Batu Kawan Lifted To New High By IKEA

Finally... Penangites' dream comes true. 

After years of "rumour", IKEA is edging closer to open its first store outside Klang Valley in Batu Kawan.

Just in this morning, Penang CM Mr LGE has announced in a press conference that the state government and Penang Development Corporation (PDC) will sell a piece of 245-acre land in Batu Kawan to a joint venture company Aspen Vision Land Sdn Bhd-Ikano Pte Ltd for RM483.9mil.

Ikano owns & operates IKEA franchises in Malaysia, Singapore & Thailand, while Aspen Vision Land is a 51% subsidiary of Aspen Group & 49% associate company of Ivory Properties Group. Thus, Ivory has gained an indirect access to Batu Kawan development.

Aspen Group seems to be a new property developer with a few upcoming condo projects in Penang.

       Upcoming condo in Penang by Aspen Group

The 245-acre development planned in Batu Kawan will include:

• 30 acres for IKEA store and phase 1 shopping mall
• 45 acres for phase 2 shopping mall
• 170 acres for mixed development

If not mistaken, IKEA & Ikano Power Center in Mutiara Damansara measure about 13 acres.

The whole development is expected to be completed in 10 years but IKEA store is to be completed in 5 years or sooner.

       IKEA Batu Kawan - at southern part?

Of course this is the best news for Batu Kawan so far, compared to other earlier investment like Honda, Premium Outlet, KDU & University of Hull.

While property may start to cool down in the country, I don't think this is the case for Seberang Perai, especially SPT & SPS. The mixed development by Aspen-Ikano will surely sell like hot cakes.

Direct beneficiaries of increased property demand in Batu Kawan are GOB, Ivory, Malton & Paramount, who already have lands in this area. Other surrounding listed property developers include Tambun Indah, Ecoworld, Mahsing & IJM Land.

It will not be a surprise when the news of other developers acquiring land within or nearby Batu Kawan start to flow in later.

Now people may start to imagine Batu Kawan to be like Damansara.

More Excitement In Seberang Perai Selatan

Mahsing officially joins Seberang Perai property feast by acquiring 76.38acres of freehold land in Jawi for RM42.6mil, or RM12.80 psf.

The land which is said to be opposite the Bukit Jawi Golf Resort, will be developed into a mixed township with an estimated GDV of RM400mil known as Southbay East.

Southbay East... It is quite confusing with its Penang island development, isn't it?

The location of the land should be very close to IJM Land's recent acquisition in Jawi (70 acres at RM18.50 psf).

Ecoworld (60 acres at RM30 psf) and Tambun Indah (24 acres at RM14 psf) recent land purchase is at a totally different area, which is close to Tambun toll, while IJM & Mahsing's land are close to Jawi toll.

With two powerful developers in Jawi, it is expected that the roads connectivity of this area to Batu Kawan & Penang Second Bridge will be improved. Currently if you wish to go to Batu Kawan or second bridge from Jawi or Nibong Tebal area, you need to enter North-South Highway via Jawi toll and exit the upcoming Batu Kawan toll.

If you do not want to pay for the toll, you need to travel a long way north to Tambun area, which is not worth the time and petrol money spent. In the future, there might be a route joining Changkat area (between Jawi & Nibong Tebal) to the south of Batu Kawan.

For me, the location of Mahsing's land is the least strategic among all 4 developers mentioned. It is like in the middle of nowhere. If other ABC developer wish to launch high-end project there, I guess it will have a hard time selling it.

I estimate that a standard size double storey terrace in a gated community in this area should be about RM300k. If Mahsing is going to launch the project now, RM400k a unit is not a surprise. However, Southbay East is expected to be launched only in year 2015.

Since it is Mahsing who has a lot of fans and builds premium quality homes, surely it will not face a big problem selling its products there.

       Bukit Jawi Golf Resort

What I am more concern is, how will the recent influx of branded property developers into mainland Penang affect Tambun Indah's Pearl City?

From experience, township planning & ability to attract business investment point of view, I think Tambun Indah may lose to Mahsing, IJM and Ecoworld.

The advantages that Pearl City has include big land size, location and overall lower land cost, which translates into more competitive selling price.

Fortunately for Tambun Indah, the lands owned by the other 3 developers are not very big and can't be developed into a true mixed township that include shopping complex, medical center or large commercial area. So this is an advantage of Pearl City.

However, Tambun Indah may not have the same ability as Mahsing & IJM in attracting good business investment into its Pearl City business park.

       Proposed Pearl City Mall

Secondly, the location of Pearl City is closer to Bukit Mertajam and those many industrial parks in Seberang Perai Tengah such as Penang Science Park, Bukit Minyak and Perai. Ecoworld shares the same benefit but Mahsing and IJM don't.

In term of distance to Batu Kawan & Penang Second Bridge, all are quite similar but Ecoworld and Tambun Indah have the slight benefit of no need to pay for extra toll.

Ecoworld, IJM and Mahsing surely will build gated & guarded communities which are likely to be priced higher. Thus, Tambun Indah who build gated and non-gated community, can have more flexibility in its pricing.

For me, Tambun Indah will get better if property outlook in Seberang Perai Selatan gets better.

Asas Dunia is another major mainland developer that should not be overlooked, although it has been privatized. It has lots of land in Seberang Perai Selatan bought at very low cost and also starts to build better quality houses to target middle income group. Thus, Asas Dunia is probably the ultimate winner in Seberang Perai Selatan property boom.

       Asas Dunia: 1,118 acres land in SPS

New Addition to the M Series

After M Suites and M City at Jalan Ampang, now comes M Sentral. Although Mah Sing just set to develop 4.08 acres of the total 58 acres mega regeneration project at the moment, it says that it is optimistic to carry out further future development at this site.

If Mah Sing is the prime developer, I guess this project will definitely be a great success, not like the awful Plaza Rakyat project, which remains a hopeless eye sore in one of the most congested area in KL. However, the selling price will not be cheap from the "premier lifestyle developer".

From The Star

PETALING JAYA: Mah Sing Group Bhd has secured a project to develop part of the former Pekeliling flats area into serviced residences and retail units with an estimated gross development value (GDV) of RM900mil.

To be known as M Sentral, the project will comprise serviced residences and retail units along Jalan Tun Razak-Jalan Pahang and forms part of a privatised urban regeneration project in Kuala Lumpur, the property company said in a statement yesterday.

According to Mah Sing’s press release, the entire regeneration project has an estimated GDV of RM9bil, and covers 58 acres. Mah Sing also said that this is the largest privatised urban regeneration project in the city centre, with M Sentral being the first part of the entire project.

      M Sentral: Part of the largest privatised urban regeneration project.

For its venture, Mah Sing’s wholly-owned subsidiary Grand Pavilion Development Sdn Bhd together with private company Asie Sdn Bhd which has full rights to develop the 58 acres and its subsidiary Usaha Nusantara Sdn Bhd will develop 4.08 acres into “smaller sized and more affordable” serviced residences as well as some retail units.

No additional information was provided about Asie. But earlier media reports indicated that the urban renewal development of the decades-old Pekeliling flats dated back to as far as 1997, when the project was approved by Kuala Lumpur City Hall.

     The flats will be demolished soon

Asie was then said to be among several companies that vied for this major renewal project. It is unclear what had stalled the project up to now.

Under the RM900mil GDV joint-venture project between Mah Sing and Asie, there is a provision for a sky bridge connection to the balance of the 58 acres, “with the understanding that Mah Sing may be the potential joint-venture partner for other parcels within the land subject to terms and conditions to be mutually agreed upon,” Mah Sing said.

“I think it stands a good chance (of developing the rest of the land) owing to its track record,” CIMB Investment Bank Bhd research head Terence Wong said.

Analysts noted the project “could not afford to fail” given its prime location in the city centre.

Subject to relevant approvals, the proposed development M Sentral is expected to start by the first half of next year and will be developed over a span of five years.

Wong said the project would be “positive” for Mah Sing in terms of earnings and had inputed a 5% to 10% earnings increase from it together with Mah Sing’s latest acquisition of 205.72 acres of freehold land in Johor Baru for the development of its Mah Sing i-Parc, an integrated industrial and business park.

Mah Sing group managing director Tan Sri Leong Hoy Kum said in the statement: “Acquisition of strategically located land is part of our growth strategy, and urban renewal projects allow access to prime land in the city centre.

“M Sentral is just the beginning as we would like to take part in more urban regeneration projects by both the Government and the private sector.”

Mah Sing’s well-known property development projects include M-Suites and M-City, both located along Jalan Ampang, KL.

Leong said M Sentral was poised to be “the next major transit hub” and the target market for the project included local executives and expatriates.

 

    Up til Titiwangsa lake.

M Sentral is within the catchment area of Kuala Lumpur, Jalan Ipoh, Sentul and also Petaling Jaya as it is close to transportation facilities such as light rail transit (LRT) and monorail stations, he said, noting that the Titiwangsa Monorail Station and the Titiwangsa LRT stations were within walking distance while the Sentul KTM station was about 3 km away.

A future mass rapid transit has also been planned for Titiwangsa, according to Leong.

Under the joint-venture agreement, Mah Sing’s unit Grand Pavilion will be granted the right to undertake the development of the land for RM106.6mil. This amount will be partly settled in cash (RM63.96mil) and partly by giving Asie’s unit Usaha Nusantara, a 40% stake in Grand Pavillion.