RFP for Bayan Mutiara project a good move, says Rehda Penang

GEORGE TOWN: Plans by the state government to tender out the development of Bayan Mutiara in a bid to raise much-needed funds for its social programmes have been hailed as a step in the right direction for Penang to achieve its vision of becoming an international city.

Real Estate and Housing Developers Association (Rehda) Penang chairman Datuk Jerry Chan said it was a good move as it dovetailed into the state's planning.

The state has made a request for proposals (RFP) for the multi-billion ringgit development of almost 100 acres (40.47ha) of land at Bayan Mutiara, which under the previous Barisan Nasional (BN) state government had been earmarked for the new state administrative centre.

The RFP, inviting local and regional players, is to develop 62 acres of Bayan Mutiara, a new development area located south of the Penang Bridge overlooking Pulau Jerejak, with the potential to develop an additional 35 acres via reclamation in future after the development of the initial 62 acres.

The reserve price of the land is expected to be above RM200 per sq ft which would mean that the 97-acre site (60 acres with 35 acres to be reclaimed) could fetch above RM870 million.

"The state government's move is the right thing as it is also sourcing for funds via this project. It will need to ensure that the low-income and mid-income strata of the population are not left out of the stream of development.

"It is good there is transparency on how this is being done and let the best man win. When looking for 'suitors', it is only obvious to look for the best, either locally or on an international platform.

"If you want to do something big that is integrated like the KLCC or Suntech City or Marina Bay development in Singapore, you need the big boys," Chan told The Edge Financial Daily.

He said an open tender would extract maximum value for the land. "The value brought in by the development should bring in more investments, create jobs and result in a lot of spillover," Chan said.

Meanwhile, Henry Butcher Malaysia (Penang) Sdn Bhd director Teoh Poh Huat said the project provided a great opportunity for developers to participate in creating international city stature for Penang.

"With Penang becoming well known internationally and with the property market now in recovery mode, it is anticipated that many foreign and local developers will show interest.

"Henry Butcher has received requests for market intelligence from interested parties since the project was announced in June. The land size offers many options to create a fascinating city-within-a-city concept, especially one with an urban waterfront theme," Teoh added.

Industry sources said among those keen to submit a proposal for the development of the land were leading developers S P Setia Bhd and IJM Land Bhd.

S P Setia is currently the only developer without any development projects along Penang's southern corridor which already has the presence of the big boys.

Mah Sing Group Bhd is planning a township in Batu Maung, just two minutes away from the Penang Bridge; Ivory Properties Group Bhd has a presence via The View Twin Towers in Batu Uban while CP Land is developing the 73-acre Queensbay in the southeast. IJM's RM5 billion The Light project, right next to the Penang Bridge, is already underway and on schedule.

A property developer however expressed scepticism if any company would pay the high price to develop the integrated parcel of property.

"It would be much more feasible if the state government carries out the reclamation and then it would get a better value by selling the land piece by piece instead of the entire 100-odd acres.

"The value of land in George Town now is between RM220 and RM270 per sq ft, and in some areas even RM300 per sq ft while in Pulau Tikus, which is a mature neighbourhood, the going rate is RM250 per sq ft.

"Even at RM200 per sq ft, the end sum is too big as the banks would not want to finance the purchase," the source said, suggesting that the state reclaim the land at a cost of between RM60 million and RM70 million or RM50 per sq ft.

"All the state government needs to do is to come up with a masterplan, reclaim it bit by bit and then sell it and make more money this way. Even the zoning can be controlled by the state government, instead of just leaving it to one developer," he added.

The RFP documents will be available from Aug16 at the Penang Development Corporation office in Penang and also in Kuala Lumpur and Singapore. The last day for submission is Dec 31.