Penang Set to Rise Above Challenging Property Market

Penang Set to Rise Above Challenging Property Market

From her early day as a straits settlement Penang’s idyllic charm has drawn the interest of locals and foreigners. Penang’s successful embracing of development while retaining her heritage and traditions through the careful preservation of people’s way of life, pre-war architecture and historical sites is well appreciated.  Penang is one of Malaysia’s most developed and economically significant states. Its comprehensive infrastructure supports multinational corporations, educational institutions, medical centres, manufacturing hubs and a vibrant hospitality industry driven primarily by tourists from all over the world.

Residential and commercial property market continues to thrive

Despite the softening of the property market, Penang has managed to sustain a high level of activity in both the residential and commercial development sectors. Early this year Datuk Lee Kah Choon, Director at invest Penang, announced that Penang will see RM5 billion worth of investments coming into the state in 2015 from four multinational corporations (MNCs) involved in electronic-based manufacturing activities. A major infrastructural development is the state’s maiden LRT project, a 17.5km elevated stretch linking Komtar with the Penang International Airport. Construction of the project is to commence in 2016 and will see the initial implementation of the RM27 billion Penang Transport Master Plan (PTMP), which also includes a 25km expressway linking Bayan Lepas and Tanjung Bungah. The state government also recently confirmed reports that it would introduce trams as part of the PTMP within the Georgetown Heritage Zone which will only add to Penang’s charm and boost its tourism industry.

Property prices in Penang began showing a notable increase in the mid-2000s with areas on the Island, particularly Georgetown experiencing the greatest appreciation. This year a slight setback is being seen on the island with fewer residential property launches due to the growing shortage of land and a challenging property market environment. It is now Seberang Prai that is drawing the attention of developers. The recently opened 24-km second bridge connecting Batu Maung on the island and Batu Kawan in South of Seberang Prai has seen an increase in development on both ends of the bridge. Batu Kawan is the site for a premium retail outlet known as Penang Designer Village. The RM1 billion massive project will be headlined by a regional integrated shopping haven anchored by IKEA and include a mixed development of residences, offices, medical facilities, a 20-acre park, an international school, standalone retail outlets and an integrated central transportation hub for Seberang Perai.

Penang’s tourism industry has been a primary catalyst of its growth. Ten new hotels, which are currently under construction, are set to open for business by the end of 2015 to cater to its growing numbers of local and international tourists. In June, Hilton Worldwide announced that it will open the country’s first DoubleTree Resort in the Batu Ferringhi hospitality belt. One of the main attractions of the hotel will be the introduction of Malaysia’s first teddy bear themed museum and gallery — Teddyville — located within the building itself.

Mega projects in the pipeline

Another mega project that has come under much spotlight is the Penang’s Undersea Tunnel, a 6.5km tunnel linking Gurney Drive on the island and Bagan Ajam on the mainland. The proposed undersea tunnel which will be the third link between Penang and the mainland will not only reduce traffic congestion, but is expected to spur economic growth in Seberang Perai Utara. Although the project has drawn some criticism from the public, the state government is confident that it will be a game changer for northern Seberang Perai residents and the overall development of the island.

Butterworth is also a recipient of Khazanah Nasional’s Think City Grant which is a community based urban regeneration initiative. Recipients of the award  will carry out joint projects to improve living spaces and public amenities and work on a wide range of projects involving arts, heritage, culture, environment and economic resilience.   The core area designated for regeneration in Butterworth covers three linked roads – Jalan Bagan Luar, Jalan Jeti Lama and Jalan Telaga Air.

Conclusion

Despite the many economic opportunities accorded by market centres such as the capital city of Kuala Lumpur and the southern corridor of Iskandar, Penang with its golden beaches, rich cultural heritage, a multi-ethnic population and a thriving commercial landscape continues to present multiple opportunities for growth.

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