Penang’s construction industry is expected to stay flat this year with a value of about RM6.8bil, which is almost the same in 2014.
“The RM6.8bil mark is one of the highest in the history of the construction industry in Penang.
“Due to the economic slowdown, it will be difficult to surpass this figure,” said Penang Master Builders and Building Materials Dealers Association president Datuk Lim Kai Seng.
Lim said the bulk of the projects were hotel and mixed development schemes.
“For the first six months of this year, the value of jobs given out reached RM2.68bil for 171 contracts.
“Of that total, some 153 are from the private sector while the remainder are government contracts,” he added.
The value of contracts from the private sector is around RM2.47bil, while government contracts total RM214mil.
The business contracts generated in 2014 was revised to RM6.8bil from RM4.8bil announced previously, after taking into consideration projects tendered out in late 2014.
Lim said that the association was confident that there were at least over RM4bil contracts given out in Penang in the second half of 2015.
These contracts, he said, were for mainly new hotels and mixed integrated developments.
Some of the big projects are from IJM Land Bhd with a gross development value (GDV) of RM486mil, Eco World Development Group Bhd (GDV: RM600mil), Mah Sing Group Bhd (GDV: RM1.005bil), Sunway Bhd (GDV: RM150mil), Ivory Properties Group Bhd (GDV: RM1.156bil) and Ideal Property Group (GDV: RM1.8bil).
Lim pointed out that the construction cost for the projects would come up to about 40% or about RM2bil of the total RM5bil GDV.
“The renovation will cost about 30% or RM600mil of the RM2bil spending for construction works.
“We can expect spending of over RM800mil for construction and renovation works annually for the next three years from these projects alone,” he added.
Lim said the new shopping malls being planned now would also generate about RM3.5bil worth of jobs for the local construction industry over the next five years.
“This means that there will be about RM800mil to RM1bil worth of construction jobs given out in Penang per annum starting from next year,” he said.
These shopping malls include Penang Times Square Phase 3 which will have a net lettable area (NLA) of 230,000 sq ft, City Mall Bayan City (300,000 sq ft), Southbay Plaza (424,000 sq ft), Penang World City (1 million sq ft), Sunshine Tower (2 million sq ft), The Light Waterfront Mall (1 million sq ft), Mall@Southbay City (750,000 sq ft), The Designer Village (400,000 sq ft), Ikea & Ikano Power Centre (NLA not available), and a mall project by Belleview Goup (1.5 million sq ft). - By David Tan (The Star)