Special Report Penang Property: Zooming in on Seberang Perai - My Space: Bridge to growth

TO say that the opening of the Second Penang Bridge has injected new life into the real estate potential of Seberang Perai is an understatement.

While the ordinary property investor is still debating to what extent the area’s prospects will be boosted by the enhanced accessibility, Seberang Perai has been on the radar of astute property developers since the second bridge project was announced back in 2006.  

Naturally, interest from developers grew when work started, and it intensified with the completion of the bridge coupled with indications of the Penang government’s commitment to develop the mainland. The bridge, spanning 24km and costing RM4.5 billion, was opened to the public on March 1.

As it stands now, the landscape in the mainland is a far cry from the hustle and bustle of Penang island. A good portion of it is covered in plantations and vegetation, reminiscent of how a stretch of Jalan Damansara in Kuala Lumpur — between Bandar Utama and the junction with Jalan Kepong — used to be like in the early 1980s. A recent trip to the mainland shows that the area is still primarily agricultural, even in Batu Kawan, where one end of the second bridge sits.

Meanwhile, established and high-profile developers based outside Penang have been flocking to the mainland. So, one can expect the unveiling of interesting and creative development concepts that will spice up the market there.

Generally speaking, land prices in the mainland, although they have moved up in recent years, can still be cheaper by more than half that on the island. This would make homes in the mainland a lot more affordable and attractive, thanks to the second bridge.

Those who cannot afford to own a home on the island can now look at the mainland as an alternative. At the same time, property owners on the island looking to cash out can relocate to the mainland with a hefty bank balance to boot.

However, not everyone on the island would be willing to make the mainland their home despite the enhanced accessibility.

The appeal of the island — apart from having all the amenities city dwellers would want — lies in a unique blend of heritage, art and culture, and food. The island’s attractions have been drawing tourists in increasing numbers, both from within and outside the country, especially in recent years. Many KLites are known to own weekend homes on the island.

On the part of the state government, efforts to promote Penang island are ongoing, such as featuring Penang in a popular Chinese serials screened on Astro Wah Lai Toi.

A growing expatriate community and rising tourist arrivals, meanwhile, have led to the mushrooming of boutique hotels, quaint cafes and eateries. Some of these have, in turn, become attractions on their own.

Will such activities migrate to the mainland to take advantage of the significantly cheaper real estate costs? I don’t think so.

Here’s why. Interestingly, the value of an address is tied to how sexy it is deemed to be. A loose measure of that would be how popular the preferred address is. The location factor is important as are accessibility, amenities and the profile of residents.

Take Damansara Utama in Selangor. For a very long time, real estate values in the development remained inferior to those of its neighbour Bandar Utama, just beside it, and Taman Tun Dr Ismail, located across the road.

It has only been in the last 10 years or so, thanks to a surge in demand for landed homes, that prices in Damansara Utama have managed to narrow the gap with those of its neighbouring developments.

Property prices on Penang island, which is more established in the eyes of investors, will stay ahead of prices in the mainland. Considering the development game plan unveiled thus far by the state government, one can expect more excitement on the real estate scene, both on the island as well as the mainland.


Au Foong Yee is managing director of The Edge Communications Sdn Bhd 


This article first appeared in The Edge Malaysia Weekly, on April 21 - 27, 2014.

E&O bullish about Seri Tanjung Pinang project

EASTERN & Oriental Bhd’s unit Tanjung Pinang Development Sdn Bhd can look forward to getting the go-ahead from the Penang government for its Seri Tanjung Pinang (STP) phase two project if it complies to all the technical and regulatory requirements for the project.

In an interview at the Chief Minister’s office in Komtar recently, Penang Chief Minister Lim Guan Eng says as long as the developer complies with the conditions and requirements, the state government will grant approval.

Under a concession agreement signed in 1990 by the previous state government and the company awarded the concession to undertake the reclamation and development of the land in Tanjung Tokong in the north-east coast of Penang, there are a number of terms and conditions for the project’s approval.

“If the terms and conditions are fulfilled by the developer, the state government will have to respect the sanctity of the agreement, otherwise it will have to pay compensation to the developer for non-compliance,” Lim says.

On April 10, the Department of Environment, Ministry of Natural Resources and Environment (DOE) granted a conditional approval for the detailed environmental impact assessment study and conceptual masterplan for the proposed STP phase two.

The proposed reclamation for STP phase two involves 760 acres of man-made islands and 131 acres of the Gurney Drive foreshore that will be handed over to the state government for infrastructure development of a new expressway, a new Gurney Drive Promenade and a parallel linear park for public recreational purposes.

Given that the state’s approval is still pending and the tender process yet to commence, analysts say the proposed reclamation work for the 891 acres of the STP phase two is expected to begin only early next year.

Reclamation works are expected to take two years and the first launch assumed to commence towards the end of the reclamation works, possibly in the second half of 2016.

Responding to queries from StarBizWeek, E&O managing director Datuk Terry Tham says E&O is now proceeding to make the necessary applications as required by the relevant authorities in respect of the proposed STP phase two development plans.

Tham gave the assurance that E&O will continue to give full compliance to all regulatory requirements, as it has done with the first phase of STP.

“Going forward, E&O is fulfilling its rights and obligations as set out in the concession agreement for the reclamation of STP phase two.

“The proposed STP phase two is of significant size, hence the conditions set out by the DOE are to ensure that the project is carried out in an environmentally responsible manner, consistent with the prevailing regulatory framework,” Tham points out.

The DEIA approval is conditional upon the following terms:

·It is applicable only to the proposed reclamation of 760 acres of man-made islands and 131 acres of the Gurney Drive foreshore, and dredging activities at the “flushing channel”;

·The provisions of the Environmental Quality Act, 1974, must always be complied with;

·The proposed STP phase two must be in line with the project concept stated in the DEIA and is subject to the approval of separate environmental impact assessments by DOE for activities prescribed under the Environmental QualityOrder (Prescribed Activities) (Environmental Impact Assessment) 1987;

·The necessary approvals from the state government and relevant government departments must be obtained before the proposed STP phase two is implemented;

·The DEIA approval conditions and recommendations of the DEIA consultant must be incorporated as conditions of tender documents and contractual agreements, to be fulfilled by any contractor/subcontractor involved in the implementation of the proposed STP phase two;

·The DEIA conditional approval is valid for two years from the date of issuance; and

·All works to be undertaken in the proposed STP phase two must further comply with specific work-related requirements and specifications as set out, including reporting obligations under the relevant laws and regulations.

New lease of life

Tham says that in addition to the 60 acres on STP phase two that will be reclaimed and surrendered to the state government, E&O is also reclaiming 131 acres along Gurney Drive to be handed over to the state.

“This land is for the state government to use for the benefit of the people of Penang. A linear park along Gurney Drive has been proposed as part of the 131 acres,” he says.

E&O is not the first developer involved in the reclamation and development of the land.

The project’s history can be traced back to 1980’s, when it started off as a joint venture between Permaijana Ribu (M) Sdn Bhd (owned by UEM Bhd, Penang Bumiputera Foundation and Magma Bhd) and Koperasi Gabungan Negeri Pulau Pinang and Penang Development Corp.

The original project proponent faced a challenging start and reclamation works were twice abandoned due largely to the Asian financial crisis.

In 1992, Tanjung Pinang Development Sdn Bhd was granted the concession to undertake the project. The reclamation of Seri Tanjung Pinang phase 1 commenced in 1997 (not by E&O). Within the same year, works were suspended due to the Asian financial crisis. In 1999, reclamation resumed only to halt again in 2000. The project was left idle for the next three years.

E&O came on board in 2003 to revive the existing but abandoned project, and Tanjung Pinang Development became a subsidiary of E&O. The project is now known as the masterplanned seafront development Seri Tanjung Pinang by E&O.

Reclamation for STP phase one comprising 239 acres was completed in 2005, and within the same year the first homes were launched. To-date, about 2,500 housing units have been completed at Seri Tanjung Pinang worth an estimated gross development value (GDV) of RM4bil.

In 2011, the Penang government granted in-principal approval to reclaim the proposed STP phase two. The second phase is expected to generate some RM25bil in GDV.

The project had been incorporated as part of the National Physical Plan 2007-2020 as well as the Penang State Structure Plan 2020.

During the interview with the Chief Minister on Penang’s development, Lim gave the assurance that the state government will ensure a holistic and balanced development model for the state, and one that is not too commercial.

“For example, we will preserve landmark historical and heritage sites, like the Penang Esplanade, and will not allow the development of this landmark historical site for commercial purposes,” Lim says.

The founder of Penang, Captain Francis Light, a former Royal Navy midshipman and trader, who founded Penang in 1786, had landed on a point somewhere at the Esplanade. The Esplanade, which can be regarded as the growth centre from which Georgetown developed and expanded, is today an important venue for many of Penang’s important events, including the Merdeka Parade on August 31.

The state’s efforts to preserve the heritage, cultural and historical sites will be in line with the 2008 inscription of the inner city of Georgetown as a Unesco World Heritage Site.

With the right concerted efforts between the state and industry players to ensure a proper balance between the built and unbuilt environment for Penang, and an integration of the old world charms with new neighbourhoods like Seri Tanjung Pinang, Penang will be assured of a place among the handful of well-regarded liveable international cities of the world. - The Star

Developers' focus shifts with the opening of the second Penang bridge

DESPITE a softening property market on Penang island and Seberang Prai, Kuala Lumpur and Penang-based developers will be undertaking projects to the tune of RM4.56bil this year, a check with various developers show.

The island, however, is seeing fewer residential property launches due to land shortage, higher land cost and a challenging property market environment. Nevertheless, Raine & Horne director Michael Geh says the gross development value (GDV) of the projects launched on the island this year will still be higher.

Geh says the price of vacant land in Batu Maung has increased to RM250-RM300 per sq ft.

Of this RM4.56bil, about RM1.86bil will be residential and commercial projects planned in Seberang Prai, while the remaining RM2.7bil will be on the island.

Although in value terms the island will have a lion’s share, much of the focus is expected to be on Seberang Prai, located on Peninsular Malaysia.

To a large degree, the focus on Seberang Prai has been triggered by the announcement of the second bridge by Malaysia’s fifth prime minister and Penangite Tun Abdullah Ahmad Badawi in the Ninth Malaysia Plan in August 2006. Since then, property prices in Seberang Prai and on the island have risen significantly. One can consider 2006 as the watershed where Seberang Prai is concerned.

The opening of the RM4.5bil second Penang bridge on March 1 is also expected to spur a second wave of interest.

The connectivity is expected to boost retail, for a start. There are 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 in Seberang Prai.

Fook says land prices in south Seberang Prai has jump to RM40-RM50 per sq ft.

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

Residential development is also expected to improve with the entry of big players into that area in terms of style and design.

Last December, Mah Sing Group Bhd acquired 30.9ha in Jawi, comprising 20 pieces of prime freehold contiguous land, for RM400mil. Its group managing director and chief executive Tan Sri Leong Hoy Kum says the group plans to introduce an integrated township called Southbay East.

Leong says the township is currently at the planning stage. He says the freehold township located just 6.6km from the Jawi toll plaza on the North-South Expressway is expected to attract those who work and live in Southbay East’s immediate surroundings. The property developer is proposing linked homes, semi-detached units and town houses. There will also be a club-house.

But land prices may become an issue. Henry Butcher Seberang Prai’s associate director Fook Tone Huat says vacant land prices in the area, especially those in south Seberang Prai where the second bridge is located, are now hovering between RM40 and 50 per sq ft, a huge jump from 2006’s RM8-RM9 per sq ft.

Land prices in Central and North Seberang Prai were then between RM20 to RM40 per sq ft, compared with today’s range of between RM50 and RM100 per sq ft. The increase in land prices has translated into higher property prices.

“New landed properties such as double-storey terraced units in South Seberang Prai are now priced between RM350,000 and RM400,000 compared with between RM150,000 and RM200,000 prior to 2006,” Fook says.

Double-storey terraces in prime locations in Central and Northern Seberang Prai have doubled from RM200,000-RM270,000 range to RM400,000-RM600,000.

“We are also seeing a lot of life-style condominium projects being planned in Bukit Mertajam this year with new units priced at at around RM300 per sq ft,” Fook says.

As for the secondary or sub-sales market, double-storey terraced houses have a wide price range of between RM250,000 and RM500,000, depending on location.

Landed properties in the sub-sales segment command the best pricing in Bukit Mertajam and Butterworth town.

Despite the interest in Seberang Prai, Fook expects the volume of property transactions to soften this year, due largely to the difficulty in obtaining housing loans.

“There will definitely be fewer transactions this year compared with about 12,000 registered for 2013.

“Since January, we have seen fewer enquiries for primary and secondary market properties as the rejection rate of housing loans is currently at about 60%. Property prices are expected to remain more or less the same as last year,” Fook adds.

Real Estate and Housing Developers’ Association (REHDA, Penang) chairman Datuk Jerry Chan says due to the tightening of bank loans, he expects the volume of property transactions to decline by about 30% this year.

“The overall transacted value will also fall by about 20%,” he says. Raine & Horne’s Michael Geh expects properties in the secondary segment to remain stable, while those in the primary market might soften slightly.

“There will definitely be a dip in the volume of transactions, due to the stringent loan conditions,” Geh says.

Despite issues about buyers getting the margin of financing they would like to have, this does not seem to have deterred developers from entering the Seberang Prai market in a fairly big way.

DNP Land, which is part of Singapore’s Wing Tai group, will be developing a RM250mil condomonium project known as Bukit Mertajam Mahkota and the RM550mil Jesselton Hills landed property scheme in Bukit Mertajam, located in Central Seberang Prai. Tambun Indah Land Bhd is also planning RM616mil worth of landed property launches for Bukit Mertajam and Pearl City in Simpang Ampat, south Seberang Prai.

DNP Land (North) general manager K.C. Tan says the Bukit Mertajam Mahkota project will be the town’s first high-end condominium development. As for Jesselton Hills in Alma, it will have 200 units of semi-detached and terraced houses.

“The projects are strategically located 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 from Kedah, especially from Kulim High Tech Park, as Bukit Mertajam is the main connecting point between Penang and Kedah,” Tan says.

IJM Land, known for its Penang island Light project, is also 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. One of Kuala Lumpur’s heavyweight, Sunway Bhd is also planning 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 October.

Sunway Bhd general manager Tan Hun Beng says the group will be launching more properties in Seberang Prai as the lower land prices there has allowed the group to price its properties affordably. In June this year, Sunway will launch the RM80mil Sunway Cassia third phase, double-storey semi-detached and three-storey terraced houses, in Batu Maung, in Seberang Prai.

The focus on Seberang Prai, by no means, mean that there is less interest on the island. In fact, property prices have grown by leaps and bounds the last several years. This year, however, will see less launches of landed units, due largely to land shortage and high prices.

Raine & Horne Malaysia director Michael Geh says the price of vacant land has increased to around RM250 to RM300 per sq ft in Batu Maung in the southern part of the island, where the second bridge is located, from about RM50 to RM60 per sq ft prior to 2006. This effectively means that in just eight years, land prices have increased by 400%.

However, Geh also says land prices depend on what the land is being zoned for, whether it is agriculture, commercial or residential usage. This increase in land prices coupled with other factors have resulted in higher property prices.

New two- and three-storey terraced houses on Penang island now cost about RM1.2mil in the south of the island, compared with about RM450,000 prior to 2006.

“New condominiums in similar locations are now priced at RM700,000-RM800,000, compared with RM250,000-RM300,000 prior to the second-bridge announcement in 2006. In the prime locations of the north-east districts such as Tanjung Bungah, Tanjung Tokong, and Pulau Tikus, new lifestyle high-rise units start from RM800,000 onwards, doubled what it used to be in 2006,” Geh says.

How sustainable are these prices? The reponse to launches will be an indication.

Eastern & Oriental Bhd will be launching its RM800mil Andaman Edition 18 East condominium scheme on the island in the first half of this year. IJM Land will introduce its RM125mil Trehaus@Bukit Jambul. This comprises condominium villas and semi-detached villas, and a yet-to-be-named medium and low-medium cost project, which has a RM177mil GDV, in the fourth quarter of this year.

S P Setia will launch in the second half the RM300mil Setia Sky Vista, a condominium project, in Relau.

These launches will be keenly watched.

City & Country: Consumer confidence props up residential market

PRICES in Penang’s residential market continue to rise, although the overall volume of transactions has fallen, says Raine & Horne International Zaki + Partners director Michael Geh when presenting the Penang Housing Property Monitor for 4Q2013. This was gleaned from the National Property Information Centre’s data for Penang from 1H2010 to 1H2013, he adds.

In 1H2010, transactions on the island’s primary and secondary markets totalled 8,301. Sales grew to 13,832 in 1H2011, but declined to 11,889 in 1H2012 and 8,547 in 1H2013.

“The fourth quarter of 2013 saw a continuous downward trend on the primary and secondary markets in terms of units sold,” remarks Geh. “One of the main reasons was that loans were hard to come by. This factor alone pulled the Penang developer-direct market down during the quarter. The secondary market was still active, but a little down in terms of units sold.

Geh: There was good take-up of anything less than RM500,000 as people are looking for affordability now. I would describe the market as price-sensitive.

“There was good take-up of anything less than RM500,000 as people are looking for affordability now. I would describe the market as price-sensitive.”

The 4Q2013 data shows there was double-digit year-on-year price growth in many of the areas sampled, which could spill over into 1Q2014.

“January would have seen strong activity because Penangites who work overseas or in KL come home for the Chinese New Year holidays and usually purchase properties for their family or help them upgrade,” Geh explains.

Overall, consumer confidence is strong, he comments, attributing this to the soon-to-be-opened second bridge, the RM1.25 billion worth of investments pumped into the state by the federal government and the opening of IKEA and the Penang Designer Village in Batu Kawan, among others. News that Sunway Bhd is buying acres of land on the island from Lee Rubber Co Ltd, which, once developed, will have an estimated gross development value of RM1.5 billion, has also boosted optimism in the property market.

As a result, consumers are on the hunt for good buys in the Penang housing market, says Geh, highlighting several hot developments and areas on the island and the mainland.

One is E&O Bhd’s Seri Tanjung Pinang in the northern part of the island while the 152-acre The Light Waterfront by IJM Land Bhd is another. Parts of the latter, which is very close to the first bridge, have been completed and handed over to the owners. According to Geh, The Light Waterfront properties have seen a lot of rental activity and secondary market sales in the last three to four years.

In the south, near the second bridge, Teluk Kumbar and Teluk Tempoyak are creating a buzz, he says, adding that areas south of Butterworth, such as Juru, Bukit Tambun, Batu Kawan and Sungai Bakap, are getting much attention, also thanks to their proximity to the second bridge.

A view of Penang taken from Komtar Tower

State housing policy and auctions
While the outlook is rosy, a possible roadblock is the state government’s new housing policy to curb speculation. It states that properties priced RM400,000 and below on the island and RM250,000 and below on the mainland can only be sold after the fifth year of purchase. There are also restrictions on the resale of low-cost (RM42,000) and low-medium-cost (RM72,500)homes within the first 10 years of purchase.

Then, there is the 3% levy on purchases by foreigners and 2% levy on the seller of any property within three years of the date on the sale and purchase agreement. The new policy was to have taken effect on Feb 1, but has now been postponed to March 1. However, the 3% levy, on top of the 30% Real Property Gains Tax, on foreign buyers took effect this month.

Geh feels that the new policy will impact the Penang residential market, although it is too early to say by how much exactly.

In 4Q2013, house transactions in the mature residential areas of the island were still strong. According to Geh, this was because people wanted to buy houses that were near their family homes or place of work.

Besides buying on the primary and secondary markets, Geh advises homebuyers to consider auctions. However, this can be a tedious process. “Auctioning is slow because the people who really need a house or want to buy something don’t get the relevant information easily to make a purchase,” he explains. “Information is not easily disseminated, like through a website, and people still need to look through the newspapers. It is still an adventure. When auction information is offered to purchasers efficiently, the market will get off the ground.”

Fourth-quarter performanceThe 4Q2013 Penang housing property monitor shows that the prices of houses in well-established suburbs continued to grow quarter on quarter while in other areas the prices held steady.

The prices of 1-storey terraced houses in Green Lane, for example, rose to RM650,000 for the highest q-o-q growth of 13.85% compared with such homes in the other areas sampled. Development in Green Lane began in the 1960s, transforming the small farming village into a bustling neighbourhood. One-storey terraced houses in other areas that showed price growth include those in Jelutong (+12.31%), Sungai Dua (+7.69%), Bandar Bayan Baru (+6.25%) and Sungai Ara (+4.76%).

Y-o-y, all types of houses cost more in the areas sampled except two. The prices of 1-storey terraced houses in Seberang Perai Tengah dropped 6.25% to RM160,000 while those of 2-storey terraced houses in Sungai Ara held steady at RM750,000.

Demand for houses in Seberang Perai Tengah is much less than that for houses in other areas of Seberang Perai, says Geh, adding that houses to the west of Bukit Mertajam, nearer Perak, are considered hot. The areas to the east of Bukit Mertajam are less developed, he points out, although it is just a matter of time before development reaches there and has a positive effect on prices.

As for Sungai Ara, Geh finds it to be a very stable residential area. “It is like Subang Jaya or Cheras, where property prices don’t go up or down quickly.”

Rents and yields in 4Q2013 remained relatively stable q-o-q and y-o-y. “Market values were at a record high in 4Q, so rents did not go up much on account of affordability. Thus, yields did not increase,” Geh points out. “In some places, yields came down but values went up. Rents cannot be increased in line with capital values because this could lead to tenants moving out.”

Penang’s housing market continues to be strong on the island and mainland. Will it react to the state’s new policy that takes effect on March 1? Only time will tell.


This article first appeared in The Edge Malaysia Weekly, on February 14, 2014.

BN government will pump RM1.25b into Penang projects this year

GEORGE TOWN: Determined to demonstrate that it is not side-lining Pakatan Rakyat-held Penang, the Barisan Nasional (BN) federal government has decided to pump in some RM1.25 billion in projects in the state this year.

Federal Action Council for Penang chairman Datuk Zainal Abidin Osman announced yesterday a slew of 19 new projects, mainly for traffic infrastructure and health, as well as a few for education, to commence this year.

Zainal, who is also state Umno chairman, stressed that these new projects are in addition to 24 projects worth a total of RM5.1 billion that have already been completed in 2013 — including the 24km Second Penang Bridge.

He said the RM4.5 billion bridge is scheduled for opening next month by Prime Minister and BN chairman Datuk Seri Najib Razak at a yet-to-be-determined date, following some final minor installations.

“All these show that the federal government is not marginalising or neglecting the people of Penang,” he said at a press conference at the federal building here.

“We are definitely concerned about improving the prosperity of Penangites.”

The projects slated for this year include an RM400 million multi-storey block with space for 331 beds at the Seberang Jaya Hospital, an RM250 million new wing for women and children at the Penang Hospital, an RM205 million upgrading of the narrow road between Teluk Kumbar and the Penang International Airport, and an RM60 million new flyover in Batu Maung at the southern end of the Bayan Lepas Free Industrial Zone.

Asked about the status of affordable housing projects under the federal PR1MA Corp Malaysia that were announced for Penang early last year, Zainal insisted that the projects are still on for implementation in next two years.

He stressed that the issue of confirming the sites is not easy in view of limited available land in Penang.

“In the process, we will have to get approval from the State Planning Committee (chaired by Chief Minister Lim Guan Eng). We therefore hope to get cooperation from the state government in this regard,” he added.

Zainal said the federal government is certain to develop 10,000 units of houses through PR1MA, as announced by Najib, and another 10,000 by federal agencies like the Penang Regional Development Authority, UDA Holdings Bhd and JKP Sdn Bhd.

Najib had on April 30 last year — five days before the last general election — announced 9,999 affordable housing units in Penang.

On Aug 28, almost four months after the BN retained control of the country, PR1MA announced that 20,519 affordable homes will be built in Greater Klang Valley, Johor, Penang, Sabah,  and Sarawak.

However, the Penang government has complained that its enquiries for details on the units in the state have failed to elicit response from PR1MA or the Urban Wellbeing, Housing and Local Government Ministry. 


For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.


This article first appeared in The Edge Financial Daily, on January 29, 2014.

UBB, Ideal Property plan RM1.5bil projects in Penang

GEORGE TOWN: United Bintang Bhd (UBB), an importer and exporter of used and reconditioned heavy machinery, will pursue property development plans in Penang under the direction of its new majority shareholder, Datuk Alex Ooi.

Ooi, who now owns 32% of UBB, is the executive chairman of UBB and chief executive officer of Ideal Property Group.

He said UBB would work with Ideal Property Group, a Penang-based developer with 12 years of experience in the business, to pursue some of these projects, as the latter owns about 80ha of landbank on the island, located largely in the south-west district.

“We are looking at building more condominium properties priced between RM500,000 and RM700,000 per unit.

“The plan for this year is for UBB and Ideal Property Group to jointly launch some RM1.5bil worth of such projects on the island in the second half of 2014,” he said.

UBB is also looking to tap into the growing tourism market in Penang, which has attracted some six million visitors since it was declared a Unesco World Heritage Site in 2008.

“We plan to take this opportunity to invest in the development of new tourist attractions in the coming years as part of our diversification strategies, which include building a theme park in Penang.

“To cater to the increasing number of tourists in Penang, we plan to build two new hotels in Bayan Baru,” he said.

Ooi said UBB saw more future benefits for its shareholders from the development of high-quality premium development projects.

“This initiative will consolidate, strengthen our current finances and transform UBB and Ideal Group into one of the top property developers in Penang.

“With new funds, we want to be more than just a property developer. Being a Penang home-grown developer, Ideal Property wants to create a legacy for Penang, not by encouraging the appreciation of asset values but build properties that promote great appreciation of life for the next generations to come with great emphasis on wellness,” Ooi added.

He added that UBB’s board of directors had already endorsed the change of UBB’s name to Ideal United Bintang Bhd (IUBB).

The name IUBB has been approved by the Companies Commission of Malaysiaand is now waiting for the shareholders’ approval at the forthcoming EGM. - The Star

水晶花园共管机构起诉两造 禁止银行拍卖土地

（槟岛西南区21日讯）水晶花园（Krystal Garden）高级住宅区共管机构今日召开特别大会通过两项动议，首项动议是要求联邦直辖区报穷局以清盘师的身份，起诉伊斯兰银行和槟州土地及矿物局以解除土地抵押令，禁止银行拍卖住宅区土地。

丹 绒区国会议员黄伟益指出，有关发展商REKA MESRA有限公司已於2010年清盘，联邦直辖区报穷局作为该公司清盘师。但该公司早在2004年1月，将该住宅区的土地抵押给伊斯兰银行，而该银行於 今年7月31日在英文报刊登告示，指银行将根据1965年国家土地法典赋予的权力拍卖有关土地，所有在该土地上建构的房子将被清拆。

“共管机构於是召开特别大会动议通过报穷局以清盘师的身份起诉上述两造，以解除抵押令禁止银行拍卖有关土地。”

不过他说，有关诉讼是“友善”性质的，所有购屋者受促联络该银行或律师以呈上相关文件，以确认个别的产业拥有权状况，包括已赎回、局部赎回或完全未赎回自己的产业。

“至于第二项动议是一旦抵押令解除并取得总地契后，共管机构会聘请测量师申请分层地契。屋主们也同意共同负担第一项动议的2万令吉诉讼费和第二项动议的3万令吉测量费。”

黄伟益是在该共管机构特别大会后，和理事们召开记者会发表以上谈话。他受询时表示，此次召开的特别大会已超过法定人数，所以是合法的。- 光华

Penang’s new housing rules to start in February

GEORGE TOWN: The new housing rules that will be implemented by Penang next February are definite, even as discussions are being held with the various stakeholders, said Chief Minister Lim Guan Eng.

He said briefings were being conducted for the Bar Council, banks, property developers both in and outside of Penang and other stakeholders to update them on the new housing rules.

Under the new rules, all low-cost (up to RM42,000) and low-medium cost (up to RM72,500) houses cannot be resold for up to 10 years from the date of the sale and purchase agreement (SPA). This 10-year rule covers all past and future purchases.

In addition, houses that were initially purchased at a cost below RM400,000 on the island as well as below RM250,000 on the mainland cannot be resold for five years if the SPA is signed on or after Feb 1 next year. - The Star

Sunway wins RM267mil land bid in Penang

KUALA LUMPUR: Sunway Bhd through its wholly-owned subsidiary, Sunway City (Penang) Sdn Bhd, won the bid for four parcels of land at RM267.4mil in North East district, Penang, from C. H. Williams Talhar and Wong, the property agent forLuxor Precision Sdn Bhd.

Sunway, in a filing with Bursa Malaysia yesterday, said the parties will enter into a sales and purchase agreement for the proposed acquisition, including existing buildings, plant nurseries and other structures on the land, within 14 days from the date of the notice of acceptance of Dec 16.

It said the proposed acquisition would provide Sunway with an estimated gross development value of RM1.5bil when fully developed, as the land was strategically located within the vibrant centre of Penang Island and surrounded by tourism spots as well as mature residential townships.

It added that the proposed development for the land consisted of commercial shops, small office home office and high rise residential units and that it would strengthen Sunway’s presence in the Penang property market.

On prospects, it said residential and commercial properties in Penang, especially on Penang Island, had good potential due to scarcity of land and continuous strong demand. – Bernama 

Penang to weed out squatters, illegal hawkers and structures

THE Penang government will come down hard on illegal hawkers, illegal buildings and encroachment of state land next year.

State executive councillor Chow Kon Yeow (DAP-Padang Kota) said a committee has been formed to tackle the matters.

He said he had instructed the Penang Municipal Council (MPPP) and Seberang Prai Municipal Council (MPSP) to list out the problems and come up with solutions.

Chow, however, pointed out that the state government was not out on a ‘killing spree’ over the matter.

“We need to know why people do not want to comply with the law, or why they want to put up stalls by the roadside, and the issues they are facing.

“We have so many laws in the country, in the state, and by-laws of the local authorities, but some people just do not want to follow them.

“We have to do something and start somewhere, to become an international city and developed state.

“The Chief Minister has voiced his support for this,” he said.

Chow said an international city is one which is orderly and free of illegal hawkers.

“But, I believe the developed states too, have undergone the painful process of getting rid of all the illegal hawkers.

“Singapore is what it is today because it acted on the problem some 30 years ago.

“We want the people to see solution to problems, better facilities and reduced red tape,” Chow said.

Mah Sing to expand Penang ops, plans to buy 20 parcels of land

PETALING JAYA: Mah Sing Group Bhd has proposed to acquire 20 pieces of freehold land in mainland Penang amounting to about 76.38 acres from four separate vendors, for a total of RM42.59mil cash.

On Tuesday, the group said the proposed acquisition by its unit Nature Legend Development Sdn Bhd allowed it to expand its existing presence in Penang.

“The proposed acquisition is timely and in line with the group’s strategy to continuously scale up development in locations with strong growth potential,” it said in its filing with Bursa Malaysia.

The land parcels are located in Jawi, Penang, 6.6km from the Jawi Toll on the North-South Highway and 15.6km from the interchange to the second bridge inBatu Kawan.

Mah Sing plans to develop Southbay East, a gated guarded lifestyle township, which will include link homes, linked semi-detached homes, semi-detached homes, town houses and shops as well as a clubhouse.

The project will span over three to four years, and will have a gross development value (GDV) of some RM400mil.

Mah Sing already has five projects in Penang, all located on the island, across the second bridge. “With the proposed acquisition, the group now has remaining land in Penang worth about RM3.8bil in combined GDV and unbilled sales, representing 13% of the group’s total GDV and unbilled sales of RM28.78bil,” it said.

The group said Nature Legend would be submitting the proposed development plans to the relevant authorities for approval. Subject to timing of the approvals, Mah Sing expects to commence the project in the first half of 2015.

It intends to fund the acquisition and the development cost of the land via a combination of proceeds from the rights exercise, which was completed in March, internally generated funds, and bank borrowings. - The Star

Penang property slowdown

GEORGE TOWN: The property market in Penang will slow down next year, as there will be reduced transactions and fewer new launches.

Real Estate Housing Developers’ Association (Penang) chairman Datuk Jerry Chan said that the real property gains tax (RPGT) and tighter loan conditions imposed by banks were the reasons for the property market slowdown.

“However, this will not affect property prices, which will remain stable,” Chan said.

The price of land has increased substantially in prime locations over the past five years, as have the prices of raw materials such as sand and steel, according to Chan.

“There is also no property bubble, as there had been no large supply of properties coming into the north over the past five years.

“There hasn’t been any irresponsible lendings either,” he said.

Chan was speaking at Rehda’s annual press conference on the property market outlook for 2014.

According to Chan, the state government also played a role in jacking up land prices.

“For example, when the state government compensates Beijing Urban Construction Group (BUCG) for the cost of building the proposed RM6.3bil undersea tunnel project in Tanjung Tokong with a 110-acre land, the state government has indirectly influenced the price of land in the area.

“The value of the 110-acre site is about RM1,200 per sq ft, when divided by the value of the project.

“This automatically sets a new benchmark for the price of land in Tanjung Tokong, Tanjung Bungah and other prime locations on the island,” he said.

Current land prices in Tanjung Tokong, Tanjung Bungah and prime locations in the northeast district hover between RM500 and RM1,000 per sq ft.

In the southwest district, land prices are priced from RM120 per sq ft onwards.

Chan also said there were no provisions to help out first-time buyers in Budget 2014.

“We would like to see some kind of help for first-time buyers.

“Currently, first-time buyers of affordable housing units will have to pay the full base lending rate of over 6%, as they are in the high risk group, compared with about 4% enjoyed by those in the low-risk category,” he added. - The Star

Penang imposes new housing rules for affordable homes from February 1

The Penang government will impose new rules for low- and low-medium cost and affordable homes that will come into effect on February 1 next year.

Chief Minister Lim Guan Eng said today that all public housing units priced up to RM42,000 (low-cost) and up to RM72,500 (low-medium cost) cannot be resold within the first 10 years after purchase.

The state government's consent must be obtained if the owner of such a unit wants to sell the house in less than 10 years.

The new buyer must be a "listed buyer" registered with the state Housing Department and certified as a low-income earner who qualifies to purchase low-cost or low-medium cost housing.

"This 10-year rule will cover all past and future purchases. The balloting of houses will be subject to scrutiny by an auditing firm," he said in a statement.

For affordable homes purchased under RM400,000 on Penang island and below RM250,000 on the mainland, owners are prohibited from selling them during the first five years unless with government consent.

The units must also be resold to "listed buyers" from the middle-income group whose names are also registered with the Housing Department.

Like the low and low-medium cost homes, the ruling covers all past and future purchases.

The state is also imposing a new ruling on foreigners buying properties. They can only buy properties in Penang in excess of RM1 million.

If they are buying landed property on the island, the value must exceed RM2 million.

All purchases of properties by non-residents will also be subjected to a 3% levy on the transacted price from February 1 next year.

However, exemptions are provided for purchases for industry purposes or for boosting employment, education, human talent or promoting Penang as an international and intelligent city.

The state is also introducing a 2% levy on property purchased from February 1 next year that are sold within three years from the date the Sales and Purchase Agreement(SPA) is signed.

"In other words, this is not retrospective. Properties bought with the SPA signed before February 1 will not be subjected to this levy. This 2% levy is also not applicable to affordable housing," Lim said.

He said preliminary discussions had been held between some property players and housebuyers but the state government is still prepared to have further discussions with all stakeholders on the new rulings.

The new housing policies were first announced on November 29 when Lim tabled the state's 2014 budget at the state legislative assembly.

When reporters asked him about them, he said the administration might become "unpopular" for imposing the new rulings.

Lim further explained in his statement today that the new rules are to protect the state from being adversely affected by the property bubble and to ensure that public and affordable housing are bought by genuine and qualified first-time buyers.

"As a responsible government seeking sustainable economic growth and development, we are careful to avoid the pitfalls of any property bubble that will bring hardship to the rakyat and damage the economy. Japan is a good lesson of the dangers of a property bubble.

"As a people-centric government, we want to achieve housing democracy that allows every working family to own their own home. Ensuring that public housing is owned by the poor and genuine first-time buyers is our priority," he said.

Lim also reminded the people of the state's pledge to build 20,000 units of public and affordable housing units in all five districts of Penang with the RM500 million Public And Affordable Housing Fund.

"This is the largest amount set aside by any state government in Malaysian history to build affordable and public housing," he said. - December 8, 2013.

Penang project lift for SP Setia

SP SETIA Bhd's latest offering - Setia V Residences - has seen a strong take-up rate among local investors, with 70 per cent of its 178 units already sold.

The upscale development project, which straddles Penang's famous seafront promenade Gurney Drive, Lorong Burma and Jalan Kelawei, is set to be marketed in China, Hong Kong and Taiwan, said SP Setia North general manager Khoo Teck Chong.

"This project has been instrumental in helping us to exceed our revenue targets for this year. We hope to convince more local investors to check out our second tower, which each unit tagged at between RM1.7 million and RM2.5 million," he told Business Times during the official launch of the Setia Gallery and Suites on Gurney Drive.

The units in Tower B, each having a built-up area of between 1,300 sq ft and 1,800 sq ft, will offer either city or shoreline views.

In addition, there will also be facilities the that developer has tagged as "six-star".

They include a sky deck with an infinity pool, a pavilion and landscaped gardens, guest lounge and viewing decks, concept kitchen and barbeque area, as well as a large balcony with a dip pool in Tower A.

He said the company is targeting to chalk up RM250 million in revenues for its projects in the north next year.

On the island, SP Setia is also expected to focus on the Tanjung Bungah area, where it is planning to launch a RM1.1 billion mixed development project.

The proposed high-end project - tagged Setia Eco-Forest - will comprise landed properties and luxury condomiums.

It will boast of a green concept that is similar to the company's Setia Green project, which promotes eco-living.- Business Times