White elephants of Penang
GEORGE TOWN, Oct 30 — Smack in the middle of George Town stands a tired-looking squat commercial complex with peeling paint and vacant windows that has seen better days.
This is Wisma Central, a commercial building that used to be a hive of activities almost 20 years ago when it housed offices of airlines, travel agencies, hairdressers, tailors and also a college.
Now, the building looks derelict and abandoned, with only a few businesses still in operation within the building.
If one looks at the location of the building, it is the perfect place for any office or business to set base in as it is just a stone’s throw away from Komtar and it is in Macalister Road, one of the busiest main roads in town.
Still, despite its choice location and with ample basement parking space too, businesses have either closed down or relocated over the years.
In Penang, huge commercial and retail complexes, especially decades-old ones, often have a very low occupancy rate of between 20 per cent and 70 per cent.
These are the very complexes that are becoming the white elephants of Penang, with barely struggling businesses occupying a few lots within the buildings while more spanking new complexes are being built elsewhere.
A few years ago, a CIMB research report stated that there is a commercial glut in Penang, with the state recording the lowest occupancy rate for office space in the country at 76 per cent and the second lowest for retail space at 70 per cent.
Now, the situation has worsened as the occupancy rate for commercial and office complexes in the state continues to dip and more buildings fall victim to neglect and poor management.
Some investors saw the potential in some of the complexes and decided to give these buildings a new breath of life and, hopefully, bring back the crowds and economic activities to these places.
One of these complexes, Island Plaza, was given a facelift in recent years. This was one of the first upscale malls on the island located in Tanjung Tokong.
Though sporting a new look, the occupancy rate for the mall was never like its heydays when people would flock there on weekends.
Another one is Penang Plaza, also strategically located in Burmah Road.
An investor bought over the building and gave it a new look, far different from its former “old-fashioned” appearance.
Occupancy rate may have gone up compared to previous years but it is not attracting droves of shoppers either.
In Pulau Tikus, two main complexes that are left to die a slow death are Plazone and Midlands Park as businesses moved out and occupancy drops to an all-time low.
At Plazone, occupancy could be less than 20 per cent and its joint management body is at its wit’s end trying to figure out a way to bring life back to the ailing complex.
The eight-storey tall building now only has a small supermarket on the ground floor as the anchor tenant and a sporadic few businesses within it.
“We are now thinking of how we can spruce up this place and make it a choice location for offices and retail lots again,” said a management committee member.
They have an uphill journey ahead as just a few kilometres down the road the more well-known Midlands Park is also suffering a similar fate.
It is not only old commercial buildings that are suffering low occupancy rates and turning into white elephants but a few new ones are also going down the same path.
Penang Times Square in Jalan Dato Keramat, a stone’s throw away from Komtar, has been suffering very low occupancy rates from the very start.
Now, it is being promoted as a food mall with many food and beverage outlets opening there and yet, the occupancy rate is dismal compared to its nearest competitor, First Avenue.
These white elephants, however, do not compute to a poor economic situation in the state as investors are taking up pre-war houses within the heritage zone and opening up restaurants, cafés and boutique hotels.
Also, along main roads outside of the zone, many residential buildings have been converted into commercial lots with retail shops and offices spread out sporadically all over areas like Pulau Tikus, Green Lane and even Bayan Baru.
Perhaps the most important factor is that there is an ample supply of pre-war houses in George Town which have been converted to commercial lots.
According to chartered surveyor and FIABCI Malaysia committee member Michael Geh, there is definitely a glut in retail and commercial lots in George Town.
“There are over 12,000 units of pre-war shoplots for rent or sale in George Town so most business owner would prefer to get a pre-war house or rent one rather take up a lot in a modern commercial complex,” he said.
He said this has been the trend in the past three years and areas surrounding George Town such as Pulau Tikus, Tanjung Tokong and even Tanjung Bungah will suffer the same fate.
“These areas are so near to George Town so if given a choice, business owners and offices would prefer to take up a pre-war shop lot,” he said.
This is a good thing for the inner city of George Town as it will definitely spur more economic activities but what will happen to these modern complexes with more coming up?
It will be an uphill battle for these complexes to stay afloat but perhaps it is time that developers did a thorough study before constructing yet another commercial and retail complex that could suffer the same fate as these white elephants of Penang.