Many years ago, someone told me that the pre-war houses were being snapped up by some investors who are turning them into commercial concerns. The price then was mentioned as RM200,000 as these shophouses require huge investments to make them safe, usable and perhaps a viable commercial concern. Just some time back, some articles pointed out that the rental for these pre-war homes have risen many folds. Some quoted numbers included RM4,000 rental being up 300% to RM12,000. Many small businesses were forced to move out so that businesses with higher profitability can move in and thrive. I think this is very true even till today, just that it might be even more expensive!
According to an article in The Edge Property, there is now one 2-storey pre-war shophouse which is being refurnished currently. The current owner is spending effort and cost in restoring some of its more rundown parts. The price tag for this unit? A cool RM7 million. Before everyone say, ‘crazy,’ let’s get to know the following first. This building is in Kimberley Street, a famous place for hawker food. It’s as famous as Penang’s delicious hawker food can be. This house has three courtyards as opposed to one. One main reason, it is 20ft wide and 200ft long. This is nearly three times the usual length of a landed property being offered in the market today. The ceiling height is exceptionally high, at 16 ft. The total land area of the property is 3,860 sq ft, with a built-up space of 6,500 sq ft.
The owner said that there are only 8 units of such unique characteristics despite the fact that there are 4,000 shophouses in Georgetown. The price of RM7 million would be for the house after the refurnishment work. They include the replacement of its floorboards with Balau wood flooring, roof tiles, plumbing as well as electrical wiring. The most costly restoration was for the decorative ceramic tiles on the facade which were pieced together by artisans from Xiamen, China. The property was purchased in 2011 for RM2 million which was already a premium of 25 percent versus the value then. The reason to sell is because the owner would like to move on to restoration projects. He said that he is looking for a buyer who would appreciate a property like this. In fact perhaps it can be used as a vacation home as well since it’s within walking distance to many tourist attractions.
I personally think there is no such thing as the right value for such a property. Even using it as a vacation home is not the best excuse except if the new owner is someone who is exceptionally rich and happen to be a Penangite or someone who must have a cosy place in a UNESCO Heritage city site. Seriously, there are not many businesses that can be run profitably with a RM7 million price tag. Do note that everything within the property is likely to be precious and the highest expense in the future is definitely the maintenance. To be very honest, RM7 million is not such a big amount for some and I look forward to the new owner being interviewed in future by The Edge Property on why he bought the RM7 million ‘mansion.’ Happy reading.
written on 4th Oct 2015
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