Monday, 14 November 2011

Penang World City - Leasehold!

After Queensbay, The Light, Straits Quay & Southbay, there will be another luxury water-front project in the east coast of Penang island - Penang World City. This name does not create a "wow" compared to the others. "Ivory Coast" should be a good name but unfortunately, Didier Drogba's country has already claimed this name...

     Penang World City masterplan

The total 102.56 acres (41.5ha) of land in which 35 acres will be reclaimed land, is located at Bayan Mutiara, along the Tun Dato Lim Chong Eu Expressway just south of Penang bridge. It will be jointly developed by Ivory and Dijaya in a 51:49 joint venture.

The RM10 billion Penang World City is a mixed residential and commercial development. Construction is scheduled to commence in year 2012 and the overall project is estimated to be completed in 8 years.

      Luxury Villas - only for the rich

The existing land, which is also reclaimed land, was sold to Ivory in an open tender earlier this year (July 25) at a price of RM240 per square foot. This will generate RM1.07 billion for the Penang government. Ivory need to pay Penang government this sum of money within 5 years.

Ivory has proposed rights issue 1:1 with free warrant and later 1 bonus share for every 4 existing shares to raise fund for the projects. This means that Ivory's outstanding shares will balloon to 418.5 million from current 186 million after the execution.

The Penang World City site which is located between the 2 bridges, close to Bayan Lepas FTZ, Penang International Airport and Georgetown,  is considered a strategic super prime land. It will house luxury high-rise and medium rise condominiums, water villas, grade A office towers, retail spaces, shopping malls, hotels and perhaps a medical specialist center.

      Luxury condos & office blocks

Interestingly, Penang World City will directly compete with The Light and Queensbay which are located close to each other. The Light's progress looks promising while Queensbay seems to stop since the completion of BayStar condominium in 1H 2010. 

In May 2011, the original developer of the Queensbay, CP Land, has sold 40ha of land in Queensbay at RM420 psf to Asia Green Development. A year earlier, CP Land has sold Penang largest Queensbay Shopping Mall to CapitaMalls Asia. 

      Queensbay's previous plan is going into the drain

It seems like Ivory gets a good deal by acquiring the land at RM240psf at the same time, which is almost 50% cheaper than the Queensbay. However, the land in Bayan Mutiara is leasehold. Asia Green, who has a few small scale residential development in the island and Butterworth area, may not be a well-known developer in Penang to most Penangites. I wish they can come out with interesting projects to compete with the others.

      Location of Penang World City

     The Light (right) & Penang World City (left)

For Ivory, their recent projects and reputation are not that good. Can partnership with Dijaya help to increase the success rate of Penang World City?

The general election is approaching. If, if BN regain control in Penang, will Penang World City experience the same fate as Penang Global City Center? Anyway, both the names carry the same meaning.

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