CUT AND KEEP
JAN 17, 2014
Penang’s
commercial
property
market
>Factors drivingPenang’s commercial propertydemand
Last
week, this column
discussed the strength of
Penang’s residential property
sector. Still focusing on the
Pearl of the Orient, we now
examine its rising commercial
property demand.
With a thriving property
market, Penang has flourished
into a commercial hub capable
of attracting the nation’s top
developers. Themany projects
burgeoning here are also a
testament of the long-term
confidence that the government,
major developers and investors
have for the future of this state
as amajor commercial
property destination.
Strength in numbers
The National Property Information
Centre (NAPIC) reports the total
number of commercial transactions
for the third quarter of 2013, as 642
properties, valued at RM646.16
million. This makes the commercial
sector the thirdmost transacted
property sub sector, after residential
and development land. During the
same period the year before, data
collected shows 722 properties valued
at RM384.32 million. Although the
number of transactions has decreased,
there is a surge in the value of the
transactions, considerably.
increasing need for
office space
Aptly earning itself the title “Silicon
Valley of the East”, Penang is a hub for
the electronics andmanufacturing
sectors. It is home tomultinational
companies like Intel, Dell, Motorola,
Agilent, Hitachi, Osram, Seagate and
Bosch to name a few.
The state also received the
“Multimedia Super Corridor Cyber
City” status early in 2005. Under the
9thMalaysia Plan, Penang was
declared a “Northern
Corridor Economic Region
(NCER)” - an initiative set
to accelerate economic
growth and elevate the
state to become amodern
metropolis. With these
ambitious initiatives by
the government, Penang is
set to seemore
multinational companies
establishing themselves
there, consequently leading
to an increased need for
office space.
Administrative faith
According toMark Saw, the
executive director of PPC
International Penang and
branch chairman of the
Malaysian Institute of Estate
Agents (MIEA), Penang is
attractive to developers
because of its stable
progressive government.
Penang World City
• Located in Bayan Mutiara
• Integrated seafront development
• Includes a shopping mall, office
suites, retail spaces and hotel
• High value location with close
proximity to ports
• Next to Penang Bridge
• Development by Ivory Properties
Group Berhad and Tropicana
Corporation Berhad
Commercial projects towatch
The
Light Waterfront - phase 2
• Designed as part of Penang’s first
integrated retail, leisure,
entertainment and cultural
destination within an up market
residential enclave
• Built on reclaimed land, off the
Jelutong expressway
• Near Penang Bridge
• Commercial district which includes
hotels, the marina, a shopping mall
and an office tower
• Development by IJM Land
Number of commercial property
transactions during Q3 2013
Type
Total
Vacant plot
31
Pre-war shop
91
1-1½ storey shop
12
2-2½ storey shop
208
3-3½ storey shop
112
4-4½ storey shop
1
5-5½ storey shop
0
6-6½ storey shop
0
Shop unit/Retail lot
133
Office lot
49
Shopping complex
0
Purpose-built office
1
Hotel/Service apartment 0
Leisure
0
Others
4
Total
642
“Confidence is a key factor when any
developer considers whether to invest
and develop an area. Investors and
developers continue to flock to
Penang as it has a level playing field
that allows for active competition and
a good government proactive in
ensuring a transparent development
process. This makes investors
comfortable doing business in
Penang,” he reasons.
Occupancy figures
What makes a commercial property
a success or not, is the strength of its
occupancy. As documented by
NAPIC, the following are the supply
and demand statistics for commercial
properties in Penang during the third
quarter of 2013.
• Purpose built offices - There
was a supply of 233 newpurpose
built offices with a total existing
space of 1,064,119 sqm. Out of this,
857,476 sqmwere occupied,
resulting in an occupancy rate
of 80.6%.
• Shopping complexes - There
were 95 shopping complex units
with a space of 1,479,114 sqm. The
occupancy rate was 68.9%with
1,018,541 sqmoccupied.
There was also a plan to supply
451 shop units during this period.
These statistics validate the
active need for commercial
properties in Penang.
Premium areas
According to Raymond Loo, business
development manager at Prima Harta
(Penang), themost popular
commercial areas in Penang are found
within the George Town heritage
zone. An example would be Pulau
Tikus. He adds that demand is also
rising in areas like Tanjung Tokong,
Bayan Baru and Jelutong. “Many
properties were sold for more than
RM1,000 psf in these popular
commercial zones, with some even
going over RM2,000 psf,” Loo says.
The outlook
Industry experts concur that Penang
has one of themost speculated
propertymarkets in the country, but
with the recent regulation changes,
themarket has been affected. “After
the recent rise in Real Property Gains
Tax (RPGT) by the federal
government and the 2% levy tax by the
state government, most buyers are
cautious with their investments. They
are carefullywatching themarket
development to see if there are any
desperate sales,” says Loo.
“This year, the commercial
market should see a plateau for the
first sixmonths, while investors,
speculators, developers and even
banks, take stock of themarket.
Once this has been done and new
property regulations placed by the
government are accepted and taken
into account by investors, there
should be an upswing in the
market,” Sawof MIEA remarks.
Property conference projects
exciting
scope in 2014
This
year’s Property Outlook
Conference attracted a
record full-house. Around
1,600 information-hungry
participants attended the
two-day conference
conducted at Hotel Istana
in Kuala Lumpur.
Many conference -attendees,
which included developers,
investors, property owners and
interested investors, felt that
the topics were being discussed
at an appropriate time.
All
13 professional experts
shared valuable information,
beneficial tips and precision
guidance on propertymarket
trends and relevant issues.
In effect, this postulated
actionable guidelines to
manywho had been in the
wait-and-watchmode due to
the increments in RPGT and
levy tax.
From the real estate in
Malaysia and the Asean region,
to investing in industrial and
commercial properties, the best
and strategic locations including
IskandarMalaysia, even a step-by-
step offer on how to achieve
infinite returns on one’s
property investments.
Past conference participants
even brought familymembers and
friends this year; all who left with a
wealth of knowledge and
confidence tomake better
investments in 2014.
The conference took off with
the presentation of tokens to event
business partners. This was
followedwith the launch of the
conference, welcoming the first
speaker, Veena Loh, on stage.
Others involved in Saturday’s
programme were Datuk George
Stewart LaBrooy, Elvin Fernandez,
VincentWong, KKWong,
Datuk Soo Kai Chee and Yap Shin
Siang. The first day alsowitnessed
many participants take up Vincent
Wong’s offer to learn the ropes on
“Lease Options” which he founded.
Although the agenda was pretty
heavy, participants made their way
the following day to hear the
remaining speakers - Siva
Shanker, Datuk Sri Dr Vincent
Tiew, MilanDoshi, Prudence
Wong, Renesial Leong and
Dr Daniel Gambero - share their
insights on property.
At the end of the conference,
many delegates confirmed having
gained incisive insights and better
understanding of theMalaysian
propertymarket. Theywere also
able to perceive the relevant
investment opportunities in 2014.
Picture retrieved fromwww.facebook.com/PenangWorldCity
Picture retrieved fromwww.thelightwaterfront.com/iconic.html
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