The last four ‘sea-facing’ bungalows on Penang’s nostalgic strip in Gurney Drive are gone – sold for over RM20mil to Hong Kongers. While there are no known plans yet over the fate of the land, its yield may go up to over RM130mil in the future.
GEORGE TOWN: One of Malaysia’s most high-end neighbourhoods, Gurney Drive, has proven it is real estate gold after Hong Kong investors snapped up four bungalows in the area for over RM20mil.
The bungalows are the “last stretch” of old properties along Gurney Drive, which has been named in international publications as one of the best places to check out for culinary delights.
ALSO READ: Shuttering of iconic eateries leave customers glum
If all the stars align for these owners, real estate brokers say that the newly acquired assets can bring in a yield of at least RM130mil after about 10 years.
The investment involves a row of four two-storey houses facing a row of casuarina trees along Gurney Drive.
Real estate investors from abroad have been eyeing Gurney Drive for some time, buying up old landed properties at over RM1,000 per sq ft.
As a comparison, the average gross selling prices of new luxury high-rise residences in Kuala Lumpur ranged between RM750 per sq ft and RM960 per sq ft in the first half of 2021.
Another survey of high-rise residential properties in Klang Valley found that a two-bedroom unit in KLCC cost an average of RM1,079 per sq ft.
Covering a total area of a little over 2,700 sq m – or around 29,062 sq ft – the land the four houses sit on is almost as big as that of two Olympic-sized swimming pools.
“It’s all about the location. They (investors) are not put off by the development guidelines or local council regulations.
“The Gurney Drive area is where development is expected to be the most pronounced on the island in the future so they bought the houses,” said a real estate broker who asked not to be named.
Attempts to speak to the new Hong Kong owners have not been successful.
Featuring wooden walls on the top storey with brick-and-mortar ground floor structures, the four houses are surrounded by high-rise hotels and condominiums.
Real estate agent David Lim revealed that one of the vacant houses, which used to house Carnation Bak Kut Teh, is being offered for rent at RM14,000 a month.
When told about the Hong Kong investors, another property developer said it would be “a good buy” if the bungalows were within the commercial zone of a plot ratio of 1:5.
A plot ratio means the total allowable gross floor area that can be developed over the size of the land area.
If the plot ratio for the combined land of about 2,700 sq m is 1:5, a development with a total floor space of about 13,500 sq m is possible.
Going by the RM900 per sq ft median price quoted over the Internet for strata properties in Gurney Drive currently on sale, this will result in a potential gross development value of at least RM130mil from these four houses.
“As long as those old houses can be demolished, there can be many possibilities. You can have a mixed development. It can be a hotel, serviced apartment, offices ... many things,” said the developer.
For the record, the median house price last year was highest in Putrajaya at RM628,000, followed by Kuala Lumpur at RM490,000 and Selangor at RM410,000.
Penang is at seventh place with a median price of RM317,000, according to data from the National Property Information Centre.
The island has been captivating Hong Kong buyers in the past few years, with a number of celebrities, including superstars Jackie Chan, Andy Lau and Simon Yam said to own homes here.
