The wind blows south-west

DESPITE the rising cost of land in Penang’s south-west district, the location is still drawing the attention of developers who are launching high-rise property there.

The prices of many units in the new developments start from RM450,000, considered as ‘affordable’ nowadays.

At present, the cost to build a condominium in the south-west district ranges from RM250 per sq ft to RM300 per sq ft, inclusive of land cost, which is currently hovering around RM100 to RM150 per sq ft — about 30% more than two years ago.

“It is still possible for developers to build homes within the RM450,000 to RM670,000 range in the south-west district, a price still considered affordable and reasonable on the island these days, and still make a decent profit despite higher land costs and development charges,” said Ideal Property Development Sdn Bhd chief executive officer Datuk Alex Ooi.

The current market price for a condominium in the south-west district is RM450 per sq ft, which means a 1,000sq ft unit will cost RM450,000.

The value of residential and commercial property in the south-west district is expected to escalate further when the RM4.5bil, 24-km second bridge, currently being constructed to connect Batu Maung in the south-west of the island and Batu Kawan in Seberang Prai, is completed in September.

Based on the current interest rates of 4.25% a year for housing loans, to pay the loan for a RM450,000 home, buyers would generally need a monthly income of RM6,000 to RM8,000.

“The income eligibility level for a RM450,000 loan is between RM4,500 and RM5,000 a month, but no one should borrow to buy a house unless they can pay for the loan, personal commitments, and save comfortably.

“Therefore, one needs a monthly income of, say, RM6,000 to RM8,000 to take up a RM450,000 loan for a property.

“The average monthly salary of an executive in Penang is between RM3,000 and RM4,000,” said a senior housing loan officer of a foreign bank in Penang.

“This is why it is very common for two or three names to appear on the loan documents and sales and purchase agreement for such a property.”

Ooi confirmed that it is not unusual for two or more people to combine resources to buy a property, as more than two names often appear on the sale and purchase agreement.

The south-west district, however, is not just an address for an affordable range of residential properties.

It is also the location where Mah Sing Group Bhd is developing the RM2.09bil Southbay City project on an 87-acre site in Batu Maung. The project is being designed to accommodate a resort with shopping facilities, offices and residential suites.

This year the south-west district, which covers residential-cum-commercial neighbourhoods such as Relau, Batu Maung, Bukit Jambul, Bayan Lepas, Sungai Nibong and Teluk Kumbar, will see Penang and Kuala Lumpur developers undertake the development of RM4.19bil worth of residential properties in Bayan Lepas and Sungai Ara.

Ideal Property is undertaking the development of RM3.3bil worth of residential and commercial properties in the south-west district over the next five years.

Ooi said a total of 3,529 condominiums and 200 units of shop offices will be developed for two separate schemes over a five-year period.

“The Ideal Vision Park, to be located on a 25-acre site in Bayan Lepas, will have 1,945 condominiums and 150 shop offices, while the Sungai Ara project on a 19-acre site will have 1,584 condominiums and 50 shop offices.

“Ideal Vision Park will have a gross development value (GDV) of RM2bil while the Sungai Ara project will have a GDV of RM1.3bil. The project consists of four phases to be launched in stages over a five-year period, while the Sungai Ara project will have three phases.

“Both the projects will be launched after the Chinese New Year,” he said.

Ideal Vision Park is based on the “slow-city” concept, which originated from Orvieto City in Italy.

“Development projects based on the ‘slow-city’ concept promote healthy living, environmentally friendly practices, preserving traditional trades and cuisine and, generally, an improved quality of life for residents. In a slow city, residents can avoid the hustle and bustle of traffic congestion as well as air and noise pollution.

“They enjoy tranquility during a long walk or a relaxing bicycle ride through greenery-filled lanes. They live, work and play in comfortable and cosy residential areas where dining, shopping and socialising are given,” Ooi said.

Currently, there are 142 “slow” cities in 24 different countries where developers have adopted the concept.

According to Ooi, Ideal Vision Park will feature a two-acre park with bicycle lanes and dedicated walkways to reduce traffic congestion and pollution.

“There will also be a mall, consisting of 70 to 80 commercial lots, for retailers to promote local and foreign brands, traditional craft shops, authentic cuisines, fine dining and boutique cafes to allow visitors to customise their shopping experience. The commercial lots are for rent,” Ooi said.

The condominiums for Ideal Vision Park and the Sungai Ara projects, with built-up areas of between 900sq ft and 1,500sq ft, are priced at about RM450 per sq ft.

Ooi added that next year, the price per sq ft of a condominium in the south-west district is expected to go up to RM500.

Ooi said Ideal Property will also be developing 1,314 low-cost apartments.

“The units are 650sq ft each and are priced at RM42,000. They will be built in the south-west,” he said.

This year, SP Setia Bhd is also undertaking the development of the recently launched RM290mil Setia Pinnacle in Bayan Lepas, consisting of 434 condominiums, and the RM600mil Setia Sky Vista in Relau, comprising 800 condominiums, scheduled to be launched in the second quarter.

“The built-up areas in Sky Vista range between 900sq ft and 1,500sq ft, while the built-up areas in Setia Pinnacle range between 1,100sq ft and 1,500sq ft.

“All the residential units are priced around RM450 per sq ft,” said SP Setia (Property North) general manager Khoo Teck Chong.

Next year, SP Setia plans to launch more affordably priced projects in the south-west district, such as the RM64mil Setia Sky Cubes in Teluk Kumbar, comprising 98 condominiums with built-up areas between 1,300sq ft and 1,700sq ft, as well as the RM500mil Setia Sky 8 and Setia Sky Breeze in Bayan Lepas, comprising 535 condominiums and 450 condominiums, respectively.The GDV for Setia Sky Breeze has not been fixed yet.

Next year SP Setia also plans to launch the RM150mil Setia Raintree Residences project in Balik Pulau, comprising 184 terraced, 34 super-link, and 16 semi-detached houses.

Both the high-rise and landed properties to be launched next year are expected to be priced from RM500 per sq ft onwards.

Landed properties launched five years ago in Setia Pearl Island, Bayan Lepas, are now transacted for more than RM1mil in the secondary market, compared to the initial price of RM650,000.

To add value to the properties in the south-west district, Mah Sing Group Bhd plans to start, also next year, the development of the next phase of commercial components for the RM2.09bil Southbay City project.

“Southbay Point is designed to accommodate retail and lifestyle offices, while the Southbay Wharf will be a seafront lifestyle mall. We are also planning for Southbay Central, which will hold a lifestyle mall, offices and residential suites, and Southbay Lodge, which will either be a hotel or a resort.

“This phase will be developed over the next six years,” said Mah Sing chief operating officer Teh Heng Chong.

Southbay City, covering 87 acres, is the highlight of the group’s Southbay project, which encompasses Residence@Southbay and Legenda@Southbay.

“In the second half of this year, we will launch sea-fronting residential suites called Southbay Loft. The built-up areas of the units will range between 1,000sq ft and 1,800sq ft,” he said.

Last year, Mah Sing launched Southbay Plaza — two towers of residential suites connected by a retail podium, Trends@Southbay, comprising one- to three-storey retail shops.

The Southbay Plaza residential suites were sold from RM850 per sq ft onwards.

“The lifestyle boutique retail mall offers shoppers and tourists access to exclusive designer brands as well as major retailers.

“Casual diners will also appreciate the variety of international restaurants and cafes lined up across the development.

“The great thing about Southbay City is that you’re not only buying a residential suite, shop, or even a retail unit in a mall, you’re actually investing in an integrated commercial development, which is the very first project to greet visitors entering via the second Penang bridge.

“You’re buying into the masterplan which combines several investment-grade components that complement each other,” Teh said.

Mah Sing says, to date, it has sold about 10% of the GDV of the Southbay City development. - The Star