Cover An aerial view of George Town, Penang (Photo: iStock)

If you’re thinking of investing in a property in Penang’s UNESCO Heritage zone, here’s a guide to the market before taking the plunge

In 2021, Penang is ranked the third best island in the world and first in Asia to retire by Travel Awaits magazine. Noted for its multiculturalism, great culinary scene, and connectivity to other countries in the region, there isn’t much doubt that Penang is a great place not just to retire but to live.

While the island has plenty of properties of all kinds, it is also uniquely placed to offer heritage properties. We speak to Mark Saw, executive director of Knight Frank’s Penang Branch, about the outlook of this highly desirable (and finite) segment.

See also: 4 Malaysian Heritage Vacation Stays For An Immersive Cultural Experience

Why invest in a heritage property?

The most important factor influencing a buyer’ s preference would be the location of the property. Heritage properties in Penang especially in George Town became a preferred location for investors after its listing as a UNESCO World Heritage Site in 2008. George Town has always been at the centre of commerce and has seen a revitalisation over the past decade resulting in high volume of heritage property transactions within the heritage enclave.

Another aspect of buying the heritage property is the Return of Investment (ROI), where most heritage property buyers expect long-term high capital appreciation. After the listing in 2008, Penang heritage property values and rentals did see an increase due to the limited supply of heritage properties coming onto the market in the early years of listing.

Penang as a tourist favourite spot is one factor that investors think can yield high returns. As a result, most heritage properties have been converted to commercial businesses such as hotels, cafes, souvenir shop and others. However, high prices, rental control, and high restoration costs have seen heritage properties achieving less in high rental yield.

Another factor which investors appreciate is the historical value of Penang's unique architecture influenced by its multicultural heritage which they want to preserve and maintain.

See also: Home Tour: History Meets Modernity In This Heritage Home In Penang

Are there any areas in George Town considered more desirable than others?

The main preferences for property investors are within the UNESCO World Heritage Site (UWHS). UWHS consists of two zones, the core zone and the buffer zone. Both zones, with wide sea frontage, infrastructure, near or in business areas, government offices and main tourist attraction, have usually fetched higher rental and prices.



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Within the core zone, Chulia Street, Love Lane and Armenian Street have become popular tourist spots that have the potential to attract property investors.

Demands are also improving in the buffer zone of Prangin Lane, Kimberly Street, Lorong Carnarvon as well as heritage houses on Ceylon Lane and Noordin Street.


Beach Street, which is located in the core zone, has become a favourite spot for corporate companies as there's a lot of banking institutions here. The future tram and monorail plan under the Penang Transport Masterplan (PTMP) are expected to spur the property market within this area.

One should also note that for heritage properties which are not located within the UNESCO World Heritage Site, their demand and capital value might be lower than those in George Town.

What is the average price per square foot?

According to data obtained by National Property Information Centre (NAPIC), the average value of pre-war properties within the heritage zone was around RM470,000 in 2008, and peaking at RM2.3 million in 2015. The years after 2015 saw a drop in value until 2021 when the average price fell below RM1 million.

The Covid-19 pandemic happened in early 2020, and in tandem, the average price started to decrease resulting in a 30 per cent drop in Q12021 (RM955,862) compared to the previous quarter Q42020 (RM1,377,500). However, when compared to 2020 (RM1,207,179) and 2019 (RM 1,737,263), the average price dropped by 31 per cent.

See also: Why Are Shophouses In Singapore In Such High Demand?


Selected pre-war properties located within the Core Zone such as Love Lane, Lebuh Muntri, Lebuh Pantai, Lebuh Victoria and Lebuh King George Town city centre transacted higher between RM1,100 psf to RM2,300 psf for selected range land sizes between 1,500 sq ft and 1,900 sq ft. Meanwhile properties located in less prime locations transacted around RM1,300 psf to RM1,700 psf for selected range land size between 1,100 sq ft and 1,700 sq ft

Selected pre-war properties located within the buffer zone (Jalan Penang area) have transacted around RM600 psf to RM1,200 psf for selected range land size between 740 sq ft and 1,500 sq ft for such locations as Lebuh Leith, Lebuh Cintra and Lebuh Kimberley. Properties located at less prime locations transacted between RM700 psf to RM1,000 psf for the selected range land size between 900 sq ft and 1,000 sq ft.

However, prices may vary depending on several factors like location, property condition, heritage guidelines of pre-war properties, tenure and government guidelines.

See also: Meet The Malaysian Architects Rebooting Heritage Buildings

Are there more local or foreign buyers snapping up heritage houses in Penang?

Heritage properties within inner city of George Town have over the years attracted both individual local and foreign buyers. However, in recent years there were foreign companies especially from Singapore who could see the value and took the risk to invest in such properties. By rehabilitating them they were able to change the landscape within the inner city.

What purpose do they usually have for their properties?

Like any property investor buying a heritage property, they plan to make money either via a capital increase upon sale or rental return and as a result, many were converted and rented out for commercial purposes such as F&B, boutique hotels, hotels, cafes, restaurants and even museums or galleries.

See also: Book Xcess & 3 More Bookshops We Love In Penang


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Beautifully restored 5 foot way in Georgetown. Photo from iStock
Above Beautifully restored five-foot way in George Town (Photo: iStock)

What are the consequence of this interest in Penang heritage properties?

The refurbishing and restoring of heritage properties have generally uplifted the image of the city; however, conservation purists would argue the soul of the city was lost during this transition

See also: Home Tour: A Heritage Penang Shophouse Transformed Into A Modern Loft

What’s the outlook for heritage properties in Penang?

The volume of transactions will probably continue to remain low for the rest of the year with prices of pre-war or heritage properties expected to also remain depressed. Additionally due to the pandemic, occupancy rates may also drop significantly as tenants or business owners shut down their business in order to ease financial burden.

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