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Showing posts with label Penang Heritage Property. Show all posts
Showing posts with label Penang Heritage Property. Show all posts

Sunday 3 April 2016

The allure of Penang heritage properties

Prized property: The Chimes Heritage building at Jalan Bawasah, Penang. The value of heritage properties has increased by 37 to 157 per sq ft since 2008 due to the investments made by Penangites staying overseas and by Singaporeans.

Value of such assets has jumped by as much as 157% psf


THE heritage property segment is still attracting strong interest from investors despite the softening of the overall property market in Penang.

The value of heritage properties has increased by about 37% to 157% per sq ft (psf) since 2008 due to investments made by Penangites staying overseas and by Singaporeans.

Depending on the location, size, and condition of the heritage properties, the present pricing on a psf basis ranges from RM550 per sq ft (psf) to RM1,800 psf, compared to between RM400 psf and RM700 psf in 2008.

According to the National Property Information Centre (Napic), a locally registered company, World Class Land Sdn Bhd, snapped up over 60 pre-war houses in George Town’s heritage areas for about RM122mil.

Raine & Horne Malaysia senior partner Michael Geh says the properties were sold between late 2013 and August 2015.

“The most expensive pre-war property, with a 1,363q ft land area and located in Chulia Street, was sold for over RM2,000 psf,” he says.

It is learnt that about RM30mil would be spent for restoring the properties, as the cost of restoration is about RM500,000 per unit.

The company also acquired a 30,000 sq ft of land in Magazine Road for about RM36.9mil. “This was the highest transaction for a vacant land in 2015, as the sale was transacted at RM1,250 psf,” Geh adds.

Geh says locals tend not to pay attention to the capital appreciation of heritage properties, although the value had risen substantially since 2008.

“They should invest because the supply of heritage properties is limited.

“There only some 3,853 units of such properties in George Town’s heritage core and buffer areas, according to George Town World Heritage Inc.

“Because the supply is limited, it is safe to invest, as the value would tend to rise than fall.

“I urged Penangites to acquire heritage properties for own use and enjoy the capital appreciation that would occur incrementally,” he says.

Because of the strong appreciation in the value of pre-war houses, the rental yield of such properties has remained unattractive.

In 2008, the rental of heritage properties, depending on the location, size, and condition of the heritage properties, ranged between RM1,000 and RM3,000, compared to the rental today which is between RM3,000 and RM8,000.

“Calculated on a yearly basis, the rental yield is not attractive.

“Today the yield is about 4.8%, compared to about 4.5% in 2008

“This shows that the value has appreciated faster than the rentals, as there is very little demand to rent properties in the state,” he says.

According to Geh, local investors should pay attention in particular to the heritage properties in the Prangin Market or Sia Boey area, as it has been earmarked for the location of the central LRT station on the island, which would boost the value of the properties in the area.

Meanwhile, the Malaysian Institute of Architects (PAM, Northern Chapter) chairman Datuk Lawrence Lim says the cost of restoring heritage properties has increased by about 40% since 2008.

“Today the cost to restore such houses ranged between RM150,000 and RM500,000 per unit.

“A simple restoration for a heritage property with a 2,000 sq ft built-up area can cost about RM150,000.

“It cost just RM50,000 to restore the roof of a heritage house,” he says.

Despite the increased in the cost of restoration, there are local investors who are still investing in heritage properties.

Lim, who is also East Design managing director, says the company was now undertaking restoration projects for heritage houses in Hong Kong Street and Magazine Road.

“We will be restoring the Koon Kee office building at Hong Kong Street, the manufacturer of Penang’s famous white coffee.

“The other project involves the restoration of 10 pre-war units in Magazine Road for commercial usage,” Lim says.

Datuk Ooi Sian Hian, who is also Ghee Hiang group executive chairman, says he will be restoring the heritage property of his family’s maternal grandparents at 123 Macalister Road.

The property, measuring 3,600 sq ft in built-up area, sitting on a 30,000 sq ft site, was built in the 19th century, and came under the ownership of Ooi’s maternal grandparents in the 1950s.

“We are getting local architects and architectural students through the assistance of PAM to come up with a suitable design concept to restore the property.

“It will be up to the architectural fraternity to decide on the appropriate design concept for the property.

“Whether it will be restored for commercial or residential usage will depend on their design.

“We plan to kick off the project in two year’s time,” Ooi says.

Ooi’s family has 10 properties at Prangin Lane, nine of which he will restore at a later date for commercial re-use.

“The properties have been passed down from the maternal grandparents.

“We want to wait and see what the market for restored heritage properties is like first, as there are already in the market many such restored heritage projects.

“We also want to wait for the state government’s Sia Boey project to be completed first, as the site has been earmarked for a LRT project hub,” he adds.

Ooi says he is submitting a plan to restore the tenth heritage terraced property located in Prangin Lane, which has a built-up area of 1,620q ft.

“We are naming it Jumpa@41PranginLane, which will be restored as a event centre for pop-up markets, seminars, stage plays, and culinary events,” he says.

Under Ghee Hiang, the group is now restoring its heritage property at 61 Beach Street, which has over 3,000q ft in built-up area.

“It is the Ghee Hiang Group’s Concept Lifestyle In-Store, which will be designed to accommodate a living heritage museum showcasing the history of the group’s history and tau sar pneah products and a lifestyle themed cafe,” he says.

Khoo Kongsi trustee Datuk Khoo Kay Hock says the clan association has restored 16 pre-war properties and had leased them to a hotel operator.

“The properties are undergoing interior refurbishment now, and scheduled for opening in the second half of 2016.

“About RM4mil was invested to restore the properties, which were completely restored two years,” he says.

According to George Town World Heritage Inc general manager Dr Ang Ming Chee, there are 3771 heritage properties in George Town belonging to category II.

“Category II properties are those residences and business premises that have existed for generations.

“They were built to support the traditional beliefs of the inhabitants and users.

“In the George Town’s World Heritage Site (WHS), there are 82 buildings, gateways, cemeteries, and sites categorised as Category 1.

“Category 1 buildings and monuments are important because they reflect the authenticity of the cultural landscape and therefore the outstanding universal values of the world heritage site (WHS),” she adds.

By David Tan The Star

Related:

Penang Heritage Property - Residences Heritage Property Penang Malaysia





Penang Heritage Buildings / World Heritage Sites