Seri Tanjung Pinang is an oasis of luxury on Malaysia’s west coast. The development on Penang island is still in its early stages, but already offers a charming blend of landscaped parks, boulevards, seafront esplanades and a range of high-end homes. It is topped off with a sprinkling of commercial and retail precincts.
The 240-acre first phase of Seri Tanjung Pinang – which, once fully completed in 2012, will even feature a marina – includes a variety of properties that will be released onto the market in groups: Seafront villas are the flavor of the summer while condominiums are set for a big launch in the fourth quarter of 2008.
In each case, E&O Property Development Berhad (E&O) is looking to set new standards for luxury real estate in Malaysia. The company has built up a strong following in its home market and in Singapore. Now E&O wants to build on emerging overseas interest and become a global player.
“In the last 10 years, interest in Malaysian property has taken off quite well,” said K.C. Chong, E&O’s marketing and sales director. “We have actually sold almost everything we have launched principally because we own waterfront developments right next to the city limits which are very attractive.
“Seri Tanjung Pinang has been particularly attractive to foreigners wanting to settle in this part of Asia.”
A sense of history
The company’s goal is fitting given the lineage of the E&O brand. The name first came to light in the 1880s as the Eastern & Oriental Hotel in Penang. This establishment was founded by the Sarkies brothers, a pair of Armenian entrepreneurs responsible for a string of luxury hotels throughout Southeast Asia, including the Raffles Hotel in Singapore.
As an outpost of the East India Company, Penang was the destination for countless steamships traveling to Asia. Consequently the E&O Hotel played host to the great and the good of Europe and America. The likes of Noel Coward, Rudyard Kipling and Douglas Fairbanks all enjoyed its hospitality at one time or another.
In modern times, both the hotel and the E&O brand have been rejuvenated and reinvented as a byword for luxury in the region.
Since 2003, the company has become very active the high-end property market. In addition to Seri Tanjung Pinang, E&O is also currently promoting the Dua Residency, a luxury condominium development in central Kuala Lumpur. The property occupies a 4.5-acre site a stone’s throw from the renowned KLCC twin towers and some of the city’s major shopping and entertainment attractions.
E&O has a host of new projects in the pipeline, including more high-end properties in Kuala Lumpur and Penang. According to Chong, the company is also eyeing a slice of the Iskandar Malaysia project, a government-backed initiative to develop the Johor region in the south of country, not far from Singapore.
While members of the expatriate community remain valued customers as they did when the E&O Hotel was in its prime, the company has relied more on growing Asian wealth as the bedrock of its recent success. With this in mind, China is viewed as an increasingly attractive target market.
“China is at a stage where it is looking at outbound investment,” said Chong. “We have done some studies that show the Chinese people want to buy abroad. We see some of them becoming second home owners, owning a property to just spend time there. Others will invest for capital appreciation.”
One of the major attractions is price. Top-grade condominiums in Singapore fetch at least US$1,800 per square foot while the top prices in Kuala Lumpur are around US$600 per square foot, Chong said. Hong Kong prices can be five times those in the Malaysian capital.
Much of Penang’s competition for beachfront property in Southeast Asia comes from the likes of Bali and the Thai island of Phuket. According to Chong, a villa in Phuket costs anything between US$1 and US$3 million. A 5,000-square-foot detached house in Penang goes for just under US$750,000.
While other countries in the region impose ownership restrictions on foreigners, which means property can only be purchased through third-party agents, the Malaysian government has done much to open up the real estate investment process and make it stable.
In addition to simplifying the work permit system, the government has introduced a “second home” program under which foreigners who meet certain criteria can apply for a special license to remain in the country for periods of 10 years at a time.
“The only condition is you have to deposit US$92,000 in a Malaysian bank but after the first year you can take out 80% of this money and use it to buy a property,” explained Chong. “It is now very easy for foreigners to live in Malaysia and get access to local financing to purchase homes. This is attracting quite a lot of people.”
Penang has become a well-established destination for Asian travelers from Korea and Japan. There is also increasing interest from Hong Kong, prompting airlines to increase the number of daily flights between the two territories.
With logistical proximity comes a lifestyle of convenience that is a particular draw for retirees as well as a second-home owners. Residents can enjoy the best of Malaysia’s climate, food and culture and also rely on solid local infrastructure. The government has sunk a considerable amount of money into the education system and health services.
“The whole living environment is very easy and the already large expat community is growing by the day,” said Chong. “People are coming to Malaysia in increasing numbers.”