The trend for developers in Penang is to build smaller-sized stratified homes which are considered affordable in view of a cooling property market.
Henry Butcher Malaysia (Penang) vice-president Shawn Ong says in an interview that the trend started last year.
“It is easier to market a 1,000 sq ft condominium priced at RM550 per sq ft compared with a similarly priced 2,000 sq ft unit, as the smaller unit falls within the income range of most investors.
“The smaller stratified homes usually have built-up areas ranging between 1,000 sq ft and 1,500 sq ft, and are priced from RM500 per sq ft onwards.
“There is at least a 20% difference between the asking price and the actual transacted price for sub-sales properties,” Ong says.
In the North-East district, the trend of developing “buy-to-let” high-rise properties, which have proven to be successful in United States, Hong Kong, and Singapore has caught on in prime locations such as Tanjung Tokong.
Developers such as BSG Property, the property arm of Boon Siew Group, see opportunities in building corporate suites which can be leased out for guaranteed returns in view of the growing tourism market and the shortage of hotel rooms in George Town.
Most of the smaller sized stratified properties, with built-up areas between 1,000 sq ft and 1,500 sq ft, are being developed in the South-West district of Penang and are priced between RM530 per sq ft and over RM600 per sq ft.
For the second half of 2013, some RM1.32bil worth of smaller affordable condominiums are being developed in the South-West district, which comprises residential-cum-commercial neighbourhoods such as Batu Maung, Balik Pulau, Sungai Ara, Bayan Lepas and Relau.
Ideal Property Sdn Bhd is launching the second phase of Imperial Residences which is located on a six-acre site in Sungai Ara. It will have a gross development value of RM470mil and the RM250mil Solaria condominium scheme in Bayan Lepas later this year.
“There are 816 condominiums in the three towers for the second phase of Imperial Residences while the Solaria project comprises 285 condominiums and 20 double-storey shops,” its managing director Datuk Alex Ooi says.
The Solaria units have built-up areas of 1,130 sq ft and are priced from RM600 per sq ft onwards.
Ideal is currently undertaking some 1,200 condominiums in Bayan Lepas and Sungai Ara, which are over 80% sold, and are scheduled for completion in three years.
These are condominiums with built-up areas of 1,000 sq ft and above and are priced from RM400 per sq ft onwards.
SP Setia Bhd plans to launch the RM600mil Setia Sky Vista condominium project later this year in Relau.
“The Setia Sky Vista, comprising 400 condominiums in four blocks, is located on a 15-acre site,” SP Setia Property (North) general manager Khoo Teck Chong says.
The built-up areas of the units ranged between 973 sq ft and 1,500 sq ft and the selling price starts from RM550 per sq ft.
Khoo says the group will also be launching the RM140mil Setia V Residence Tower B on a 1.8-acre site in the fourth quarter this year.
Besides these projects, the group will still have 56.8 acres of land in the South-West district to launch some RM1.13bil worth of properties.
“This includes projects for a RM148mil landed property project on a 20-acre site in Balik Pulau planned for next year,” he says.
In the higher-end category, Mah Sing Group Bhd plans to launch a RM200mil project for Southbay City in Batu Maung comprising 100 condominiums, 126 office suites, and 12 two-storey shops in the fourth quarter 2013.
Group deputy general manager Yeoh Chee Beng says the residential units, in a 30-storey block, have built-up areas of 1,200 sq ft onwards.
“The offices, in an 18-storey tower, and shops have built-up areas that starts respectively from 600 sq ft and 1,050 sq ft onwards.
“The selling price for the properties are approximately RM1,000 per sq ft,” Yeoh says.
BSG Property business development manager Chong Hock Aun says the group is undertaking the development of 242 corporate suites for The Landmark commercial-cum-residential scheme in Tanjung Tokong. This is scheduled for completion in 2017.
The 242 corporate units are in a 41-storey tower, which also has 66 residential condominiums. The residential units will have their own separate lift lobby.
The fully-furnished corporate suites, which have built-up areas ranging between 799 sq ft and 1,899 sq ft are targeted at investors who are looking for steady returns, as there is a 6% guaranteed rental returns per annum for two years, according to Chong.
“They can either live in the units, which are designed for family dwelling and corporate use, or lease it.
“This is a low-risk real estate investment scheme, as the properties will be rented out on a daily basis by a reputable hotel operator.
“The targeted segments are the tourism and the corporate markets.
“This scheme has been tried and tested and proven to be successful in countries such as United States, Hong Kong, and Singapore.
“We will explore more such ‘buy-to-let’ schemes in the future,” Chong says.
According to the Penang Valuation and Property Services Department report, the volume of residential property transactions for the first quarter 2013 declined by 15.7% to 4,200 units from 4,981 units in the same period of 2012.
Henry Butcher Penang vice-president Shawn Ong says the slowdown in residential property transactions will continue in the second half due to tighter credit conditions imposed by banks.
“There is still interest in property purchases. However, due to the high and unreasonable pricing, property investors are waiting for prices to readjust before buying,” he says.
Raine & Horne Malaysia (Penang) director Michael Geh says that both the value and volume of transactions will contract this year by double-digits.
According to the latest National Property Information Centre’s (Napic) report, there is an existing stock of 367,158 units of residential properties in Penang in the second quarter 2013, compared with 366,265 units in the previous quarter.
The report says until the second quarter of 2013, there is an incoming supply of 48,076 units, while 45,153 units are under construction.
The planned new supply for the second quarter is 46,610 units, the report adds.
According to NAPIC, the total transactions of residential properties in Penang dropped to 23,266 in 2012 from 30,674 in 2011.
The total value of transactions has also dropped to RM7bil in 2012 from RM7.7bil in 2011, the Napic report said.
“However, the average price of a unit has increased by 21% in 2012 compared with 2011,” Ong says. - By DAVID TAN (The Star)