Penang residential estate market remains lacklustre

PETALING JAYA (Feb 1): The general performance and outlook for the property market in Penang is still lacklustre as both economic conditions and general public sentiments are down, said real estate firm Knight Frank Malaysia in its “Real Estate Highlights 2H2016” report.

“Declines in both transaction volume and value have set the mood, resulting in some developers deferring their launches and pushing back plans for development.

“The residential sub-sector is experiencing a period of consolidation and readjustment in terms of both rentals and sales where improvements are not expected in the near term.

According to Knight Frank, there were fewer recorded transactions of high-end condominiums in the secondary market in 2H2016 compared with 1H2016.

“One large unit of 6,523 sq ft in size at Sky Home in Tanjung Bungah was transacted at RM598 psf while smaller-sized units of 2,000 sq ft to 2,400 sq ft in Gurney Paragon, Gurney Drive and Quayside Condo, Seri Tanjung Pinang were resold at prices ranging from RM1,000 psf to RM1,170 psf.

“Past transactions in 2015 for smaller-sized units in Gurney Paragon and Seri Tanjung Pinang have recorded prices ranging from RM830 psf to RM1,330 psf,” said the report.

Asking rents are slightly lower when compared to 1H2016.

“For larger-sized units (3,500 sq ft to 6,500 sq ft) in Tanjung Bungah, asking rents generally range from RM1.10 psf to RM2.00 psf per month while the upper band of asking rents is also noted to be lower — ranging from RM2.10 psf to RM2.50 psf per month.

“For similar-sized units in Gurney Drive, asking rents vary from RM1.80 psf to RM2.60 psf per month while for smaller-sized units in Tanjung Tokong and Gurney Drive, asking rents are in the range of RM2.20 psf to RM2.90 psf per month with some landlords asking higher rents of RM3.00 psf to RM3.80 psf per month,” added Knight Frank.

The office sub-sector, however, is more stable with both occupancies and rentals maintaining what was achieved in 1H2016. “This could be due to little incoming supply,” said the firm.

The existing supply of office space (10 storeys and above) on Penang Island remains the same as 1H2016 which is 5.59 million sq ft.

Occupancy rates for the four prime office buildings monitored in George Town ranged from 85% to 100% while newer buildings such as Suntech and Menara IJM Land, located out of the city centre, recorded an average occupancy rate of about 98% as of December 2016.