Over the recent decade, Penang has quickly found favour with foreign investors, many of which are Singaporeans. And many have invested in vacation homes and condominium units to earn rents on.
As the prices of Singapore’s pre-war era shophouses skyrocket, many are turning to snapping similar properties in Penang, Malaysia. In the World Heritage Site of George Town, foreign buyers have been buying up pre-war shophouse units to renovate and refurbish and then renting them out, at times up to 5 times the previous rental rates. Just slightly over half a decade ago, rental rates were about RM$1,300. Now, monthly rents can easily come up to RM$10,000 – that is about 8 times higher than in 2010.
In fact, so many Singaporeans have bought up these shophouses along a street near Komtar, that the place has been nicknamed “Little Singapore”. Some locals have expressed their concerns about the commercialism of George Town and that some local businesses or residents may be chased out of the area by rising rents. Most Penang property owners charge around RM$4,000 for monthly rents, less than half of what foreign property owners are asking for. Some local NGOs are lobbying for rent control and some traditional organisations such as the Cheah Kongsi who owns about 100 shophouse units and have kept rental prices between RM$1,500 and RM$2,700 to allow the city’s British Straits Settlement heritage to live on.
But market analysts are also aware of the high cost of conservation for these pre-war properties and foreign property buyers such as World Class Land are able and willing to put in the monies to keep the integrity of these historic properties.