes the tunnel as well as the construction of three major roads and the development of the Seri Tanjung Penang.

Speaking after Vertice’s extraordinary general meeting (EGM) yesterday, Wong said the group plans to start work on the tunnel once the land that the Penang government has gazetted for the project is ready for construction. This land, situated on Gurney Drive’s foreshore, is currently being reclaimed by Eastern & Oriental Bhd (E&O).

Wong said the state government can only schedule construction for the tunnel once the land is made ready for construction.

“At the place where they construct, they have to give us sand. So unless the land is ready, we can’t move in as it would be risky for us,” he said.

Wong said based on conversations with E&O before the Chinese New Year, the land should be ready for handover to the state government in June or July.

However, he said the state government has not indicated whether the project’s feasibility study has been concluded, and when the group can start work.

“I think they (state government) are going ahead [with the project], but we suspect they are trying to get the federal government to support them,” Wong said.

He added that any development concerning the project would most likely be concentrated in the second half of this year.

Replying to a question, Wong said the group did not have to seek federal approval for the project. “Actually there are no more approvals [required]. We just want the state to get the land ready,” he said.

The tunnel, which is set to be 7.2km long, is to connect Gurney Drive on Penang island to the mainland.

Both CZC and the Penang government came under heavy criticism under the previous Barisan Nasional-led federal government prior to the 14th general election, which prompted an investigation by the Malaysian Anti-Corruption Commission into the project’s price tag and the RM305 million cost for the roads and tunnel’s feasibility studies. The choice of a tunnel instead of a bridge was also questioned, besides the project’s land-swap funding model.

Vertice, which holds a 13.21% stake in CZC, maintains that the consortium participated in an open tender by the state government and that it competed against 60 rival bids for the megaproject.

Source: EdgeProp.my

 

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UPCOMING: 90-acre Integrated Development at Balik Pulau

February 19th, 2019 No comments

proposed-development-ark-resources

An upcoming 90-acres mixed-use development with a minimum gross development value (GDV) of RM600 million by Ark Resources at Balik Pulau. It is close to the west coast of Penang Island, about 10 minutes drive from Balik Pulau town centre.

This development comprises a mix of commercial and residential properties:

  • 2-storey commercial blocks (2 units) & a bazaar
  • 2-storey terrace houses (276 units)
  • 2-storey semi-detached houses (214 unots)
  • 2-storey bungalows (91 units)
  • 16-storey condominium (2 blocks)
  • 16-storey low cost apartment (2 blocks)

This project is still pending for approval. More details will be available upon official launch.

Project Name: (to be confirmed)
Location: Balik Pulau, Penang
Property Type: Mixed development
Built-up Area: (to be confirmed)
Land Area: (to be confirmed)
Indicative Price: (to be confirmed)
Developer: Ark Resources

Register your interest here

*By submitting this Form, you hereby agree to our PDPA Consent Clause.
(This information may be used by the developer or their appointed agent to initiate follow-up communications with you on the project.)

Location Map: