Condo project also its first development in mainland Penang

New Bob Group Sdn Bhd, possibly the oldest real estate agency in Penang, has ventured into property development on the mainland side of the state with its first affordable housing scheme.

To differentiate it from other run-of-the-mill affordable housing projects, the RM70 mil River Tropics condo in Seberang Jaya wil incorporate green technology. It is one of the company’s five development projects in the state with a total gross development value (GDV) of RM229.5 mil.

The other four projects are six units of gated bungalows in Pulau Tikus (GDV: RM42 mil), 17 town villas in Pulau Tikus (RM59.5mil), renovation of its NB Tower in Butterworth (RM55 mil), and a budget hotel in Argyll Road (RM3 mil).

New Bob is the first real estate agency in the northern region. It was established in 1959 as Bob Agency. Then, the company catered primarily to the housing needs of the British armed forces and Royal Australian Air Force personnel.

The group has diversified and now has interests in property development, management and sales, hotels and car rental, and will mark its 57th year in the property sector.

Island homes not affordable

Its director Dr. Lee Ville recently shared the group’s aspiration for the New Year. He says  that while it will be a challenging year due to a host of issues afflicting the economy, he remains optimistic on moving into the mainland’s housing segment.

“Penang Island is becoming unaffordable,” he says, adding that the average house buyer has no choice but to accept that affordability lies on the mainland.

Unless buyers are willing to settle for 700 to 800 sq ft homes, the best option is to buy on the mainland, he notes.

Despite a long-held view that mainland Penang offers an inferior socio-economic standard, the perception is changing, especially among the younger generation, says Lee, who is a doctor.

He says the mainland is suitable for young families, and that good quality living is attainable as developers have sensed that the market has no choice but to evolve over there.

Hence, the move by New Bob into Seberang Jaya with the River Tropics project, he adds.

River Tropics is named after a river near the affordable condo project. It offers 140 standard and eight duplex units with green elements incorporated into the designs.

Situated next to Tesco Extra and in close proximity to the First Penang Bridge, this project is the company’s stepping stone to more affordable green homes.

Believed to be the first green condo project in Seberang Jaya, the indicative selling price begins at RM400,000.

The standard units measure from 1,346 to 1,483 sq ft and the duplex units from 2,543 to 4,113 sq ft.

The project is expected to be completed by 2018, which will see New Bob among the ranks of bigger developers making their mark on the mainland’s property sector.

It is reported that by 2030, Penang’s population will consist of 60% residing on the mainland and 40% on the island – signaling the transformation of the state’s property market.

While the island is shifting towards the upper-income segment, Seberang Prai will be paired with those in the middle – and lower middle-income categories.

Better infrastructure on mainland

However, if one analyses the infrastructure, it is better on the mainland now in terms of traffic dispersal, Lee points out.

Butterworth has an outer ring road whereas the island has none. And there is a better master planning of townships as development on the island has to contend with preserving heritage buildings, he adds.

However, Lee believes that developers with premium-priced units may struggle, given the slowdown in the economy and the property sector.

The economy has been hobbled by financial scandals, rising living costs, and a sharp depreciation of the ringgit.

Although the manufacturing and tourism sectors remain buoyant due to the weak ringgit, the drop in prices of agriculture and oil commodities is said to be hurting the economy.

Pent-up demand

Despite the negatives, Lee says there remains an enormous demand for affordable properties, and New Bob has positioned itself well to tap it.

In the 1997-98 economic crisis, the company was adversely affected by the downturn with huge exposure to borrowings, he says.

But since then, the company has built its reputation as a household name in real estate for Penang and has grown steadily. It’s recent move is towards niche and boutique forms of development.

Lee remains optimistic of the property market despite the company experiencing a drop in sales. The high loan rejection rate has not helped. Buyers who can afford to invest in more than one property are holding back as they “wait and see”, he says.

On a positive note, the slowdown is in a way good for the market as it will readjust itself to give a truer picture of the actual supply and demand situation, Lee says, adding speculation can be curbed.

Looking forward, he says the proposed RM27 bil Penang Transport Masterplan is good as it provides supporting infrastructure, which in turn, will boost house prices as well as bring better social amenities.

There is a push to improve public infrastructure given the worsening traffic congestion, but Lee does not see it as a necessity for the property market. Nevertheless, he says it is always good to have better connectivity.

Carving a niche in property development

NB Tropics Sdn Bhd, a subsidiary set up by New Bob Group Sdn. Bhd. in 1991 to drive its property development ventures, is slowly coming into its own as a niche developer despite the presence of bigger players.

Since 1991, NB Tropics has been constructing buildings and upgrading properties, says the group’s director Dr. Lee Ville.

Over the last two decades, the company has expanded its projects from small-scale ones to major developments of various types in the northern states, he says.

Lee wants to distinguish the company as a developer with huge emphasis on green technology and it seems to be paying off.

For its River Tropics condo project in Seberang Jaya, NB Tropics will provide a large recreational area, natural air ventilation, rainwater harvesting, solid waste management, low thermal heat through insulative paint and energy-saving electrical system.

This follows the Penang government’s push for green technology. State executive councillor in charge of housing, Jagdeep Singh Deo, recently spoke about expanding the different rating tools for green technology. At present there is the Green Building Index, which was drawn up by the Malaysian Institute of Arhitects.

He is also considering increasing the incentives to prompt more developers to emulate NB Tropics in greenery preservation and installations in housing projects.