Freeze! SOHO in Penang.

Recently, the Penang Island Municipal Council (MPPP) classified the two 26-storey condominium blocks of One World and One Sky in Bayan Baru as commercial property. This meant that electricity, water and assessment rates for these two condos are under commercial, in other words, higher. The owners are complaining that the rates are way too high and they cited that the assessment rate of a commercial centre in Bukit Jambul was just RM3,100 for 730sf while they are being charged RM22,800 – RM28,000 for units measuring 1,160sf to 1,450 sf. They know that the units are SOHO as it was stated very clearly in their Sales and Purchase agreement but they are not happy because the amount is way too high!

Due to this, MPPP has frozen every other SOHO developments. For developers who has just SOHO development, I think this will affect them greatly unless the matter is solved soon. Deputy Chief Minister I Datuk Rashid Hasnon said this decision to freeze all SOHO projects was for whole of Penang and is in effect for more than three years. This is because of the two major concerns; whether the buyers should be charged residential or commercial rates for electricity, water and asessment. Secondly how much parking space should be supplied since residential and commercial requirements are different from each other.

soho penangI think MPPP may want to study the reasons why SOHO developments in Klang Valley faced no such issues thus far. The decision should also be made fast because without a final decision, the current buyers of One World and One Sky may not want to pay the assessment and is actually committing an offense. the developers with SOHO projects would also suffer and the overall compliance costs would build up. In the end, prices would only increase and again, affects the buyers of such units when it is launched in future.

With land price continue to increase and buyers becoming younger, SOHO may be a solution to those who needs a roof over their head but could not afford the typical 1,000 sf units. With population growth due to the economic growth, smaller units may be key to maintaining affordability. Think about it, the real reason why SOHO came about was because of location popularity and affordability. Everyone wanted to stay at a certain place but needs something affordable, that’s why SOHO became so popular few years ago. There are certainly no SOHO units for locations which are not hot or where prices of 1,000sf condos are just RM300,000.

written on 19 April 2014

Next suggested article:  Catalyst for Suiwah, Penang – Sunshine Tower


  1. I think most of the penangites buyers do not know what is the soho means. Developer should make it clear to the buyers as Soxo is quite new to Penang.

    1. abdul halim hussain avatar
      abdul halim hussain

      Many are still in the dark what is SOHO whether it brings greater benefits. Housing is a basic needs. It must not be for speculation.

      1. Agree Abdul Halim

  2. peter pan avatar
    peter pan

    Author english very good.

  3. 1W buyer avatar
    1W buyer

    I believe the rate for water and electricity is based on residential rate. At least that is true for my 1 World unit. Only the assessment is based on commercial rate.

  4. zac phang avatar
    zac phang

    hi chialih,
    Do tell me if it you would want to rent a condo at around 2.8k per month. Because assessment fee is calculated based on annual rental value multiplied by tax %, which is around 10% for commercial and 7% for residential.
    comparing with d’piazza condo with an assessment fee of just rm300, means their annual rental value is only rm300/12*10=rm200 plus per month.. and it is in the same location as 1 world and 1sky, please tell me how the rental value could differ by so much?

    1. Hi Zac, I have no idea how mppp comes up with the assessment number for k one world or any other commercial units. However I think if both places are in the same neighborhood then it should not differ so much. We may have to wait for mppp to announce the required answers.

  5. Hi
    In my opinion, this type of SOHO doesn’t seem to be align with the concept of SOHO, as you can see at the unit layout, there are unit also come with 1,160sf to 1,450 sf. which is considered quite big unit. since the concept of SOHO is meant to be affordability and location, but also those intended to convert this SOHO into semi-office and home stay, by standard, the SOHO unit size should not be more than 1000sqf, most of SOHO project as I aware of.. the minimum is around 450sqf, 650sqf and up to 700 ++ , it is rare to have project come with unit more than 1000 sqf for SOHO. it is wisely to do a little bit of research or study before committing to any new investment unless you really know what you are buying for otherwise stay away from higher risk investment. moreover, are you aware of this high charge or willing to pay for the price since it is commercial title unless you are going to turn your SOHO into semi-office as your main objective for the sake of your business or so call good location, nothing is perfect, if you want to buy mainly for own stay, you should make a wise choice for your own objective, my 2 cents.

  6. Hi zac phang,
    Can you advise, is d’piazza condo residential or commercial title? the comparison has to be apple to apple in measuring the assessment rate.

  7. Owner from 1 world.
    Since the 1st day. The electricity n water is the residential rate…
    just the assessment rate r confusing. .. y say so??? Bcoz is higher than the CEO project….

    1. Hi Owner from 1 world,
      in fact, it is not confusing, as long as you know your project title either residential or commercial, it tells you that in what category of assessment suppose to be, surprisingly since the 1st day. The electricity n water is the residential rate, i think it is not supposed to be, the rate should be in commercial instead.
      As your assessment is higher than CEO project, may you share what is the variance, and please also take note, as CEO project is located in difference location and the evaluation may be vary from one to another. therefore, you may find the same type of SOHO project in nearby 1 world project for precise comparison.
      Lastly, i am sorry to hear for your SOHO has to bear such of expensive assessment fee, personally, SOHO is very new to Penang and it might not be practical at the moment, moreover, it is definitely not suitable for those who buy for own stay as residential purpose because of higher utilities and assessment bill unless you plan to turn your SOHO into your home office, basically, the concept of SOHO is meant to business purpose, therefore, the evaluation is total difference from residential title.
      Good luck to you and all owner from 1 world. it is just my opinion with no offensive.

  8. Hi All,
    I saw a news today pertaining to the latest announcement of assessment concern, there will be 10% rebate to the assessment rate (Annual property value) for one sky and one world project.

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