Skyrocketing shophouses

		Saturday, Mar 31, 2012 The Star/Asia News Network
By Johnni Wong The cost of buying a pre-World War II shophouse in George Town, Penang, has reached RM2,000 (S$819.5) per square foot equivalent to the price of the poshest Kuala Lumpur City Centre (KLCC) condominium units. Click on thumbnail to view An entrepreneur, who declined to be identified, has just paid RM4 million for a 2,000sq ft shophouse along Lebuh Pantai (Beach Street) in order to continue an existing business located on the premises which she had been renting. Before 2008 - the year, George Town was jointly listed with Malacca as Unesco World Heritage Sites - pre-war shophouses in Penang were generally going for about RM200,000-RM800,000 depending on size and location. Previously, an unrestored shophouse of 10ft by 36ft at Lorong Chulia only cost RM150,000 in 2009 but the asking price has since jumped to over RM300,000 of late. Now, even the asking price of even the smallest shophouse that spans only 11ft by 30ft at Lorong Toh Aka is already RM600,000. Nearby, at Lorong Carnarvon, one unit of 17ft by 100ft has been sold for RM1.2 million while Lebuh Amernian shophouses can fetch RM3 million each. Heritage value Contrary to popular notion that foreigners and investors from Kuala Lumpur are pushing up prices of Penang heritage property, recent transactions show that Penang investors are the ones who are buying in a substantial way. This is particularly true among those who have lived abroad and recognise the heritage value. According to informed sources, one businessman from Bukit Mertajam recently snapped up RM20 million worth of pre-war property including shophouses in one day. Even derelict property such as the defunct Nam Wah Hotel & Bar, located at a prime location on Lebuh Chulia, was sold for RM7 million last year. The property comprises double-shophouse units with a land area of 14,000sq ft. Such shophouse properties are often turned into "heritage" hotels, charging an average of RM300-RM400 per room per night. High Court Case One factor that contributed to the current high prices for pre-war shophouses in George Town can be traced to an incident at the High Court in Penang on Sept 29 in 2010. On that day, a property auction by CIMB Bank attracted an unusually large crowd of over 70 people. The highlight of the sale was for an unrestored shophouse of 20ft by 125ft located on Armenian Street. There were only five actual bidders including Gooi. The reserved price was RM450,000 and furious bidding pushed the price up to an astonishing RM1.1 million, setting a new benchmark in Penang. The eventual buyer was a veteran real estate consultant. And that property is now reputed to be worth at least RM2.6 million, as it is, without any restoration. Observes Gooi, "Penang heritage houses and their stratgeic location means a unique combination. The value of pre-war shophouses still haven't been fully realised. "One thing for sure, prices will continue to go up," predicts Gooi, who is still be on the prowl for such "heritage" property. Think City There have been efforts by the local authorities and Federal Government-backed bodies like Think City to help enhance the heritage value of these old buildings. These organisations aim to engage stakeholders to improve the environment by maintaining the right architectural features as well as improve cleanliness and the drainage system, encourage more greenery, build pedestrian walkways and offer tourism attractions. No fun living in a shophouse While new buyers of Penang's pre-war shophouses wax lyrical over the romantic notion of restoring and staying in a "heritage" home, those who grew up in such houses, don't fancy living in one again. Tune Hotels strategic developments director Anwar Jumabhoy from the well-known Indian Muslim Jumabhoy family in Penang, recalls less than romantic memories of living in an old shophouse. "Yes, I do remember living in Jalan Greenhall, Penang, just off Lebuh Light," says Anwar, who is in his 50s. He is bemused that new buyers were willing to pay so much money to restore such shophouses and even want to live in them. "In those days, we were one of the few houses with a toilet inside and I used to watch in amazement at the 'night soil' trucks that used to come in the morning, and kids - without toilets - had to do their 'business' in the street. "My parents' office was downstairs and we lived upstairs and learnt how to be well-behaved kids - you had to, as the floor was wooden, so too much running around meant a lot of noise for those in the office." To the jetsetting corporate executive, a terraced house in those days meant, no windows except for the master bedroom. And the courtyard or air well was where the toilets and kitchen were located - at the back of the house. For a young child, going to the toilet at night was a scary experience especially through dimly-lit and long corridors. "Now, would I consider living there again," reply Anwar, "not really, wooden floors, rickety stairs and a very, 'nice' attic. With options available today for modern comfort, the nostalgic experience might be nice for a couple of days, no more. For a more permanent home or hotel accommodation, I would much rather have a room with lots of windows and a view." Lebuh Kimberley A Chinese owner of a new double-storey, linked-house in the upscale neighbourhood of Seri Tanjung Pinang, who declines to be named, says she doesn't ever want to go back living in an old shophouse. She grew up on Lebuh Kimberley. "Why would I ever want to live in such a home again? There's not much privacy especially when you have a big family," says the mother of a teenage girl. While there are those who don't have fond memories of living in rickety, old shophouses, a new generation of owners can't wait to occupy their expensively restored heritage properties.