While more property development projects are in the pipeline, the research unit of a local bank, CIMB Research, has reportedly warned of a “significant” commercial property glut in Penang. From an Edge report:
- Office space: 76% (the lowest in Malaysia)
- Retail space: <70% (second lowest in Malaysia)
“There appears to be a significant glut in Penang, which would worsen if more office and retail space were built.”
- Beach hotels: 63% (3rd quarter, 2009)
- George Town hotels: 68%
- Hotels outside city: 37%
“Even for hotels, we understand that rooms are only full during peak periods and occupancy is relatively low at other times. If three new hotels are built in The Light and two in Southbay, they need to satisfy the requirements for commercial activities there and should not be just for holidaymakers. If commercial buildings in Penang already have one of the lowest occupancy rates in Malaysia, hotels built around them are likely to suffer the same fate,” it added.
“The opening of new hotels could exert more pressure on occupancy rates in Penang unless commercial activities pick up sufficiently to bring in more travellers.”
Yet, five major property projects are in the pipeline, according to the same Edge report.
- Bayan Mutiara – a 30-acre commercial and residential development;
- Gurney Drive offshore – proposed reclamation of land along Gurney Drive (for what project?);
- Komtar Phase 5 – at the former Prangin Market and 46 units of pre-war houses on a five-acre site have been allocated for rehabilitation and redevelopment;
- Relau/Paya Terubong Hill – a 400-acre plot “with an elevation of 250ft to 1,700ft” (Is property development allowed on hilly land above 250ft?); and
- Batu Kawan land – a 6,000-acre plot on the mainland near the Second Penang Bridge.