After years of meticulous planning, deal making and construction, Batu Kawan will dramatically change with major establishments opening their doors in the coming months. From IKEA and neighbouring commercial centre Vervea to the completion and launching of residential properties in Utropolis and Eco Horizon, Penang’s third satellite city, after Bayan Baru and Seberang Jaya, is set to blossom.
As excitement grows, developers and stakeholders are working tirelessly to ensure everything goes according to plan.
The Master Plan
The state’s next central business district is fast emerging in Batu Kawan, with heavy hitters in the development industry like Aspen Group, Paramount, PE Land and IKEA making waves this year. Also to keep in mind is Bandar Cassia – the small island in Seberang Perai where much excitement is found and many secrets are to unravel.
The state development arm, Penang Development Corporation (PDC), is the architect of the entire area and reveals that a high-tech medical hub, international schools, possible theme parks and spacious linear parks are also on the cards.
PDC’s Physical Planning and Land Management Division senior manager Aziz Bakar says just over 2,000 acres of the former backwater’s 6,300 acres is left to develop and mould. “We have recently been approached by several local and foreign investors from the medical tourism field. They are looking to build high-end, specialist hospitals here – a different concept to the current hospitals we have on the island. They are very specialised and focused on having the very latest medical equipment in specific fields, with equipment that can only be found in a handful of places in the world,” Aziz says.
He explains that the west coast of Bandar Cassia – currently open space – is being looked at for the development of a medical hub. “The federal government has also expressed interest in relocating their hospital in Nibong Tebal to this area. There is no space for them to expand where they are and they need space to upgrade their facilities.” Aziz hopes that plans for this project would be settled this year, and that construction on the new government hospital will begin in 2020.
With a bit of luck, a deal for a RM1.5bil cancer treatment and research centre will also be inked before the end of the year. “The investor is currently working with Universiti Sains Malaysia (USM) on ways to station their medical equipment here. If all these new hospitals materialise, Batu Kawan will become a medical hub not only for Penang, but for the Asean region,” he says.
For years, there has been talk about attracting a theme park operator to Batu Kawan. Most recently in March last year, PDC released a request for proposals (RFPs) for the third time for an over 100-acre theme park in the area.
“We have had an investor inquire about building a golf course here but for the time being, the management is moving past that idea. For the most recent RFP for a theme park, only one company submitted and they could not fulfil the terms and conditions so we declined. Theme parks are currently having a hard time attracting business but we still feel that a family-centred attraction is very important for the area. Having a place where people can go after they visit and do their shopping and so on will greatly complement other components in the township,” Aziz says.
Schools are also crucial for successful developments and PDC is currently in talks with two international school operators to establish in Bandar Cassia. “We also have government schools there – SK and SMK Batu Kawan as well as SJK(T) Batu Kawan. Additionally, a SJK(C) submitted their application to the state government for land at the end of last year. There is some urgency, and what with the budget already approved, construction will most likely begin early next year,” he adds.
PDC is also working at improving access to Bandar Cassia and developing its connections to the rest of Batu Kawan. A large trumpet interchange is planned between the existing interchanges at Tambun and the mouth of the Second Penang Bridge, to ease traffic flow.
Aside from that, a 100-acre linear park will take shape in the middle region just behind Design Village Outlet Mall, spanning the whole island. “This will be the main park for the entire township. We are expecting the company involved to submit its proposal soon and if it looks good, we can ink the deal with them by the middle of this year,” Aziz says.
PDC is also taking steps to house future residents who are expected to work there. PDC Housing Development Division project manager Radzuan Ahmad says Suria 2, the second phase of affordable housing in Batu Kawan, will be launched in either the third or fourth quarter this year.
“The first phase, Suria 1, has been completed and the keys were handed over in May last year. Suria 2 will be a replica of the first project with 520 units measuring 800, 900 and 1,000 sq ft along with five shop lots,” he says.
Additionally, PDC is opening up more bungalow sites at their Safra Of Dedaun housing project which already consists of 58 ready-made bungalows and 118 bungalow plots where buyers design their own homes. “Phase One was completed about six years ago and we are now launching Phase 2A in this guarded community, with 12 bungalow plots for sale. These plots start from 6,000 sq ft in size,” Radzuan adds.
PDC Housing Development Division’s Sales and Marketing Section senior manager Ang Seng Jin says sales opened early this year and the response, to date, has been encouraging.
A Different Kind of Mall
Walking into the Design Village (DV) Outlet Mall, which opened in late 2016, one will note the wide, open-air walkways that meander along the bright stores and five linear parks, with tropical plants intertwining the corridors and common areas.
Over the last two years, DV has strengthened its position, offering quality products at great prices. DV chief operating officer Andy Song says the 24-acre mall welcomes a steady 1.5 million visitors a year to over 170 shops housed in its compound. “Occupancy-wise, we are at 83% for the main mall (which consists of 150 lots). We just celebrated our second anniversary and retail sales for our tenants is officially up by 11% over the last year,” Song adds.
Footfall has been consistent in DV, which opened its extension block with 26 lots in August 2017, while spending per capita has multiplied at an encouraging rate. “We get about 1.2 million visitors for the first 10 months of the year. The people who come here are fully focused on shopping and spending per person has increased by 77%,” Song says.
Operating in Batu Kawan comes with its own unique challenges. The township, being new, is still improving on its accessibility. “If you look at the surrounding areas, no doubt we have (access to) the factories on the highway. However, factory workers are very regimented and are not so flexible as to just drop in for shopping. Additionally, the residential catchment nearby at the moment is low,” Song explains, adding that this also affected employment.
Weekends – meaning Fridays to Sundays – see encouraging numbers of visitors but, as with most malls, footfall on weekdays is in need of improvement.
Logistics costs also need to be studied, with the mall’s tenants factoring in high costs for day-to-day deliveries. “Distance plays a big part when you are isolated and you haven’t reached a certain volume. Operational cost for retailers is a problem for us because that impacts their viability of operating in an outlet like ours, where they are already discounting their products up to 80%,” he says. PE Land has taken steps to remedy this, such as reviewing the mall’s operating hours (now 11am to 10pm daily), to help tenants keep costs as low as possible.
Song is positive about the future and hopes that tourism in Penang will be rebranded to promote more than its unique hawker fare and heritage. Taking Bangkok as an example, he states that the state has the potential to tap into the over 630 million people residing in Asean countries. “Bangkok has incredible retail offerings from luxury goods down to mass products; they are not short on historical allure or religious and cultural traits; and the food alone attracts people from all over. Here in Penang, the experience is great but it’s a bit narrow and George Town-centred,” he says.
With the first phase of the mall completed, PE Land is looking at the second phase which encompasses a condominium of at least 300 units. “We received planning approval at the end of last year but we do not intend to launch it any time soon as we are still studying the market. It will probably be a three-year plan,” he explains, adding that a hotel is set to follow.
March 14 is a date many Penangites and folks living in the northern region are excited about – it is the day IKEA opens its new branch in Batu Kawan.
With 49 showrooms spread across approximately 43,677 sq m and over 8,000 home furnishings for sale, new and expecting home owners as well as those who are looking to improve their living spaces are inundated with choice.
IKEA Batu Kawan store manager A. Pathmalingam says Batu Kawan was chosen as the location for the fourth IKEA store in the country primarily due to the space and location. “I just don’t think Penang Island has the land for an IKEA store. Some people are very sceptical but we are looking at the long-term – this area is going to be so different five years down the road so why not start and build the brand here now?” he says, adding that IKEA has also joined forces with DV to work out joint marketing strategies for the area.
Pathmalingam says that structurally, IKEA Batu Kawan is similar to its sister stores in the country. One unique feature, however, is the IKEA Bakery. “IKEA Batu Kawan is the only store in the country to have the bakery in operation from Day One. We want to offer the complete shopping experience so why not just start the bakery now instead of planning for later?” Pathmalingam says, explaining that the IKEA Bakery concept is relatively new to the brand.
IKEA Batu Kawan also has an IKEA Restaurant that seats 756 patrons, an IKEA Bistro, and its famous Swedish Food Market. The store is also equipped with Småland, an enclosed play area for children; 12 express self-checkout counters; delivery and sewing options; as well as store sustainability features that include photovoltaic solar panels, rainwater capture, energy recovery equipment, eco-friendly refrigerants and parking bays for eco-friendly vehicles among its 1,950 parking spaces.
IKEA Batu Kawan breaks ground with 60% of its 300-strong workforce signed up for non-standard contractual working hours. Part-time work (IKEA prefers calling its employees “co-workers”) is relatively new in Penang and in the country – something Pathmalingam says IKEA Batu Kawan is trying to change.
“We are looking very much into productivity. For example, some days are slow and on other days, every checkout counter is packed with people. So, we wouldn’t need every one of our employees working 42.5 hours a week. We want to be able to schedule productive hours depending on what customers need,” he says.
This also opens the door for workers who cannot commit to the usual 9-to-5 workday. “I love hiring retirees. I hired one 63-year-old man for the dining section in IKEA Damansara and he has now been with us for 11 years! Housewives too, who need to be home in the mornings can come work for us in the afternoons or on weekends, depending on their schedule. As many as 90% of IKEA Batu Kawan’s workers are local Penangites,” he says.
Pathmalingam says customers are always unique to different regions, and he is looking forward to seeing what Penang consumers are like. “Some would have already been to an IKEA store in the country while for others, it may be the first time. Although I’ve been interacting with the people of Penang for a while now, I’m looking forward to meeting them as customers – I want to see what kind of exciting and different questions come from them,” he says.
Developing with a Vision
Aspen Group, which inked a partnership with IKEA Southeast Asia in September 2014, is equally as busy in the run-up to the opening of the new IKEA store.
Vervea, slated under the first development phase of Aspen Vision City (AVC) and one of the largest commercial developments in the state, is set to open on the same day. Located just a stone’s throw from the IKEA complex, Vervea covers over two million sq ft of office and retail space in 441 three and four-storey units located on a 35-acre site.
Aspen Group president and group CEO Datuk M. Murly says a central hub for local retailers and players is crucial to the success of any satellite city. “Vervea is large enough to house multiple layers of retailers and will bring commercial activity and local content to the area. It also has sufficient carparks for visitors – Batu Kawan is the only place in the state where you can bring in a few thousand cars at one time without having traffic issues; the roads are wide and very well-designed and traffic is easily dispersed onto the North-South Highway,” Murly says.
The Vervea Trade and Exhibition Centre (VTEC) in the heart of the new commercial site has also been completed, along with a 100-room boutique hotel. Also in AVC’s first phase of development is the 25-acre Central Island Park, which opened to the public in October last year and has become the most recent public attraction in Batu Kawan.
AVC’s second phase is also underway with Vertu Resort, touted to be Seberang Perai’s first Green Building Index (GBI)-rated resort-inspired condominium; a Columbia Asia medical hub; and the Vittoria Financial Centre on the cards.
Aspen Group is also aware of the demand for elegant homes for entry-level workers and below, especially those who exceed the criteria for government affordable housing but cannot yet afford higher-end accommodations.
An influx of young professionals is also expected when commercial and industrial activities in the area pick up speed. The developer is therefore amending its original AVC plans to introduce the executive apartment concept in Batu Kawan this month targeted at those making an average monthly salary of RM2,500 and below.
“We have to offer reasonable prices and we are working very hard to keep these units within RM250,000 to RM350,000. At these prices, the repayment for a bank loan is about equal to the rental rate going around now, so this is a huge opportunity for young people to afford these units,” Murly says.
He adds that Aspen Group’s biggest challenge for the project is keeping prices low, with several factors including land price, GBI ratings and the pneumatic waste collection policy for the area as major cost considerations.
“The 1,500 executive apartments will be about 700 to 850 sq ft each with a layout of 2+1 and 3 rooms. We are also looking into shared working spaces and social kitchens, which allow residents to host events or just get a few friends or kids over to cook. A social kitchen comes with a complete set of industrial kitchen equipment including dining spaces, and allows young families to host cooking gatherings and social events. So, even though these young professionals purchase a smaller living space, they will not have to compromise on their lifestyle,” he says.
Also planned under AVC’s second phase is an ambitious IKEA shopping mall with one million sq ft of retail space to let and the Vittoria Financial Centre which aims to consolidate Seberang Perai’s financial services in one single area. “For banks, internet accessibility and fibre infrastructure are very important, so we are trying to bring the financial industries to a single location that comes with complete infrastructure – power, GBI-rated buildings, cloud (computing) services and so on,” Murly says.
Phase Three of AVC has another long list of developments, among them designer bungalows, semi-detached and terrace units, and a mixed development project that includes office and retail spaces, two residential tower blocks and an urban plaza. This development also encompasses the 30-storey Aloft Hotel, with a memorandum of understanding signed between Aspen Group, IKEA Southeast Asia and Marriott International last November, with a completion date set for the first quarter of 2023.
A Learning Community
Located just a stone’s throw away from both DV and Aspen Vision City is KDU Penang University College’s new campus, set to open its doors in September this year. The environmentally sound tertiary education establishment has been purpose-built and will be the centre of the state’s first university metropolis.
KDU Penang University College vice chancellor Prof. Dr Chong Beng Keok says construction on the 10-acre campus is 99% complete, with merely the finishing touches left to be done. “Operations will commence in September to prepare for our first intake of students in January 2020. Phase one of the campus (the current phase) will accommodate 3,000 students while phase two, which will be built later when the need arises, can accommodate another 2,000 students.
“The campus will be a green campus, modern and safe, with facilities that make learning convenient, comfortable and enjoyable. There are also informal activity areas designed to promote active discussions and learning beyond the classroom,” she says.
With academic programmes ranging from pre-university to master’s degree levels, KDU’s Batu Kawan campus offers courses in hospitality and tourism; information systems; business; and mass communication, to name but a few.
The close proximity to the Batu Kawan Industrial Park will encourage synergy with strong industry players through internships and other professional activities.
“We also want to position KDU Penang University College as an institution known for its accounting, banking and finance programmes. Our programmes are work-and-community integrated, with strong focus on skills development.
KDU actively nurtures the spirit of entrepreneurship and our aim is to have our graduates job-ready,” Chong says, adding that Industry 4.0 skills would also be an area of emphasis in the new campus.
Anchored by the university college campus, Paramount Corp, KDU’s parent company, is developing Utropolis Batu Kawan – a self-contained integrated development spanning 44.3 acres containing residences, office and retail spaces, as well as an upcoming hotel.
The close proximity to the Batu Kawan Industrial Park will also encourage synergy with strong industry players through internships and other professional activities. “KDU’s academic staff would benefit as well, as they will be able to collaborate with these companies located at the industrial park for joint research projects, benefiting the economy and the community as a whole,” she adds.
Chong explains that the recent share purchase agreement between Paramount and the University of Wollongong (UOW) in November last year has the potential to enhance Malaysia’s value as a tertiary education destination for both Malaysians and foreign students. “The agreement involves UOW taking up a 65% stake in the business and operations of KDU University College and KDU Penang University College, and a 70% stake of that in KDU College.
“The partnership is still awaiting approval from the Ministry of Education, but we are optimistic because this is a venture with a ranked Australian public university. Should the green light be given, KDU will leverage on UOW’s network as a global multi-campus university and its undergraduate and postgraduate programmes,” she says, adding that the partnership could see UOW helping Penang grow as an education tourism destination.
Source: Penang Monthly