Commercial property glut in Penang

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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:

Occupancy rates:

  • 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.
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PR Man

Hello? Glad to hear that you campaigned so vigorously and voted for DAP! So what makes the about turn? In so short a period of time? Less than twenty months? Come on, as an infant, we are just starting to walk a bit steadily after a 20 months of life, and that too with proper care. Here we have everyone going after LGE’s head, some because of the inability to secure contracts, some because of vested interests and there always some under the sour grapes group? Which one art thou Gerakan K? Remember, Gerakan had under KTK, uninterrupted and excellent… Read more »

Penang Bolih

K, I admire your patience but, really I think the truth has to be said. These DAP Cyberjellyfish are onto anilnetto.com talking crap. Haven’t you noticed? Isn’t it obvious, cyberjellyfish are paid or hope to be paid — to do the job of discrediting every issue raised that is not pro dap.

Para cyberjellyfish, go find a decent way of livelihood la.

wira

There are 2 sides to a coin, 2 opposite stands to an argument. When the government is listening, it doesn’t mean it has to be agreeable to you before you call it a government of the people. Businessmen and investors are people too and they also deserve to be given attentive ears. There must be a balance to the needs of everyone and the final stand taken must be seen fair. I don’t think any PR state government has the ability to crush a dissent. They have to cross over to BN, at least for the next 3 years, to… Read more »

K

Dear DAP Cybertroopers As I had said many times here before, just because we disagree with LGE and his destructive, diasaterous policies it doesn’t mean we are BN lovers. I am not sure about others here, certainly I voted and campaigned vigourously for DAP in the last GE. However, many of us have become disillustioned and now even alarmed with the unkept promises and 360 degree aboutturn on policies by LGE’s Development Above People. Here’s a classic example where the people who speak up for goog governance and justice are being accused of being anti government. This reminds me of… Read more »

Jessica

Wait – that includes the 19 year old boy name Dalbinder. He speaks half truth…challenges an ADUN for a debate and tries to inflitrate into the State Government through various means. I hope he wakes up because he is one confused boy.

PR Man

Agreed, Vinnan. Gerakan K and Ong Eu Soon are definitely people with vested interests, more so the latter, not so much the former, but we need to commend him for his endless pro BN stand that is beyond reasons at times! Cannot accept the new political landscape, I guess after decades of good times? Stay on and bide your time, as it is, Penang is LGE to lose if he mismanages the place. Sometimes, it is difficult to meet the requests of all. This we must accept, but, he needs to understand the sentiments of Penangnites, like the Botanical Garden… Read more »

vinnan

Last time I looked out the window into the world of the private sector it said “You risk your money, whether you prosper or you die is your own fate”. How can LGE be held responsible ove5r how the private sector invest its money. People like Gerakan K and Ong Eu Soon have been living under the BN tempurung to understand that no one owes you a living in the real world of the private sector.

Loh Yeow Boo - Penang

Morning Dew is talking about the rare-earth project by Lynas in Kuantan. http://www.lynascorp.com
The reason they are here is because Australia (allegedly) is against the processing of rare earth over there and also the shipment of the earth from China to Oz.

ramlee

Eu soon- you are a menace to many

lineclear

Dear Brothers

“Penang Boleh” to provided if PCCC and Tan Kok Ping put forward the pproposal to LGE.

rgds

wira

Government ought to butt out of private enterprise. If there is overbuilding for private projects, the industry will regulate itself. People who walk the talk with their own money should be allowed to continue.

KWMoon

Actually there are two-sides to a coin. You may argue that to build during this time would be lower in costs. It takes at least two to three years for the project to be ready for use. By that time, economy should pick up. So we cannot make decisions just based on present situation, as far as properties are concerned. How we wish we have a crystal ball!

Eloi

There has to be a balance of both development and maintenance. At any given point the balance can shift from one end to the other. Both gives economic value to the state. Currently, with global downturn in the tourist industry building new hotels and tourist destinations would seem irrational but there is another point of view. If the industry picks up in the future, will Penang be ready to cater for the influx? We may at that point judge the government for lack of future insight and preparedness. It is a gamble and I know the feeling. Penang has tourism… Read more »

Morning Dew

“Economic decisions is economic and not social in nature. Social values does not generate income. It requires giving not taking (A Loss).” – Eloi This is a rather short sighted view of life. Economics decision cannot and should not be made in vacuum, divorced from the rest of life. A good example would be the experiences of developed nations. At the point in which economic decisions were to be made it often seemed economically sound until years down the road where society has to pay for the cost of economic decisions earlier on. Kuantan has a project at the moment… Read more »

looes74

Morning,
Keyword here is to strike a balance. Singapore has always been a socialist state. But Singapore realise that it needed money to develop the country. LKY & his first generation government resulting in “prostituting” themselves in attracting investments from overseas. With funds, LKY can initiate programmes such as beautification of River of Singapore. Now, it’s drinkable with reservoir created in Marina Bay
Anil is a naturalist but not a good government leader. Good government leader must cover all corners

Morning Dew

This was something I wrote in response to a video protraying LKY in not so nice terms. The comment was from http://mt.m2day.org/2008/content/view/23711/34/. There is a subtle but vital difference between balance and manipulation and control. I supposed after this post LKY’s (supporters) will come after me again. —-start quote—– Much of what was said is not new. The principles enunciated in the video continue to be valid and relevant. Many of the events and personalities that had been affected one way or another by KuanYew were only given very scant mention. Much of the details could of course be found… Read more »

looes74

Morning Dew,
There would always be people not supporting any causes. One can’t please eveybody
As for Singapore, lets the fact speaks for itself. Like the Great Deng said

Regardless of white or black cat, a cat catches mices is a good cat

Of course, the matter that Penang Government must take seriously. However, intervention by the state must be done with tact. It’s better to have glut rather than shortage resulting in skyrocketting price
Penang government could charge upsize the land development fee. Penang government is still lacking of fund so to speak

kingkong

Morning Dew

Many of us will still in Tongshan or Himalayas. Why the pommies kill the big cats (tigers) and destroy the jungles and tin mining the earth? In doing so, they have to get workers and professionals from those places in before the WW2. many of us will still in India, Sri lanka (to be kiled in the civil wars) or Warlords of China, Famine, Rabies in India or Hunger in China. What say you?

Morning Dew

I don’t quite follow your logic or illogic. Are you saying that singapore’s approach to economic development by suppressing dissent and sacrificing basic human decency and values is the way forward for malaysia and others ? Or are you argueing as the singapore government often argued that a few rights and values and human (freedoms) have to be sacrificed for the greater good of the society ? If it is then read again the metaphor I used about the bonsai plant. There is a better way forward and malaysia under the right leadership could bring forth a new and better… Read more »

Ong Eu Soon

The Gurney Paragon project consists of two 43-storey service apartment towers, a 37-storey business tower and other commercial buildings.

Another Tesco near the Island Plaza

LGE is asking the traders in all the shopping complexs to vote against him when biz is bad.

Gerakan K

What more to expect from LGE administration?
High Speed Demolish & Build. This should be their day-to-day standard operating principle. Luckily he only a Penang CM. I cannot imagine if he is Sabah, Sarawak, Pahang or Selangor CM/MB. We will observe new standard operating princple: “Let’s CAT the forest” or “Concrete the forest competition”

sabahan

don’t … lah Gerakan K, Sabah problems worst than Penang. The only problem is main stream media don’t dare to report the short fall.
If BN so good why Sabah until today Still do not have a decent hospital?…