Eco World offers diverse range of products for buyers

PETALING JAYA: With a landbank of 1,793.97ha and total gross development value (GDV) of RM43.52bil, Eco World Development Group Bhd offers a wide range of residential, commercial and industrial products with thoughtful architecture and sustainability elements.

Its current projects are mainly located in the Klang Valley, Iskandar region, and Penang.

In the central, its on-going projects are EcoSky along Jalan Ipoh, EcoMajestic at Semenyih and Saujana Glenmarie in the Glenmarie neighbourhood.

EcoSky, its maiden project in the Klang Valley, is an integrated residential and commercial development on a 3.88ha parcel situated off Jalan Ipoh.

Located 8km away from the city centre, the strategic location enables purchasers to choose between a great view of the Petronas Twin Towers on one side and the famed limestone Batu Caves on the other. The site is served by two KTM stations, namely Taman Wahyu and Batu Caves, with easy access to major highways.

Besides a wide range of facilities to cater to residents’ lifestyle requirements such as recreational facilities, shops, offices and food and beverage outlets, EcoSky will be certified by the Singapore Building and Construction Authority’s Green Markand US’s Leadership in Energy and Environmental Design on top of certification by Malaysia’s Green Building Index.

Meanwhile, the newly launched EcoMajestic, also its first township in the Klang Valley, is located in the Southern Corridor of Semenyih.

With a land size of 434.23ha, this RM11.14bil-project is set to be the largest strata titled fully gated and guarded township in Malaysia.

Designed with a colonial straits flair, EcoMajestic’s master plan includes 60.7ha dedicated for development as a commercial hub that will make it the business and economic hub that serves Semenyih, Kajang, and Bangi.

Currently, the property player offers affordable landed terrace homes, semi-detached and cluster as well as bungalow land for home buyers at EcoMajestic.

In the Iskandar region, it had launched EcoSpring and EcoSummer while it also introduced Eco Business Park I at a preview.

EcoSpring and EcoSummer are located in the well-established Tebrau corridor and will offer a good mix of affordable and luxury landed homes.

Its first project in the southern state is the 131.52ha-EcoBotanic in Nusajaya, which features a butterfly-shaped lake and 7.2ha central park and houses that are inspired by the colonial era architecture.

In Penang, it plans to unveil the 5.26ha residential and integrated EcoTerraces at Paya Terubong this August. The RM340mil project comprises one block of 41-storey condominium, 47 units of three-storey terrace houses and 12 units of semi-detached houses. - The Star

California's SanDisk sets up RM1.2bil Penang plant

GEORGE TOWN: SanDisk Corp is putting up a RM1.2bil manufacturing plant in Penang, which is scheduled to start production in March next year.

SanDisk, a leading flash memory storage manufacturer headquartered in Milpitas, California, is listed on Nasdaq, and is also a Fortune 500 and S&P 500 company.

To meet the March 2015 deadline, its subsidiary SanDisk Storage Malaysia Sdn Bhd is now recruiting, via the Penang Career Assistance and Talent Centre web portal, skilled workers with the relevant degrees in electronics, computer science, and industrial engineering to fill the IT business analyst, business system analyst, and engineering positions.

SanDisk plans to spend the RM1.2bil in five years for its operations in Penang and recruit over 1,000 employees, sources told StarBiz.

SanDisk’s new manufacturing facility is undergoing construction on a 30-acre site in Batu Kawan, south Seberang Prai.

It is learnt that the company is now looking for more land in the area for a future expansion exercise, according to sources familiar with the industry.

The new plant in Penang, aimed at strengthening SanDisk’s position in Asia, will produce flash memory solutions using wafer imported from Japan,

Last August, SanDisk completed its acquisition of Smart Storage Systems, a developer of enterprise solid state drives based on the SATA and SAS storage protocols.

Prior to SanDisk’s takeover, Smart Storage president John Scaramuzzo had in May 2013 announced plans to set up a high-volume manufacturing facility in Penang and a new research and development facility in Singapore.

After the acquisition, Scaramuzzo is now SanDisk’s Enterprise Storage Solutions senior vice-president and general manager.

SanDisk’s expansion plans in Asia with a high-volume manufacturing facility in Penang is in line with the latest forecast from a BCC Research report published recently in June.

The Massachusetts-based BCC Research says the global market for solid-state flash memory and related technologies is expected to grow to US$43.9bil by 2018, with a five-year compound annual growth rate (CAGR) of 7.8%.

Asia is the largest and fastest growing market, projected to account for more than 50% of global sales across all segments.

“Flash memory is cheaper, lighter, stronger, and faster than hard disk-based memory systems.

“It has already been widely adapted into the mobile and enterprise computing markets and promises to be the dominant storage technology moving forward.

“Asia, by far the dominant region in the global market, is expected to reach US$22.4bil in sales by 2018, with a CAGR of 8.3%.

“Growth in this region is being driven by a steadily improving regional economy, technological advances, and falling production prices.

“The North American market, the second largest region, is expected to grow to nearly US$8.8bil by 2018, registering a CAGR of 6.8%,” the report says. - The Star

House buyers still being hoodwinked?

FOR many years, the National House Buyers Association (HBA) has been sounding alarm bells that prices of houses are getting more and more unaffordable for the average rakyat, especially the lower and middle income segment.

Based on current starting salaries of about RM3,000 per month and with prices of new launches of apartments in the Klang Valley being priced in excess of RM500,000, it is almost impossible for our younger generation and single parents to own their own homes.

Unless strong measures are taken by the Government to address the issue of steep rise in house prices, Malaysia risk facing a “homeless generation” that can cause various social issues with far reaching complication.

HBA had previously expressed its gratitude and thanks when the Prime Minister introduced stronger measures in Budget 2014 to address rising house prices such as increasing the Real Property Gains Tax and higher threshold for foreigners to buy properties and banning of the Developer Interest Bearing Scheme (DIBS).

Among the rules introduced in Budget 2014 was increased transparency in property sales price, where property developers will have to display detailed sales price including all benefits and incentives offered to buyers such as exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.

This was supplemented by a ruling by Bank Negara that the margin of financing given by banks should be based on the net selling price, which is the sales and purchase agreement (SPA) price less any benefits, incentives and rebates given by the developer.

It has been seven months since Budget 2014 was announced and recently HBA volunteers went to various property fairs of various reputable developers to survey whether how well some of the measures announced in the budget have been implemented.

Freebies

(a) DIBS – Save for just one small developer, all projects surveyed had no DIBS, which shows that its ban had been successfully implemented.

(b) Free legal fees for SPA – All projects surveyed offered the fees if the SPA signed with their panel lawyers.

(c) Free legal fees for loan agreements – Only about half of projects surveyed offered these fees provided it was taken with their selected financiers and financiers’ lawyers.

(d) Free stamp duties for memorandum of transfer (MOT) – Only about 20% of projects surveyed offered the free MOT.

Rebates

All the projects surveyed offered rebates ranging from 5% to 10% of the SPA price, meaning that the purchaser only needed to pay about 5% down payment instead of the customary 10%. There were numerous projects which offered 10% rebate, meaning that the purchaser just needed to apply for 90% financing from the panel banks. Coupled with freebies such as free legal fees for SPA and loan agreement, the purchaser effectively did not need to fork out any cash up-front to purchase the house.

Findings

The conclusion is that developers are cutting down on their so-called freebies. Previously almost all projects surveyed offered free legal fees for SPA and loan agreement. As for the rebates, our survey suggested that the practice had actually intensified compared to previous years. In the past, many developers used DIBS where buyers paid 10% and nothing nothing until the property is completed. However, this has now turned into “pay nothing and get your property.”

Bank sales staff were also present during sales launches. The banks offered 90% margin of financing based on the SPA price and not the net selling price which is SPA price less all the freebies and rebates.

Conclusion

HBA supports transparency in the selling price and that the margin of financing be based on the net selling price as there is no “free lunch” in this world. Whenever the developer says free legal fees, stamp duty etc, the developer will factor the cost of such freebies and rebates back into the selling price of the property.

Although, it would appear that it makes it easier for people to buy properties without the need to fork out huge cash up-front, such freebies and rebates artificially pushes up the house price even further and has spill over effects, pushing up prices of existing properties and its surrounding locations further, making it more difficult for the future generation to buy properties.

The biggest challenge faced by prospective house buyers is coming up with the 10% down payment and other expenses which can cost in excess of RM70,000 and above for a RM500,000 property. Our younger generation who are struggling to make a living will not have enough savings and even for those fresh into the workforce, the funds in their EPF Account 2 is also not sufficient.

However, jacking up house prices and then offering a 10% rebate is not the solution. In the long run, it will only exacerbate the situation. Once a property price has risen to an artificially high level, it is difficult to bring it down again without negative consequences to the owners and economy at large.

Using the example of a ‘big’ developer who was offering 10% rebates and freebies such as free legal fees on SPA and loan agreement, the said property were all launched in excess of RM700,000 when the true value after rebates and freebies is closer to just RM600,000. Would it not be better to launch the said property at RM600,000 and asking buyers to pay the required 10% down payment instead of artificially hiking up to RM700,000 and then hoodwinking house buyers by giving rebates and freebies?

If the developer launches the project at RM700,000, then the next launch must even be priced higher, probably closer to RM800,000 and soon, even link homes as far as Semenyih will be priced in excess of RM1mil. Then surely, a “homeless generation” will emerge in Malaysia.

In the long run, it is better if the developer prices the property lower without the cost of the freebies and rebates and house buyers can then plan and budget their purchase accordingly and need not have to pay so much in monthly loan instalments.

Prospective house buyers must save up for their future purchase the moment they start working and forgo certain luxuries such as electronic gadgets and non-national cars.

The goals of affordable housing cannot be achieved overnight and requires the cooperation and understanding of all stakeholders.

Chang Kim Loong is HBA secretary-general. - The Star

Tambun Indah expanding landbank

PETALING JAYA: Penang property developer Tambun Indah Land Bhd is expanding its landbank in Seberang Prai with the proposed acquisition of a 209-acre land for RM150mil.

Its wholly-owned subsidiary, Palmington Sdn Bhd (PSB), yesterday acknowledged a letter of acceptance of offer to acquire 27 parcels adjacent to the group’s flagship development, Pearl City.

Tambun Indah managing director Teh Kiak Seng said the proposed land acquisition would enlarge its remaining ongoing and undeveloped landbank in Pearl City to 844 acres from 635 acres previously.

“We are constantly looking out for landbank to expand Pearl City. This parcel of land is a good opportunity for us to strengthen our position as a key developer in Seberang Prai to capture the anticipated demand uptrend for affordable homes,” he said in a statement yesterday.

He added that this was in light of the recent opening of the Sultan Abdul Halim Muadzam Shah Bridge (Penang second bridge) and upcoming developments in and around Batu Kawan.

TPPT Sdn Bhd (TPPT) is the vendor of the land.

Tambun Indah will be paying about RM16 per sq ft, considerably lower than the market rate for land around that area.

In a news report last month, Henry Butcher Seberang Prai associate director Fook Tone Huat said vacant land prices in South Seberang Prai where the second bridge was located, were now hovering around RM40-RM50 per sq ft, compared with RM8-RM9 per sq ft prior to the announcement of the second link project in 2006.

At that market rate, Tambun Indah is buying the land at a maximum discount of 68%.

The transaction is subject to the execution of a sales and purchase agreement between PSB and TPPT, and is also subject to approval from shareholders of Tambun Indah.

The acquisition will be funded by the group’s internally-generated funds and bank borrowings. - The Star

Singapore’s central bank warns on foreign property investment

Singapore's central bank has issued a warning to investors about the risks posed by buying property overseas, as high house prices at home prompt a growing number of its residents to invest in real estate abroad.

A strong Singapore dollar and curbs on mortgage lending at home have encouraged more Singaporeans to buy property in the likes of Britain and Australia, with the Monetary Authority of Singapore (MAS) reporting a 43% rise in the value of overseas property transactions handled by local real estate agencies in 2013 compared with 2012.

MAS said in a statement that it is monitoring developments closely to ensure financial stability and that investors do not over-extend themselves.

"Risks are more difficult to assess or manage when investors are unfamiliar with conditions in overseas markets, such as the prospects for oversupply of properties, or of a deterioration in economic conditions," MAS said.

It also flagged the foreign exchange risk of borrowing in one currency but collecting rent in another.

MAS said the value of overseas properties dealt with by Singapore real estate agencies was S$2 billion (RM5.14 billion) in 2013, up from S$1.4 billion in 2012.

A recent research report by estate agent Knight Frank found that buyers from Singapore accounted for 23% of all purchases of newly built central London property in 2013, second only to British buyers who accounted for 27%. – Reuters, May 21, 2014.

E&O awaiting state govt clearance for Seri Tanjung Pinang phase 2 project

Artist’s impression of Seri Tanjung PInang phase two.

GEORGE TOWN: The development of Seri Tanjung Pinang (STP) phase two in the north-east coast of Tanjung Tokong here by Eastern & Oriental Bhd’s (E&O) unit, Tanjung Pinang Development Sdn Bhd has entered a critical phase with the company awaiting the endorsement of the state government for its proposed masterplan before it can proceed with the reclamation work.

Although the state had granted an in-principle approval to E&O for the masterplan in 2011, E&O still needs the state’s clearance for the masterplan before reclamation work of the STP phase two can proceed.

The STP phase two project will involve the reclamation of 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.

It will be the sequel to the 240-acre STP phase one and is expected to have a development horizon of 15 years.

Time is also of the essence as E&O’s concession agreement with the Penang state government to reclaim and develop the land is subject to the completion of the reclamation work by 2019 when the reclamation concession expires. Given that the reclamation for the more sizeable STP phase two will be done further offshore in deeper waters compared with the smaller STP phase one that is closer to shore, the project is expected to incur higher costs and take a longer time.

In a recent interview here, E&O managing director Datuk Terry Tham said the company had submitted applications to the state government with regard to the endorsement of the proposed STP phase two masterplan.

“We can start reclamation only after obtaining approval from the state government, which we hope to obtain by the fourth quarter of this year. Reclamation work is expected to commence thereafter and may take three to five years for full completion.

“We should be on track to meet the deadline for reclamation of 2019 as long as we comply with all requirements set by the regulatory authorities. Development can only start after reclamation work has been completed,” Tham told StarBiz.

The Department of Environment had on April 10 granted an approval in principle for the detailed environmental impact assessment (DEIA) study and conceptual masterplan of the STP phase two project, subject to compliance to conditions set out by the DOE to ensure the project is carried out in an environmentally responsible manner and is consistent with the prevailing regulatory framework.

Tham said E&O was ready to comply with all conditions set by the authorities, which included the necessary requirement of a DEIA study and its approval. “As a responsible developer, E&O has appointed local consultants familiar with local conditions and reputable international consultants with the experience and expertise of reclamation projects worldwide, to verify and help monitor that each stage of reclamation work is consistent with international standards, irrespective of whether it is imposed on us.

Penang chief minister Lim Guan Eng told StarBiz earlier this month that E&O would be given the approval by the Penang state government if it complied with all the technical and regulatory requirements for the project.

“If all the 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 explained.

If given the go-ahead, E&O will proceed to call for tender proposals for the reclamation work for STP phase two with the actual reclamation work expected to begin only early next year. - The Star

长4.87公里·直通武吉占姆路 槟政府私人界耗3亿建垄尾新路

槟城4日讯）槟首长林冠英宣布，州政府将与私人发展商合作，斥资3亿令吉依山建造长4.87公里的垄尾路新路直通武吉占姆路，为垄尾交通舒困。工程预料4年内竣工，将可以舒缓垄尾路15%车流量。

槟岛市政局工程部副主任拉詹德兰说，是项工程暂命名“米桶山路”（Jalan Bukit Kukus），新路将会与现有的垄尾路平行，工程将以米桶山为起点。林冠英说，新路竣工后，州政府将重新命名。

首长是于周日在实地巡视后，召开记者会指出，垄尾近年发展迅速，人口稠密却只有一条垄尾路作为主要衔接道路。每天约有6万辆汽车取道垄尾路往市区，使到该区长期处于交通堵塞状态。

“民联执政以来，多次向联邦政府提出建造新路要求，但从第十大马计划到2016年启动的第十一大马计划中，建议都不被采纳。州政府不能等，我们只有自己建！”

他说，计划中的新路全长4.87公里，其中1.22公里路段已建竣。槟岛市政局将与私人发展商松林和国云“分摊”，由地方政府和发展商各负担1.5亿令吉，建造余下的3.65公里路段。

建议中的新路，其中还未兴建的依米桶山路有816公尺，山势陡峭和山壁与土地都是石质，增加建筑技术难度，也加重建造成本。后半段则位处山谷，来往方向均建有两条车道。

Special Report Penang Property: Zooming in on Seberang Perai - Fast-tracking Seberang Perai’s transport infrastructure

PENANG island’s land, sea and air transpor t system is well developed compared with the mainland of Seberang Perai which is almost triple the former’s size.

However, as more restrictions on development on the island emerge — due to cost, scarcity of land and limitations brought about by its hilly landscape and its heritage zones — businesses and developments are beginning to gravitate towards the mainland, where land is plentiful.

A census by the Department of Statistics shows that as at 2010, the population of the mainland was 818,197. This figure is expected to grow to 1.01 million by 2020, and 1.17 million by 2030. This will account for about 53% of the state’s total population of 2.2 million by then.

Meanwhile, a study by the Penang state government shows that about 42.5% of traffic circulates within Penang’s island. On the other hand, 35% of traffic flow is within the mainland. Travel between Penang’s mainland and island accounts for 7% of traffic, while traffic between Penang and other states make up 14% of total traffic.

While the Second Penang Bridge’s concessionaire Jambatan Kedua Sdn Bhd expects the new bridge to siphon some 20% to 30% of traffic from the first bridge, actual traffic patterns with the new bridge have not yet been established as it was only tolled from the beginning of April. Charges range from RM1.70 to RM70.10, with motorists paying a total RM8.50 one way (in comparison, the toll for the first bridge is RM7).

According to Majlis Perbandaran Seberang Perai municipal president Maimunah Sharif, while the traffic situation in Seberang Perai/Prai is still bearable, several locations in Seberang Perai have begun to experience critical bottlenecks. Three of the most affected areas are the roundabout at Seberang Jaya, the Juru Autocity Junction and the exits from the first Penang bridge and the North-South Expressway.

In anticipation of the growth in population and subsequent traffic jams, the state government is beefing up the mainland’s infrastructure to accommodate the traffic surge. It has drawn up a transport master plan for the period of 2013 to 2030 to enhance its roads and bus system, in addition to upgrading its ferries to faster catamarans. These upgrades may cost as much as RM7.46 billion.

“In addition, the proposed construction of roads and new infrastructure are also expected to help overcome traffic congestion in Seberang Perai as well as enhance economic activities in the affected areas,” she says.

These key upgrades include building new connections within the mainland and between the island and mainland. For example, the state government is looking to build the 36.5km North-South Expressway Link Road from Bandar Cassia to Kepala Batas at a cost of RM1.46 billion, and a 7km undersea tunnel from Gurney Drive on the island to Bagan Ajam on the mainland that costs about RM4.2 billion. The state government has signed a preliminary agreement with Consortium Zenith BUCG Sdn Bhd to undertake the feasibility study and design of the tunnel as well as other roads on the island.

In terms of public transport, the state government also plans to build a bus rapid transit (BRT) system in Seberang Perai. The two networks will be from Butterworth to Georgetown (18.7km, RM655 million), and through the southern mainland corridors (23km, RM945 million). So far, there are 22 suggested new routes for the first stage, says Maimunah.

To complement these bus routes, park and ride facilities have also been proposed with seven locations under consideration. These will cost RM200 million.

To enhance this new system, the state government is also planning to create a feeder bus service that links the BRT lines. This will entail restructuring and improving existing bus routes.

In addition, the state also plans to reorganise the ferry services and increase new catamaran service routes from Penang Sentral to Weld Quay in Georgetown, Queensbay in Bayan Lepas, and Gurney Quay. Currently, the ferry service shuttles between Georgetown and Butterworth.

Penang Sentral is a 49:51 joint venture between Malaysian Resources Corporation Bhd and Pelaburan Hartanah Bhd. The 23-acre integrated residential and commercial development in Butterworth is envisioned as a transport hub that will include terminals for buses, taxis and ferries. Penang Sentral will also serve as a stop for the proposed monorail in Seberang Perai and a double-tracking electric rail.

Penang Sentral had an original gross development value of RM2 billion when it was launched in 2007, but owing to funding and land acquisition issues, the project was postponed. Last year, the project was redesigned to fast-track its development and make it more user-friendly,  its project director Imran Muhamad Salim said in a report last November.

Penang Federal Action Council chairman Datuk Zainal Abidin Osman was quoted as saying in March that the development plans for the project have been submitted to the local authorities and are awaiting approval.

How will these projects be funded? Given the sheer size of these undertakings, a number of agencies from the state and federal level will be involved. These are the Unit Pengurusan Lalulintas Bahagian Kerajaan Tempatan and  Public Works Department. Meanwhile, the state government has also applied to the federal government for funding under the 12th Malaysia Plan.



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

Special Report Penang Property: Zooming in on Seberang Perai - From oil palm estate to new hot spot

FORMERLY known as Batu Kawan, this old oil palm estate used to belong to its namesake, Batu Kawan Bhd (BKB), before the state government gazetted the land under the Land Acquisition Act 1960 in 1990. Following a lengthy legal tussle, BKB was awarded RM15,000 per acre instead of the earlier RM8,167 per acre. BKB’s attempts to raise the  compensation to RM40,000 per acre was thrown out by the Federal Court in 2001 on the grounds that RM15,000 per acre was enough compensation for agriculture land with “remote potentiality” for development.

Fast forward 13 years later and this is clearly not the case. While the place remains largely swathed in oil palm trees with a few homes visible at the fringe, massive changes are in store.  These homes are part of the 3,000 units built by the Penang Development Corporation (PDC), the master developer, mostly for those affected by land acquisition and development, in addition to an international stadium, seafood restaurant, school, reservoir and the Batu Musang jetty.

For starters, PDC has earmarked 6,400 acres in Batu Kawan for a township called Bandar Cassia and has drawn up a master plan. “The development components of Bandar Cassia are housing, commercial, leisure and tourism, institutional, golf resort, theme park medical, educational centre, hotels, parks and all the infrastructure, amenities and facilities required by the investors, workers and residents under this live, work and play concept,” PDC general manager Datuk Rosli Jaafar tells City & Country.

Residential and industrial precincts will coexist. The biggest catalyst of this development is the second Penang bridge, or the Sultan Abdul Halim Mu’adzam Shah Bridge, which was opened in March. It connects Bandar Cassia with Batu Maung on the island.

“With the second Penang Bridge in place, PDC strongly believes that Bandar Cassia will grow by leaps and bounds, and the township can be  developed within 15 years,” says Rosli.

“The development of Bandar Cassia started in 1990, immediately after PDC completed the land acquisition exercise. Since then, the master plan has been updated and aligned to respond to the economic environment and changing demand.”

Due to the two rivers that separate the township from the mainland, water features are an important aspect of the development, which is obvious in the master plan. “Another important principle adopted when PDC designed Bandar Cassia is the preservation of natural features such as mangroves, hill areas and rivers,” Rosli says.

“PDC will work with the investors and businesses to enhance the value of these natural products to achieve a sustainable and balanced development. This is to ensure that these areas are developed with minimal intervention and with adequate and effective mitigation measures.”

In terms of accessibility, Bandar Cassia is a 30-minute drive along the North-South Expressway and Batu Kawan Expressway to Penang Port. It only takes 45 minutes to drive to George Town via the first Penang bridge, while the Bayan Lepas International Airport on the island is only 30 minutes away via the second Penang bridge. In addition, at the northwestern tip of the township is the Batu Musang jetty, which is used by ferries servicing Pulau Aman.

Investment catalysts

Some of the significant developments in Bandar Cassia include IKEA, Penang Designer Village, University of Hull, KDU University College and Penang International Technology Park. Also in the pipeline are an international theme park and a golf resort, while other recreational elements to enhance livability include a sports complex, water sports centre, mangrove park and wellness and spa village.

According to Rosli, KDU University College and University of Hull plan to set up schools of engineering, accountancy, law, business studies and logistics in Bandar Cassia.

“PDC is working closely with investPenang to promote the Batu Kawan Industrial Park in order to attract high-technology and skills-intensive industries to the area. Besides the industrial park, the other development components that can create more job opportunities for the people in Bandar Cassia are commercial, institutional, education and tourism,” he says.

“Penangites have waited for many years for IKEA to open for business. Penang is now proud that it has chosen Batu Kawan as its new base in the northern region. IKEA’s presence is a boost for PDC in its efforts to make Batu Kawan a more attractive place for all to live, learn, work and play.

“Another important project in the pipeline is the premium shopping centre Penang Designer Village, which will be another booster. All these will offer lots of business and leisure activities to the locals, besides attracting tourists from neighbouring states and foreign countries.”

He says PDC is expecting 250,000 people to live in Bandar Cassia. In view of this, some 50,000 homes will be built to cater for all strata of society. They include 11,800 units of affordable housing — 3,372 low-medium cost apartments and 8,428 medium-cost apartments — to be built over 15 years. According to PDC, affordable homes are priced at RM250,000 on the mainland. PDC plans to launch the first phase, comprising 149 low-medium cost apartments and 371  medium-cost apartments, this month.

For residential properties, the average density is around 50 units per acre. To cater for the targeted population, PDC aims to have up to 170 million sq ft of commercial space with an average plot ratio of 3:1 in Bandar Cassia.

“The provision of the infrastructure, amenities and public facilities is based on a population of 250,000 and 170 million sq ft of commercial floor space,” he says.

Besides residential and commercial properties, Bandar Cassia will also feature the 831-acre Batu Kawan Industrial Park (BKIP) in the south. According to Rosli, earthworks for east BKIP (436 acres) have been completed while that for west BKIP (395 acres) is being carried out.

“With a view to promote local small and medium-sized enterprises, phase one of the SME Village will be located in the BKIP,” he says.

Phase one comprises four semi-detached factory buildings, 40 terraced factory buildings and 27 factory lots. The factory buildings are under construction. Phase two, which comprises a service centre, will commence construction soon.

As Bandar Cassia is considered a greenfield site, the ground must be raised above the flooding level before development. The township will be divided into catchments with different development platform levels and land earmarked for monsoon drains to prevent floods.

PDC is now building a number of roads to improve connectivity inside and outside Bandar Cassia. The Bandar Cassia Highway will linked to the second Penang bridge via a cloverleaf flyover within the township. PDC is also building Persiaran Cassia 2 and Lingkaran Cassia Selatan, to the west of BKIP. Up for completion in the second quarter of the year are Persiaran Cassia Selatan 3 and Lingkaran Cassia Selatan.

Besides roads, Bandar Cassia will also provide footpaths and bicycle lanes as well as public transport to connect to centres of activity such as workplaces, parks, service centres  and other neighbourhoods, says Rosli.

“To enhance the connectivity of people, PDC will encourage friendly linkages of buildings through verandahs, linear parks and footpaths. In the design of roads, pedestrians and cyclists will be separated from motor vehicles.”

Bandar Cassia is currently served by 900mm water mains and a reserve reservoir with a 10 million gallon capacity.

Electricity supply to the industrial areas is currently at 33kV, but this can be upgraded to 132kV if required by the industry or development. Rosli says Tenaga Nasional Bhd has begun work on the main intake substation on a 21-acre site, which will be connected to the national grid.  This substation will supply power to Bandar Cassia at 275kV.

The township will have at least four sewage treatment plants, which will be built in modules, with an ultimate capacity of 100,000 population equivalent.


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

Special Report Penang Property: Zooming in on Seberang Perai - Developers betting on growth prospects

ABUNDANT and more affordable land as well as a large population have attracted more developers to invest in Seberang Perai. There are also more job opportunities in the mainland now as industrial businesses shift their operations there. More young adults have also moved from the island to the mainland as property prices are more affordable there.

As several major projects are set to take off in Bandar Cassia in Batu Kawan, those involved in Seberang Perai’s real estate market are expected to reap the rewards of their investments.

Developers from outside Penang have made inroads into the mainland. They include Sunway Bhd, Mah Sing Group Bhd, IJM Land Bhd, Eco World Development Group Bhd, Malton Bhd, DNP Land Sdn Bhd and Global Oriental Bhd. Meanwhile, the local players include Ivory Properties Group Bhd, Tambun Indah Land Bhd, Tah Wah Group Sdn Bhd and Asas Dunia Sdn Bhd.

According to Ivory Properties chief operating officer Goh Chin Heng, the second Penang bridge turned the mainland into a “different ball game”. He says the mainland has the longest industrial belt in the country and industrial investors are keen to invest there, shoring up demand for housing.

“With a two-car lane and a motorcycle lane on the second bridge, it will definitely bring Penang island closer to Batu Kawan, just like the case of Hong Kong Island and Tsim Sha Tsui,” he says.

Top: DNP Land’s BM Impiana township will also feature an AEON shopping mall that  is scheduled to open in June Bottom: DNP Land’s Jesselton Hills in Bukit Mertajam

Going forward, he expects Batu Kawan to be the new satellite city on the mainland, while Simpang Ampat and Juru will be the new hot spots thanks to the second Penang bridge and new catalyst projects.

“Batu Kawan has the potential to become another growth area, with retail outlets, themed shopping and leisure activities on a mega scale in one area. In the Bukit Mertajam area, Alma Town will be the popular hot spot while Butterworth, Bagan Ajam, Sungai Puyu, Teluk Air Tawar and Sungai Dua will benefit from the undersea tunnel, which is expected to be completed in 2025. In terms of value creation, homebuyers may see a 30% to 40% appreciation but this would be in a longer period compared with the island’s appreciation rate.”

Goh says the island will feature more stratified properties while landed properties will still be preferred on the mainland. Luxury condominiums on the island are priced at RM1,200 to RM1,500 psf, while affordable units are from RM600 to RM800 psf. Meanwhile, affordable condos on the mainland are priced from RM300 to RM350 psf.

“If we make a general comparison of the island and the mainland, the price of similar products of the former is 2.5 to 3 times higher than the latter. Generally, we expect the gap between the two to narrow, especially in the Batu Kawan area as it transforms into a well-planned township.”

According to Goh, the group’s key projects on the island are City Residence, City Mall, Mount Erskine, Penang Times Square and Island Resort. “We have also started the first phase of Penang World City and the remaining phases are in the planning stage.”

On the mainland, it will soon be completing the third and last phase of Aston Villa at Bukit Mertajam. Over at Bandar Cassia, the group and IKEA will be developing an IKEA store and mall on a 245-acre parcel at a cost of RM484 million.

“The main focus of the state government should be to plan and develop the infrastructure, such as the roads and drainage, well. We are glad to see that the state government is welcoming more investors to set up their businesses on the mainland, and we believe that the state will work more closely with the local planning authority to support development approvals.

“Apart from that, the state and relevant authorities should work together on solid waste solution planning as we are expecting a significant growth in the population on the mainland in the near future. The state should also continue playing its role in the development of affordable housing.”

Another company that has made inroads into the state is Mah Sing, with its acquisition of a 76.38-acre tract in Jawi, near the toll of the second Penang bridge. The land will be developed into Southbay East, a township with affordable homes to cater for the middle class. Named after the more upscale Southbay City mixed-use development in Batu Maung on the island, the township has an estimated gross development value (GDV) of RM400 million. It will comprise linked homes, linked semi-detached homes, townhouses and shops. Its first phase will likely feature terraced houses priced at about RM500,000 each, a price point that analysts feel is acceptable for the area. Southbay East will be a gated-and-guarded community with clubhouse facilities.

Notably, this is Mah Sing’s first project on the mainland and its sixth in Penang. The group had acquired the land for RM12.80 psf, which is deemed reasonable compared with similar acquisitions nearby, namely IJM Land’s acquisition of a 70-acre tract at Pekan Sungai Jawi for RM18.50 psf.

IJM Land is planning to develop a small township there, with a preliminary GDV of RM300 million to RM350 million. It already has a township on the mainland, namely Pematang Sanctuary. This upscale freehold 100-acre township mainly comprises 2-storey semi-dees and 2-storey bungalows. Prices range from RM520,000 to more than RM772,000, which translates into a GDV of about RM200 million.

Meanwhile, Eco World has a new freehold project in Bukit Tambun on the mainland. Called EcoTrees, the 58.18-acre development is located near the second link and next to the North-South Expressway. According to a spokesperson, it will have landed and strata properties, with a small mall comprising shops and offices. The first phase is targeted to be launched in 2015.

Meanwhile, DNP Land, a subsidiary of Wing Tai Malaysia Bhd, has projects coming up in Alma, Bukit Mertajam. They are the Mahkota mixed-use development, Sentinelle Ville gated-and-guarded landed luxury homes and Jesselton Hills gated-and-guarded high-end landed homes.

Mahkota will comprise 360 units of serviced apartments with built-ups of 1,156 sq ft onwards and a row of 3-storey shopoffices. The project will come up directly opposite AEON Jusco, which is scheduled to open in June. Meanwhile, Sentinelle Ville will comprise 66 units of 3-storey semi-dees with private lifts. The land areas will be from 34ft by 85ft onwards, while built-ups will be around 3,609 sq ft. Construction has just begun.

Left to right: Goh: If we make a general comparison of the island and the mainland, the price of similar products of the former is 2.5 to 3 times higher than the latter Tan: If there is a multi-national company that is coming to Penang, I can assure you that they would not set up their factory on the island

Jesselton Hills will be a 120-acre development with 800 units of 2-storey and 2½-storey semi-dees, bungalows and 2-storey superlink homes. There will be 136 units of semi-dees with built-ups of 2,478 to 2,960 sq ft and land areas of 36ft by 72ft and 39ft by 79ft onwards. Meanwhile, the 198 superlinks will have built-ups of 2,408 sq ft and land areas of 23ft by 75ft.

“You can see a paradigm shift where the population  is moving to this side and the job market [is growing]. If there is a multi-national company that is coming to Penang, I can assure you that they would not set up their factory on the island. [On the contrary], you can see the foreign directi investment really come into the area [Bukit Mertajam, which is on the mainland],” says DNP Land’s senior general manager of property division northern region K C Tan.

“Why did we choose Bukit Mertajam? Mainly because it’s an industrial park and they have done very well here. Many multi-national companies are also coming here.

“The emergence of Batu Kawan definitely inspires a lot of confidence,” he says.

Malton, on the other hand, has entered into a joint venture with landowner Batu Kawan Bhd to develop a 300-acre parcel in Batu Kawan. According to a research note by RHB Research Institute Sdn Bhd, the parcel had a potential GDV of RM3.88 billion as at June last year. The launch of phase one is scheduled for mid-2014 and will comprise shopoffices and superlink homes with a GDV of RM440 million.

Meanwhile, Sunway is developing Sunway Wellesley, an 82-acre freehold development in Bukit Mertajam. Unveiled in April last year, the first phase comprises 31 units of 3-storey shopoffices and has been fully sold. Meanwhile, phase two comprises 154 units of 3-storey townhouses, 60 units of 3-storey semi-dees, and 11 units of 3-storey shopoffices.

According to RHB Research Institute in a note dated Aug 19, 2013, Global Oriental owns 350 acres of undeveloped land in the Bandar Cassia township. The tract has an estimated GDV of RM2.3 billion. One of the more recent launches in the township is Callisia 2, which comprises terraced houses with built-ups of 22ft by 67ft. The houses are priced at RM359,000 and have been fully sold. The research report also notes that the next phase will comprise terraced houses, superlinks and semi-dees in a gated-and-guarded precinct. Indicative pricing is at RM500,000, RM555,000 and RM750,000 respectively. The note also says that Global Oriental plans to build a retail mall once Bandar Cassia’s population grows further.

Top: Bukit Tambun Bottom: Tambun Indah Land’s flagship Pearl City in Simpang Ampat

Tah Wah Group has a 130.5-acre parcel on the mainland, primarily in Bukit Mertajam, Kubang Ulu, Bagan Ajam and Kepala Batas. Meanwhile, it has launched 854 units of 3-storey terraced houses, 3-storey semi-dees, 3-storey bungalows, condos, and 2-storey and 3-storey shopoffices over the past two years. These are located in its Orange Villa, Orange Villa 2, Orange Selayang, Orange Garden and Orange Regency developments.

Tambun Indah Land, meanwhile, has ongoing projects in 101.26 acres of land in Butterworth, its flagship Pearl City in Simpang Ampat, Bukit Mertajam, and Jelutong on the island. They are Carissa Villas, Pearl Indah 3, Pearl Residence, Pearl Impian, phase one of Pearl Avenue, Capri Park, BM Residence, Straits Garden, Camellia Park and Permai Residence. Its cumulative GDV is RM971.6 million.

Its remaining projects worth RM3.8 billion are mostly in Pearl City, with the rest in Bukit Mertajam. They are Taman Bukit Residence, phase 2 of Pearl Avenue, Pearl Harmoni, Pearl Tropika, other phases of Pearl City, and Rain Tree Park 1 and 2.

According to a RHB Research Institute note on March 6, terraced houses in Pearl City have seen their values increase by 10% annually over the past six years, while semi-dees and bungalows have appreciated by 5% to 10% on average.

“This is a good indication of demand for affordable housing. We believe the house price in South Seberang Perai will continue to hold up, given the higher entry cost [namely, land cost borne] by other developers,” it said.

According to RHB Research Institute, Tambun Indah Land is eyeing 40% of buyers from Penang Island this year, up from 28% in 2009. Notably, there are also more buyers from Kedah, northern Perak and Kuala Lumpur, who have most likely been drawn by the growing job market in Penang.


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