Knight Frank reports that the Penang state government recently announced an increase in development density to 128 units per acre, up from the current 87 units per acre, in order to provide more affordable housing in the state. To take 2017, units built under this new guideline must not be less than 900 sq ft. Prices are being finetuned at the moment. 

Also, as part of the RM46 billion Penang Transport Master Plan (PTMP), the Penang state government has decided on a RM4.8 billion elevated light rail transit (LRT) system, rather than a tram system in the state. This proposed 22km LRT system will operate between Weld Quay and the Penang International Airport and under the PTMP, it will also feature a 20km Pan Island Link highway. 

Market Indications 

According to Property Market Report 1H2016, the total volume of transactions for all sectors in the State of Penang for 1H2016 registered a drop of 18.2% and 11.6% when measured against 1H2015 and 2H2015 respectively. Similarly, in terms of value of transactions, the decreases are recorded at 26.7% and at 11% when compared against 1H2015 and 2H2015 respectively. 

Residential transactions which made up 73.1% [was 69.1% (1H2015) & 72.9% (2H2015)] of the total volume, recorded a drop of 13.5% and 15.7% in terms of volume and value of transactions done respectively when compared against 1H2015 and with decreases of 11.3% & 
12.6% against 2H2015. For the period compared, namely 1H2016 vs 2H2015, all sub sectors recorded lower number of transactions; in terms of value of transactions, the scenario is the same with decreases varying from 10.2% (development lands) to 72.2% (others) except for Industrial properties which recorded an increase of 60%. 

The Eco World Group has purchased two parcels of land, totaling 374 acres, in Seberang Perai Selatan, Penang from Batu Kawan Development Sdn Bhd for RM875.24 million (or about RM53.64 per sq ft collectively). Plans are afoot for a RM7.76 billion mixed-development
project comprising gated and guarded strata landed properties and integrated commercial projects to be developed over a period of 10 years via Eco Horizon and Eco Sun. 

SP Setia Bhd is planning to develop an eco-themed mixed development township on a recently acquired site in Seberang Perai Utara in Penang. The developer had been successful with their tender bid of RM620 million for a 1,675- acre freehold site in Seberang Perai Utara. The mixed development township has a potential gross development value (GDV) of RM9.6 billion spanning over 15 to 20 years.

IJM Land Bhd will start work on the 2nd phase of The Light Waterfront project at the end of 2016. This RM3 billion JV project with Perennial Real Estate Holdings Ltd will comprise a retail mall with 1.6 million sq ft of gross floor area (GFA), an office tower block with 40,000
sq ft GFA, a convention hall and function rooms with 100,000 sq ft GFA, two residential towers, and two hotels offering a total of 750 rooms. It is understood that of the RM3 billion development cost, RM678 million will be for the residential component, RM270 million for the office tower, RM580 million for the hotels, RM330 million for the Penang Waterfront Convention Centre with the balance for the mall and retail outlets. 

Paramount Group’s property arm has launched its first development in Penang, the 44.3-acre Utropolis Batu Kawan university metropolis development worth an estimated GDV of RM1.8 billion. To be developed over a 10-year span, this integrated development will be divided
into four phases comprising residential, commercial, retail and hotel components and a new flagship campus for KDU Penang University College to be on a 10.5 acre site. The campus, which is owned and operated by Paramount’s education division, will be able to house
up to 5,000 students when completed in 2H2019.

High End Condominium

With the slowdown of the property market coupled with tightened lending conditions from financial institutions and the cautious attitude of local buyers, property developers face a slow take-up in their offerings. There are not many launches of high end condominiums in 2H2016.

IJM Land has, in November, soft launched their Waterside Residence condominium to be built on a 4.27-acre site as part of The Light Waterfront phase 2. Located close to a planned shopping mall and convention centre and with an estimated GDV of RM240 million, it
is targeted at buyers who are looking for modern lifestyle homes. Waterside Residence will feature 256 units of 2- and 3-bedroom units with built-up sizes of 1,055 sq ft, 1,249 sq ft and 1,270 sq ft and at prices starting from RM749,000

Click the link below to download the full report.