Monday November 10, 2003
The fast growing Upper Penang Road precinctBy DAVID TAN in Penang
THE precinct popularly referred to as Upper Penang Road (UPR) has over the past seven years emerged from the doldrums to become a fast-growing commercial precinct on the island.
UPR, stretching from the Eastern and Oriental Hotel in Farquhar Street and The Mansion in Jalan Sultan Ahmad Shah to Veenai Cinema (formerly Odeon), has attracted investments from large corporations and well known local entrepreneurs since 1996.
These large corporations include MWE Holdings Bhd , Eastern & Oriental Bhd , Cahaya Utara Sdn Bhd, and Oriental Holdings Bhd .
The Eastern & Oriental Hotel
Among the earliest corporations to invest in the area was MWE.
MWE Properties Sdn Bhd manager Lau Eng Sim told StarBiz that the group had spent RM50mil on the 25-storey MWE Plaza, equipped with fibre optic cables.
“The building is the group's corporate headquarters. Our anchor tenant is Maybank which occupies an office space measuring 32,000sq ft on the ground floor and four floors of the plaza,” he said.
According to Lau, the plaza, with 16 floors of office buildings and seven storeys of car park, is 98% occupied.
Eastern & Oriental Hotel general manager Adrian Brown said the hotel, which had been in existence since 1885 in the area, closed for renovation in 1996.
“The Eastern & Oriental group invested RM80mil in refurbishment works, and the hotel reopened for business in April 2001,” he added.
Cititel Penang chief operating officer Datuk Eric Lim said Cahaya Utara, Cititel's owner, had invested some RM78mil to set up the hotel, which opened its doors in 1997.
“Since opening, the group has further invested RM4mil in upgrading its rooms and the public areas,” he said.
Lim said the location and development of Cititel was decided upon after a careful study of its future potential and the surrounding vicinity.
“Cahaya was bold enough to proceed with the development in 1995, after taking into consideration then that there was no new hotel development over the last five years in the city centre,” he added.
According to Lim, the hotel has been enjoying an annual occupancy rate of between 68% and 75% for the past five years.
“About 70% of the hotel guests come from the corporate sector, while the remaining comes from the leisure market in the region,” he said.
Oriental Holdings injected RM37mil to construct the new wing of City Bayview in 1997.
“The new wing, which was ready in early 1999, added another 230 rooms, increasing the total number to 320. In the old wing, some of the 150 rooms were converted into facilities for the staff and into offices,” its general manager Derrick Tan said.
He said the group was adding in three presidential suites on the 16th floor.
“The first such suite with eight bedrooms will be ready for operation next year,” Tan said.
He declined to disclose the amount of investment in the presidential suites.
In 2001, the group invested about RM2mil in the renovation of its revolving restaurant, the only one in Penang, and its fun pub, according to Tan.
“For the past two years, we have been enjoying a monthly occupancy rate of between 75% and 85%,” he said.
Tan said City Bayview Hotel Penang was the flagship hotel of the group, as it was the late Tan Sri Loh Boon Siew's first hotel.
On top of large corporations, renowned local entrepreneurs such as Datuk Nazir Ariff have also injected investments into the area.
In 1997, Nazir spent RM3mil restoring The Mansion, previously belonging to the late Leong Yin Khean.
“I restored The Mansion to complement the state government's objective of transforming UPR into a precinct for locals and tourists to dine and wine. The idea is to turn the area like a Bangsar or Bintang Walk, except that you do it with old buildings,” he said.
Nazir said the bottom half of the building was being leased to a food and beverage operator, which had invested RM1mil in renovation.
According to Khoo Salma Nasution, a renowned local historian, UPR served as a residential area for Europeans and Eurasians in the early 19th century.
She said it then gradually evolved into a commercial zone in the 1920s and 1930s.
Besides the Eastern & Oriental Hotel, hotels such as the International Hotel and Elysee Hotel were also located in the area.
“There were also food and beverage outlets and cabarets such as the Swiss Café, City Lights Cabaret, Royal Theatre (formerly Odeon), and Queens Cinema (formerly Cathay). Then there were motor shops such as Wearne Brothers Motors, Georgetown Motors, and Lowe Motors,” she said.
According to Henry Butcher Penang senior vice-president Teoh Poh Huat, UPR has been successful in attracting investments because of the heritage buildings in Farquhar Street and Penang Road, which have not been knocked down to pave way for development.
“These heritage buildings instead are adapted for reuse. Old buildings have a life of their own which serves to attract people like magnets,” he said.
“Besides The Mansion, another landmark building which has been successfully adapted for reuse is the Garage, which was used in the 1920s and 1930s to showcase and service British Leyland vehicles like the Austin, the Morris and the Jaguar,” he added.
Teoh said the current rental value of offices in UPR started from RM1.30 psf onwards to about RM2.20, while for food and beverage outlets, the rental started from RM3 onwards.
“Landlords in the UPR zone expect rental to increase in the near future, as the area is a rapidly growing into a commercial zone,” he added.
According to Dave Chin, the proprietor of Soho Freehouse, one of the pioneering food and beverage operators in the precinct, UPR draws its strength from accessibility for both tourists and local patrons.
“Most of the food and beverage outlets in UPR attract a lot of walk-in customers as they are located in front of the main road.
“Furthermore, there are ample designated parking bays and lots in the area,” he added.