The Amazing Penang World City

The previous article stating that Penang World City is probably a leasehold project (here) is not correct. It is actually freehold with its first residential project, Bay Residences, launched earlier this year.

Enjoy the amazing artist impression of Penang World City. 

  

        Strategic location

        Bay Residence launched

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.

Dijaya Prepares to Fly?

In the last 5-6 months, Dijaya has acquired 569 acres of land in Klang Valley and Johor to bring its total land bank to 708 acres, including an one-acre freehold land at Jalan Sultan Ismail! Overall, it is estimated to give a GDV of RM18 billion to the company in the next 8-10 years.

According to CEO Danny Tan, Dijaya is targeting sales of RM500mil for FY2011, RM820mil in FY2012 and RM1.24bil in FY2013. As at September 2011, the company has unbilled sales of RM472mil. However, its revenue in 1H2011 is only at RM128 million.

Dijaya plans to launch RM800mil worth of new projects this year, RM1bil next year and RM1.3bil in 2013.

Date	Projects	Location	Type	GDV RM
Nov 2011	Tropicana Avenue	Petaling Jaya	Commoercial	412 mil
Dec 2011	Tropicana Danga Bay	Johor	Mixed	3.8 bil
Early 2012	Tropicana Cheras	Sg Long	Residential	185 mil
1H 2012	Tropicana Danga Cove	Johor	Mixed	2.8 bil
June 2012	Tropicana Hills	Subang	Mixed	3.5 bil
June 2012	Tropicana Bayou	Balakong	Residential	400 mil
2H 2012	Tropicana Gardens	Kota Damansara	Mixed	1.8 bil

     Tropicana Danga Bay - masterplan

These are just plans. We may have heard before that Dijaya plans to launch some of the above projects this year and now they have been postponed to next year. If the world economy is slow to recover, they may be postponed again.

RM mil	Revenue	Net Profit
2006	180	41
2007	254	49
2008	247	33
2009	311	50
2010	292	45

For the past 5 years, Dijaya makes decent profit but its revenue and profit are quite stagnant. There is no persistent growth like Mahsing & SP Setia. Nevertheless, the profit margin is quite good.

Now, after "consolidating" for so many years, Dijaya thinks it's time to take off and fly. With its ambition and land on hand, Dijaya might have a bright future if everything goes according to plan.

     Tropicana City Mall - PJ

Who Own Aston Villa?

 

When the housing project of "Aston Villa" was launched around 2009 in Bukit Mertajam, a sales gallery with a huge word of "IVORY" was set up on the site. Initially the take up rate was quite promising. 

Aston Villa (not English football club) is a luxury residential project with 3-storey terrace and semi-detached houses with a big land and built-up area. It also contains a row of 4-storey shop offices, and a proposed alfresco F&B outlets space as future development. Its initial price for 3-storey terrace is around RM470,000 about 2 years ago and now it is selling at RM550,000. The semi-D goes above RM800,000 each.

    Aston Villa

From my observation, the construction seems to be in a tortoise pace until recently in 2011, the pace only starts to pick up. I notice that not only Ivory is involved, Dijaya is also the developer of this project, and New Bob Realty is busy selling the remaining units. You can see Aston Villa in Ivory and Dijaya websites.

From the promotion flyer of Aston Villa, it is printed that it is a project by Dijaya, Ivory is the turnkey developer and New Bob is the marketing agent. It just gives me an impression that Dijaya and Ivory do not take this project seriously...

Anyway, is it a good project? Aston Villa is located at the heart of Bukit Mertajam town. If you don't mind the air and noise pollution of a city center, then staying here is quite convenient. However, there is a trend that more and more young people are moving out from the city center to new township at the periphery such as Alma, Bukit Minyak, Juru etc. The streets in BM old town has been dominated by foreign workers especially in weekends and public holidays.

     Retail space

There is a shopping mall BM Plaza adjacent to Aston Villa, which is used as a selling point for Aston Villa. This mall is quickly run out of favour and has been a heaven for foreign workers, especially after the opening of Seberang Perai City featuring Jusco at Bandar Perda. GSC cinema and McDonalds in BM Plaza closed down long ago. Now its anchor tenant The Store supermarket will also leave soon, followed by a few tenants. The buses in the bus terminal there keep on pumping thick black exhaust smoke into the air.

However, if the developer transform this area into an exclusive area and attracts major franchises to its commercial area, Aston Villa could still be a thriving place. But who will do it?