Monday 7 December 2015

Huayang Joins The Bustling Jalan Baru

Huayang really surprised me by announcing another land acquisition in Penang mainland.

It will acquire all the shares of G Land Development for RM16.6mil, who will acquire 6 parcels of freehold land in Prai, Penang mainland for RM25mil.

So the total cost will be RM41.6mil, or about RM110 psf.

The land has an area of 8.59 acres (net 6.98 acres), is 3km from Penang bridge and is accessible through federal road (Jalan Baru).

Remember that in my last post about Huayang, I wrote that I saw Huayang's new sales office at The Frontage fronting Jalan Baru?

At that time I was a bit puzzled why Huayang sell its property in Bukit Mertajam but set up its sales office in Prai, though both location are actually not far away.

Now I know the reason.

          Huayang's new sales office at The Frontage, Jalan Baru

When talking about Bukit Mertajam, the hot area is Jalan Song Ban Kheng.

When talking about Prai area, the hot area now is undoubtedly Jalan Baru.

Jalan Baru is bustling right now, with new condos such as Pinang Laguna, Palma Laguna and The Signature completed.

Condos nearby include Prominence, BM City Mall, Kelisa Residence, K Residence & Primero Heights.

Besides, there are also other upcoming condos by Aroma & Wern Properties along Jalan Baru.

Mydin Hypermarket which was opposite of Huayang's new sales office, was just opened last month.

A new KFC drive-thru restaurant was also being set up recently.

Belleview Group, a famous private developer in Penang, planned a "bigger than Mid-Valley" shopping mall and office tower on the other side of the road.

This land that Huayang proposed to acquire is previously owned by GSD Land who has already planned a development called "The Presidence" here since 2012.

The Presidence comprises a 44-storey 480-unit services apartment and 15 units shop offices.

According to the announcement, Huayang's initial plan is to develop 480 units of service apartment, 148 units of condominiums and 16 units of double storey shops with estimated GDV of RM311mil.

Will there be any oversupply situation in Jalan Baru? May be there is, to be frank, but I think property here will have good demand because of its superb location.

While that stretch of Jalan Baru is a booming area, the land that Huayang acquires is not perfect as it is located next to high voltage powerlines.

          Huayang's land at Jalan Baru, Prai

So, there might be a concern whether Huayang's project here will sell well or not.

Definitely some buyers/investors will not consider this project just because of the powerlines.

However, this issue may not concern some other buyers/investors as long as the location, concept and price are good.

Tambun Indah's completed apartment Kelisa Residence launched in 2011 is also located right next to this high voltage powerlines but it is completely sold out.

In Klang Valley, there are quite a lot of projects developed next to the powerlines but it seems like it doesn't matter too much.

Anyway, we can only wait and see whether Huayang has made a correct or wrong decision.

Current subsale market asking price for adjacent Pinang Laguna is about RM300-350psf, while newer Palma Laguna is about RM350-400psf.

Huayang might price its project here at RM350-400psf I guess.

       Part of Huayang's land seen from Pinang/Palma Laguna

How many pieces of lands that Huayang has in Penang now?

It's a bit confusing to me.

Initially in Jan15, Huayang first invaded Penang by acquiring 2 parcels of land in Bukit Mertajam (4.9 acres + 3.14 acres), though it seemed to announce only one of them (4.9 acres).

Then penangpropertytalk website in Sep15 revealed an upcoming development by Huayang in Bukit Minyak, which is within Bukit Mertajam.

This is confirmed as Huayang's subsidiary Tinggian Development has submitted planning permission to develop 90 units strata-titled landed houses and one block medium cost 41-storey apartment with 268 units in Aug15, and it has actually been approved in Oct15.

Initially I thought this Bukit Minyak land is the 3.14 acres land that Huayang acquired in Jan15, even though it seems too small to accommodate such development.

In Nov15, it was reported that Huayang has aborted one of the earlier land deals in Bukit Mertajam, which is the land with size 3.14 acres.

Is this aborted deal referring to Bukit Minyak land? I'm not sure but I don't think it is. The planning permission was actually approved by the authorities.

One day after Huayang submitted its application of planning permission for Bukit Minyak land through Tinggian Development, a company known as G Land Development also submitted its building plan for its phase 1 project at Jalan Baru which comprises a 44-storey 480-unit serviced apartment.

This building plan has been approved since early Oct15.

Now we know that G Land will be acquired by Huayang. So Huayang might start to sell this project as soon as when the land deal is completed in the first quarter of calendar year 2016.

It should contribute to its sales in FY17 starting from 1st Apr 2016.

As a shareholder of Huayang and a Penangite, I view this acquisition positively and hope that the deal will not be terminated like the previous two.


  1. aiya all prop in every Malaysia corner strategic or not strategic sure die de la.

    juz like Tsunami, all sapu.

    Are u strudying EG ind? Penang company wor, fast fast post

    1. Compared to others, I think the downside of property stocks is relatively small now, esp for those with high DY. Just diversify a bit and treat it as 6% FD :)

      As for EG, I have briefly studied it last month. It's all about change in business focus to improve the pathetic profit margin. Now it has begun to show great result in its latest Q, though revenue trends down a bit. I think it is not cheap now (98sen) though further growth is still likely.

  2. I foresee Belleview project will sell well. I was eyeing it's small condo unit above the shopping mall when I heard about this project some years back. I went to their sales office a few times to check out when would be the launching, but it has been delayed till now.. till I have no bullet left :(
    I foresee the condo there will have good rental market for expatriate. I got to know quite a number of expatriate who work in Kulim or other mainland areas live in Harbour Place condos (PJD project) now. I believe once the Belleview project is ready, it will attract the expatriate to move there due to more amenities, shopping mall below and better location.
    Belleview is a good developer and has developed many good projects in Pg island.
    The expected selling price should be the highest per sqft in mainland condo, probably in between RM500 and RM600 per sqft if launch in 2016.
    I would not hesitate to buy if I can afford.

    1. I'm actually wary of serviced apartment with shopping mall below. If the mall is successful like Queensbay mall/Gurney Plaza, then it's very good. If not (like Megamall Pinang just opposite it), personally I will not choose to stay there. May be we can use Belleview's own All Season Park as a guide.

      There is also one such development in BM City Mall. Wish to see the outcome soon.

      I foresee my next property investment, if I can still afford, is to be in Batu Kawan. Paramount may launch its project there soon. I wish it won't be too soon :)

  3. Yeah, Batu Kawan is going to explode with excitement in years to come. It's just there are many leasehold lands (PDC's lands) there, so if I were to invest in Batu Kawan's property, I would prefer to pick the freehold one.
    For a shopping mall to be successful, my personal observation is the developer should not sell the individual shop-lot, but should own the whole mall instead and rent out to individuals. Alternatively, the developer can sell the whole mall to a group, eg CMMT. This will give better management and ensure the success of a mall. The good examples are Gurney Plaza and Sunway Carnival.
    The bad examples would be Megamall Pinang, One-Stop and Times Square in Pg Island. In those cases, the developer had sold the shop-lots to separate owners.
    I was told Belleview would not sell the shop-lots to separate owners when complete, so it should not end up like Megamall. Besides, even without shopping mall below, the location at that spot of Jln Baru is still strategic to be a residential condo, I think :)

    1. Yeah, I don't think Belleview will prefer quick money by selling retail lots in its upcoming mall. It's a surprise to me that Capital 21 in Johor still sells them to investors. Though this mall seems to be highly rated, I'm curious to know how will it end like. When Megamall Pinang, One stop, BJ complex etc were newly launched, it looked like a great success. However, it just took one economy downturn to destroy them... BM got lots of abandoned shopping malls and all those investors are stuck there.