The Penang property market remained active despite the ongoing Covid-19 pandemic and weak consumer sentiment, coupled with the poor global economic outlook.

The residential sub-sector continued to dominate the property market with an increasing number of affordable housing and mixed-use development projects, according to Knight Frank Malaysia's latest publication, the Real Estate Highlights 1st half of 2021 (1H2021).

The firm said the residential sub-sector is expected to remain resilient supported by initiatives under the various stimulus packages and the National/State Home Ownership.

Campaigns which have been extended till end 2021 and June 2022 respectively.

Penang, which was nominated by Travel Awaits as the third best island in the world and first in Asia to retire in 2021, saw the government launch Penang Green Agenda (PGA) 2030 in February, Digital Transformation Masterplan in March, and Penang Tourism Master Plan 2021 to 2030 in May.

State government-linked company Penang Infrastructure Corp Sdn Bhd (PICSB) also entered into a joint-venture (JV) with SRS Consortium Sdn Bhd (30:70 share) to reclaim Island A of the Penang South Island project.

The reclamation of Island A featuring the environmental, social, and corporate governance (ESG) concepts will be carried out in phases.

Under the first phase, 486 hectares (ha) out of the total 931ha will be reclaimed and with expected completion by 2027. Some 285.7ha of reclaimed land in Island A will be designated for a Green Tech Park, targeted at high-value E&E players.

Meanwhile, under Phase 1 of the 53.5ha Gurney Wharf project, work to develop a public park with facilities and amenities for the disabled, a skate park, a promenade, and a children's playground, amongst others is expected to commence in September and be completed by the first half of next year.

In addition, the Penang Medical and Digital Technology Hub will come up in the future in Batu Kawan. Penang Development Corporation (PDC) signed a memorandum of understanding (MoU) in January with iHeal Health Sdn Bhd to develop the hub on 120.4ha in the maturing township of Bandar Cassia.

According to the Knight Frank 1H2021 report, several property projects were completed during the review period starting with Straits Residences by Kerjaya Prospek Property Sdn Bhd. The 29-storey building at Bandar Seri Tanjong Pinang comprises 246 units with sizes ranging from 861 sq ft to 1,356 sq ft. Selling prices start from RM1,013 per sq ft (psf) to RM1,399 psf.

Aspen Group completed Vertu Resort in Aspen Vision City, Batu Kawan. The project consists of five blocks of 20 to 36-storey condominiums with a total of 1,246 units sized from 740 sq ft to 1,290 sq ft and selling from RM402,000 to RM1.29 million per unit.

IJM Perennial Development Sdn Bhd on the other hand soft-launched Mezzo@The Light City at The Light City. The 34-storey building will offer 456 units ranging from 1,033 sq ft to 1,367 sq ft. The selling price for this newly launched project starts from RM900,000 per unit and construction is expected to be completed by 2025.

On the supply of office space, as of 1Q2021, purpose-built office (privately owned) stood at 7.1 million sq ft on Penang Island and 1.6 million sq ft on the mainland with average occupancy rates of circa 85 per cent (1Q2020: 81 per cent) and 58 per cent (1Q2020: 59 per cent) respectively.

There was no new completed office project during the review period (Source: NAPIC).

"With no impending new office supply during the review period, the office segment is expected to maintain its occupancy and rental level," said Knight Frank in the report.

The occupancy rates for monitored office buildings in George Town remained stable, averaging from 75 per cent to 96 per cent.

For selected better-grade office buildings located outside the George Town area, namely Menara IJM Land, Suntech @ Penang Cybercity, One Precinct, and GBS@Mayang, the average occupancies are in the region of 82 per cent to 90 per cent, the report showed.

In George Town, asking rentals of selected office buildings under review held steady ranging from RM2.80 psf to RM4.75 psf per month.

For shopping malls, the overall occupancy rate was recorded at 73.3 per cent in 1Q2021 (1Q2020: 74.1 per cent) showing only a slight drop due to disruptions arising from the pandemic.

As of 1Q2021, the 109 existing shopping malls in Penang offer a total retail space of 20.2 million sq ft with two complexes (NLA: 1.04 million sq ft) under planned supply (Source: NAPIC).

Occupancy rates for prime shopping malls on the Island have generally remained stable within the range of 82 per cent to 97 per cent as at 1Q2021.

The monthly rental rates for ground-floor retail lots in prime shopping malls have generally remained stable and range from RM7.00 per sq ft to as high as RM50.00 per sq ft, depending on the mall, location, and size of the units amongst other factors (Source: NAPIC)

The Weld Heritage Square, a notable upcoming commercial property by Adat Makmur Sdn Bhd and Koperasi Gabungan Negeri Pulau Pinang, will be developed along Lebuhraya Merdeka, off Pengkalan Weld in George Town. The strata-titled project will consist of 36 units of three and four-storey shop units with built-up areas ranging from 3,113 sq ft to 5,042 sq ft, priced from RM1.6 million onwards.

The project is targeted to be completed by the end of 2021 with a certificate of completion and compliance expected by 1H2022.