- Penang’s property prices have seen significant appreciation, particularly in Georgetown, given the scarcity of prime land. Prices are reported to have risen steeply by more than 500% on the island and 700% in Seberang Prai.

- Land prices at Georgetown have already reached RM650psf-RM700psf, with the recent transacted price of RM700psf (for a land adjoining KOMTAR) in 2012. Interestingly, Penang’s residential property prices have been rising faster than its land value. Property prices have surged beyond RM1,000psf as evidenced by E&O’s project at Andaman Block 2. The project had set a new benchmark within Georgetown, with an average selling price of RM1,300psf.

- Following the announcement of the second link project, land prices at Batu Maung, located on the island had risen to RM250psf-RM300psf from RM50psf-RM60psf. As for Seberang Prai, land prices are hovering at RM50psf-RM60psf, compared to the RM8psf-RM9psf.

- Furthermore, the recent announcement of IKEA’s entry into mainland Penang at Batu Kawan, in Seberang Perai Selatan, would further boost Penang’s attractiveness.

- Being the second IKEA outlet in Malaysia, the ground work is expected to commence by endyear or early 2015 and to be developed within five years (i.e. by 2020). This is undertaken by Aspen-Ikano, a joint venture between Aspen Vision Land Sdn Bhd and Ikano.

- Aspen-Ikano has bought 245 acres of land in Batu Kawan for RM484mil to jointly develop an integrated shopping mall (75 acres), anchored by IKEA, with a mixed development of offices and residences (170 acres). The entire development is expected to be completed in 10 years.

- Underlined by Batu Kawan’s new well-planned traffic infrastructure and proximity to the Second Penang Bridge, several upcoming development projects in Batu Kawan include an upmarket outlet shopping mall, international-class hotel, branch campus of Britain’s University of Hull and KDU University College.

- Another positive newsflow is the reported opening of the 24-km long Second Penang Bridge – connecting Batu Maung on Penang Island and Batu Kawan in the southern Seberang Prai – in February.

- All in all, our top large market capitalisation BUYs are Mah Sing (FV: RM3.80/share) and IJM Land (RM3.86/share), while our small-to mid-size market capitalisation pick is Eastern and Oriental (FV: RM3.00/share).

Source: AmeSecurities