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.
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.
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.