Industrial uptrend in Penang for next year
12 Jun 2023
Industrial property transactions and prices in Penang are likely to rise by about 10% in 2024 due to the growing demand for industrial properties.
One Asia Property Consultants (Pg) Sdn Bhd executive director Chandra Mohan Krishnan said the current pricing, which was at RM65 per sq ft to RM90 per sq ft, was likely to be adjusted upwards.
According to the National Property Information Centre (Napic) report, industrial property transactions in Penang had increased to 522 last year from 464 in 2021.
“The value of the transacted industrial properties also increased to RM1.62bil in 2022 from RM1.61bil in 2021.
“In 2024, we expect to see the number of industrial property transactions surge by 10%,” he told StarBiz.
The Napic report noted the Northern Seberang Prai (SPU) is an up-and-coming site for new industrial investments.
SPU registered 77 industrial property transactions with a value of RM67.39mil in 2022 compared with 70 in 2021, that were valued at RM73.7mil.
The transaction value contracted because large tracts of land were transacted, leading pricing to usually decrease, according to Chandra.
In the first quarter of 2023, some 142 industrial properties were transacted in Penang compared with 110 in the previous year’s corresponding period.
Both Central Seberang Prai (SPT) and South Seberang Prai (SPS) recorded 260 and 107 industrial property transactions respectively in 2022 compared with 224 and 95 respectively in 2021.
“About 30% of the first phase of the Penang Technology Park or PTP@Bertam has been sold since its launch in March 2023. The surrounding housing estate and educational institutions and PTP’s accessibility to the North-South Highway Bertam Toll and Butterworth-Kulim Expressway enhance the park’s appeal,” he said.
The Napic report revealed that the industrial sub-sector in the country recorded 8,082 transactions worth RM21.16bil in 2022.
Compared with 2021, the market activity increased by 44.5% in volume and 24.8% in value.
The industrial overhang situation remained manageable. The overhang volume decreased to 880 units worth nearly RM1.15bil, down by 22.1% in quantity and 27.6% in value against 2021.
Sarawak held most of the overhang, with 33.8% share, followed by Johor (23.3%) and Penang (9.7%), according to the Napic report.
Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said PTP in SPU has emerged an alternative site for high-technology investments.
“If new investments were to go to Batu Kawan, they would have to compete with the established big players there for skilled labour.
“Universiti Teknologi Mara’s branches in Bertam and Permatang Pauh and the Industrial Training Institute in Kepala Batas would support PTP with skilled labour,” he said.
“Furthermore, the piling cost in SPU is much lower than in Batu Kawan, as works would have to be done on reclaimed land, which is why PTP and the surrounding industrial land in the neighbourhood is an attractive alternative,” he added.
The PTP is close to the up-and-coming Setia Fontaines, a 1,691 acres mega township that offers green and sustainable world-class development.
It is centrally located near North Seberang Perai and is linked to the island, Bukit Mertajam, Sungai Petani, Kulim, Seberang Jaya, Permatang Pauh, and Simpang Ampat.
“It is the right move to position SPU as an alternative site for industrial parks,” he said.
Wong said multinational corporations were still keen to invest in Penang as an alternative manufacturing site to China.
He added the electronics and electrical industry was a significant contributor to Malaysia’s economy, and it was the country’s largest export sector at RM593bil in 2022, accounting for 38% of total exports.
The industry also accounted for 78% of the country’s external trade surplus of RM255bil and continued to attract the highest level of investments (foreign and domestic), with a record-breaking investment of RM148bil in 2021, comprising 76% of the country’s total investment in the manufacturing sector.
According to Penang Chief Minister Chow Kon Yeow, the state recorded RM13.7bil in approved manufacturing investments in from January to December last year.
He said the investments involved 135 projects which would generate 15,752 new job opportunities in the state.
Chow added that Penang registered a staggering RM196.67bil in total approved manufacturing investments from 2008 to 2022.
Penang Freight Forwarders Association (PFFA) honorary secretary Ali Ahmad said the new Penang Technology Park should help boost the local logistic industry.
“As we understand, MNCs from the United States, China, and Europe will likely set up high-technology manufacturing plants there. These are popular destinations for our cargo,” Ali said.
About 70% of the cargo handled by PFFA members comes from the electronics manufacturing sector.
Meanwhile, the Penang Development Corp (PDC) is developing the infrastructure for some 800 acres of land in East Batu Kawan.
PDC director Datuk Seri Lee Kah Choon said the relevant authorities would carry out infrastructure development work in phases to cater to the rising demand for industrial land in the state.
“We have started work and the infrastructure development should be completed by 2028,” he said.
Lee said PDC would focus on developing the infrastructure of some 1,200 acres of industrial land in Byram Estate in Batu Kawan.
“The demand from MNCs from Europe, the United States, Taiwan and China for industrial land in Penang has been strong for the past three years.
“Since the Covid-19 pandemic, MNCs are looking for alternative investment destinations, as they don’t want to place all their investments in China.
“Should there be a lockdown in China, their business operations in other locations would still be able to continue doing business,” Lee added.
Lee added the PDC would not acquire more industrial land on the mainland.
“We currently have an adequate supply of industrial land to meet short and medium-term demand,” he said.
Source: The Star