A field guide to three of the most expensive neighbourhoods in Penang and why buying a property in these areas is a smart investment
Penang is a great place to visit and an even better place to live in. What makes this Malaysian state, comprising an island and part of the mainland, such a desirable destination? And where should you buy if money is no object?
We speak to the executive director of Knight Frank Penang, Mark Saw about the most expensive neighbourhoods in Penang, why they are prized, and what the forecast is if you're thinking of investing in real estate there.
Why is buying property in Penang a good investment?
Penang has a rich historical background of multiculturalism and the best culinary scene that has seen the state ranked as the 1st Best Island in Asia and 3rd Best Island in the world to retire in 2021 by Travel Awaits. Penang also started the new year of 2022 being named by CNN Travel as one of the 22 best destinations to visit in 2022. The uniqueness of her community has influenced the unique architecture and townscape of Penang for generations.
The strategic location between the Straits of Malacca and the Andaman Sea has made Penang one of the favourite tourism destinations as well as strong foreign buyers coming from China, Europe, Japan, Korea, Singapore and Indonesia.
The Penang residential property market has seen recovery with the volume of transactions recording an increase of 18.8 per cent to 9,192 units in 1Q-3Q2021 compared to 7,739 units in 1Q-3Q2020. The total transacted value in the residential sub-sector also increased by 37 per cent in 1Q-3Q2021 (RM4,078.48 million) when compared to 1Q-3Q2020 (RM2,977.94 million). The recovery of the property market is probably attributed to various government incentives such as the reintroduced Home Ownership Campaign (which ended on 31 December 2021) and the low-interest-rate environment.
Generally, Penang has five districts of which three are on the mainland, namely Seberang Perai Utara, Seberang Perai Tengah and Seberang Perai Selatan while the districts of Timur Laut and Barat Daya are located on the island. Timur Laut on Penang Island, being the most attractive district is where the capital city George Town is located. George Town, which has been gazetted as a UNESCO World Heritage Site in 2008, has become a favourite spot for its variety of cuisines, historic architecture, luxury properties and beaches.
District of Timur Laut is ranked top as a popular location by foreign buyers and continues to record the highest number of transactions on a year to year basis. Land scarcity coupled with high demand are amongst the key factors driving up both property values and rental prices within this District.
The future development of the Penang Transport under its Master Plan, the upgrading and refurbishment of Swettenham Pier Cruise Terminal (SPCT), development at Gurney Wharf are among the mega projects expected to boost Penang’s attraction and its property market as well as increase lifestyle living of those residing in Penang. Thus, Penang is definitely a great destination and wonderful location not only for property investment but also to live.
1. Gurney Drive, George Town
Gurney Drive is well known and continues to be the most preferred location by investors. This road is characterised by high-end condominiums, prime shopping malls Gurney Plaza and Gurney Paragon, landed properties and commercial properties. It is also the tourist spot for street food.
This seafront promenade along Gurney Drive will be developed into a recreational waterfront project known as Gurney Wharf. The project, a partnership between the Penang State Government and Think City, is expected to deliver significant new opportunities for Penangites via publicly accessible waterfront promenades plus retail, education, lifestyle and transport amenities. The proposed Gurney Wharf concept masterplan encompasses four distinct areas: seaside retail F&B, water gardens, beach and coastal grove.
This project spans 40 acres out of the 131.09-acre reclaimed land along Gurney Drive and will be developed in two phases. Phase 1, known as Priority One, will feature a children’s playground, skate park, viewing deck, promenade pavements, hawkers’ kiosks, landscape and recreational park and an open car park. It is expected to be ready by end of 2022. As for Phase 2 which will be known as Priority Two, it will consist of a hawker centre, north vantage point viewing deck, additional hawker kiosks, multi-storey car park, open car parks, boardwalk and the beachfront, a water garden, a stormwater channel, the water taxi jetty and part of the water body reclamation. The entire project is expected to be completed by 2023.
Notable high-end condominiums along Gurney Drive include Gurney Paragon Residences, 8 Gurney Condominium, 11 Gurney Condominium, Silverton, Gurney Beach Resort Condominium, The Regency and the new Setia V Residences.
Being one of the most famous areas in Penang, the upcoming projects within this area are expected to enhance the ecosystem and promote a conducive lifestyle as well as attract more investors to stay. With land scarcity, a growing population, and the vibrant business activities in the neighbourhood, we anticipate that the property values of landed and stratified properties in the area will continue to hold and rise gradually.
Three highest transactions of condominiums over a three-year period:
In addition, Penang’s first luxury branded residences known as Marriott Residences is also located along this famed road. It will feature a range of small sized units from 850 sq ft to 3,134 sq ft. The selling prices start from RM1.5 million to over RM6 million. The development is expected to complete in 2023 together with the Marriott Hotel and Executive Apartments.
2. Seri Tanjong Pinang, Tanjong Tokong
Seri Tanjung Pinang, a reclamation project by Eastern & Oriental Berhad (E&O), comprises two phases. It is situated at the northeast coast of Tanjung Tokong between George Town and the famous Batu Ferringhi beaches. The first phase Seri Tanjung Pinang 1 (STP 1) comprised 240 acres of reclamation land and was completed in 2006.
The development of the second phase, Andaman Island (previously known as Seri Tanjung Pinang 2 (STP 2)), commenced in 2016 and is currently still ongoing. The site, spanning 760 acres, is located right opposite Gurney Drive. It is planned to be a catalyst of growth for the high-profile neighbourhood which offers unique architecture and design inspired by Penang’s unique Straits-eclectic architecture as well as good amenities.
Eastern and Oriental Bhd (E&O) has also commenced the launch of its next iconic address called the Andaman Island. Located just across the waterway from STP 1, it is planned for an integrated township consisting of mixed residential, commercial, retail, health and wellness as well as education. The well-planned masterplan will feature smooth connectivity and sustainability offering a balanced lifestyle. The Meg will be the first project on Andaman Island, offering freehold serviced apartments consisting of 1,020 units housed in two blocks spread over four acres of land.
The reclamation of STP 1, an upper-class residential suburb of Tanjung Tokong, will feature mixed-use components with seafront villas, semi-detached homes, contemporary terraces, high-end condominiums, executive apartments as well as low- and medium-cost apartments and other amenities like Straits Quay retail marina. Notable existing and completed developments include Seri Tanjung Pinang landed properties, Quayside Seafront Resort Condominiums, City of Dream and Straits Residences. STP enjoys wide views of the Andaman Sea – it is one of the most sought-after residential addresses among locals and international purchasers.
The ongoing reclamation projects for Phase 2 known as Andaman Island, together with Gurney Wharf and the Penang Transport Master Plan (PTMP) are expected to enhance the surrounding areas, boosting the property market performance here as well as Gurney Drive. Overall, the sea fronting Seri Tanjung Pinang project certainly appears to be a prime investment.
Three highest transactions of bungalows over a five-year period:
Three highest land transactions over a 5-year period:
3. Pulau Tikus
Pulau Tikus is a mature residential area with expensive high-rises and older established homes and neighbourhoods. An upper-class little city named after a small rocky island shaped like a mouse, it is situated just behind Gurney Drive and close to George Town. It is also home to Penang’s Governor, Chief Minister and mayor as well as the consulates for China, Indonesia, Japan and Thailand. A small minority of Eurasians, Thais and Burmese also reside here. The houses in this established upper-class neighbourhood are made up of mansions, colonial buildings, bungalows, semi-detached and terraced houses. The neighbourhood enjoys easy access to amenities like hospitals, schools and malls.
Most wealthy people who want privacy prefer this area because of the tranquil living environment amidst nature. Apart from luxury and stratified houses, Pulau Tikus also offers vacant residential plots.
We forecast the values of properties in Pulau Tikus will remain resilient due to the resident’s profiles and the older established neighbourhood status.
Three highest transactions of bungalows over a five-year period:
Three highest land transactions over a five-year period: