Hunza eyes IMT growth triangle for new township

GEORGE TOWN: Hunza Properties Bhd is targeting the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), consisting of north Peninsular Malaysia, southern Thailand and Sumatra with a combined population of over 40 million, for its new integrated township development in Bayan Baru on the south western end of Penang island.

Hunza, which bought the 42-acre site for RM82 million last year at RM45 per sq ft, is planning between 8.5 million and 10 million sq ft of residential and commercial space for the township, with a gross development value (GDV) expected to run into billions of ringgit.

Executive chairman Datuk Khor Teng Tong said the recent revision of density guidelines by the state government would allow at least 3,200 high-end residential units to be built within the township.

The units would range from studio to larger units sized between 1,500 and 1,600 sq ft and Hunza expects to develop the township over seven years once the project gets off the ground within the next few years.

The Penang Island Municipal Council (MPPP) had in July last year revised the plot ratio guidelines for high-rise properties on the island which allowed developers to build up to 87 units with a total built-up area of 122,000 sq ft per acre compared with 42,000 sq ft per acre previously but had imposed pricing conditions on the units.
Khor: The outlook for property market is set to remain positive.
Previously, the plot ratio guideline for high-rise units on the island was 60 units per acre or 42,000 sq ft per acre.

The new plot ratio guidelines are not applicable for prime residential areas such as Jalan Tunku Abdul Rahman (popularly known as Ayer Rajah Road), the Jesselton area, existing established housing zones and general housing areas, the George Town Heritage Site (which includes the buffer zone), certain areas in Tanjung Bungah and Tanjung Tokong.

Speaking at a briefing on its half-year financial results ended Dec 31, Khor said while it was in the midst of settling more than 800 squatters living on the land, Hunza is also scouting for international consultants to plan the integrated city.

“This township is in tandem with the state government’s vision to turn Penang into an international city,” Khor said.

Among the 10 components of the project are an arena of international standard with a seating capacity of between 4,000 and 5,000 people, high-end condominiums, commercial centre, hotel and service apartments.

Khor believes that demand for properties in Penang will continue to be strong for residential units in the face of shortage.

Quoting press reports that supply on the island in 2009 was reduced by 2,600 units for various types of residences, Khor said there was also a shortage in 2010.

“Going forward, the shortfall in supply in properties cannot be overcome nor addressed in the short term as the population in Penang has been increasing steadily over the years from 1.4 million to 1.6 million in 2010.

“This will lead to a situation where supply cannot meet demand and this will contribute to the increasing trend in property prices.

“The fact that the island is scarce of land supply has caused land prices to accelerate further and other factors like increase in building material prices and labour costs, and inflation have also contributed to higher property prices on the island,” he added.

Khor said that with Penang leading the nation with RM12.2 billion investments in 2010, it would also attract more skilled human talent, which would also enhance demand for high-end property on the island.

Thus, the outlook for the property market is set to remain positive, he added.

Hunza recorded RM128.2 million in revenue and RM44.7 million in net profit after tax for the six months ended Dec 31, an increase of 10.13% and 73.93% from RM116.4 million and RM25.7 million respectively from the previous corresponding period.

Khor said among Hunza’s projects, Gurney Pragon condominiums are expected to be completed in 2011, while the shopping mall would start operations in the second half of 2012.

Alila II, a high-rise green building joint venture project with a GDV of RM300 million, comprising 260 units at Lembah Permai on the island, is also expected to be launched soon.

Beside the 42-acre site at Bayan Baru, Khor said Hunza’s landbank includes 450 acres in Kepala Batas, 350 acres in Sungai Petani, Kedah, 37 acres in Juru on the mainland for commercial development and another 6.5 acres in Segambut, neighbouring Mont Kiara, the where construction of 400 high-end units with a GDV of RM300 million will commence next year.

This article appeared in The Edge Financial Daily, February 18, 2011.

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