In the last few days, there has been much concern about foreigners buying up pre-war properties in Penang and non-governmental association George Town Heritage Action has criticised the state government for its apparent lack of control over the alleged World Class Land (WCL) buying spree.
“This company’s business model is to buy the properties, evict the tenants, renovate or rebuild, and then drastically increase rentals,” said co-founder Mark Lay, who claimed it is still on an acquisition track.
At a press conference on Thursday, Lay revealed a list of 236 properties purportedly acquired by WCL through several subsidiaries.
Lay claimed that buyers are snapping up buildings that are located just outside the state’s heritage enclave as these properties are not accorded heritage protection by Unesco.
Lay told NST that newly-appointed heritage commissioner Datuk Mokhtar Jait had the power to protect heritage buildings under the Penang Heritage Enactment 2011 (Regulation 2016), which was gazetted on Thursday.
He said the commissioner had the authority to gazette any premises he deemed an heritage site to prevent them from being sold.
“The commissioner has the discretion to protect old buildings. He has the power to stop renovation of pre-war houses, and I urge him to address the matter of bulk buying of old houses in the heritage zone promptly.”
The problem is, cash is king and unless funds come in to protect our heritage, these dilapidated buildings will continue deteriorating. This doesn't bode well for the owners as well, who can't raise the rental too much.
In a Catch-22 situation, their only option seems to be to sell and make some money out of it. The usual modus operandi for these purchasers seems to be to tear down and rebuild. It definitely makes more business sense since these properties are on valuable prime land.
There have been instances of Malaysians buying such properties, rehabilitating and then putting them to good use, like architect Hijjas Kasturi who turned his into a hotel. But how many people can afford to do that? Such ventures would definitely run into hundreds of thousands of ringgit. And that is probably only for renovation costs.
The English portal reported that since December 2013, WCL has reportedly bought 236 pre-war houses on the island. Totalling more than 250,000 sq ft, the acquisition covers the size of 26 football fields.
Recently, it applied to build a 46-storey condominium tower in Gurdwara Road, just 200m from Komtar after snapping up another 37 pre-war properties in that area.
Its latest block buy appears to be 26 pre-war houses on Penang Road and Bertam Lane, owned by six descendants of Tunku Kudin, the great grand uncle of the late first Prime Minister, for nearly 100 years.
WCL offered about RM980 per sq ft, totalling RM21 million for the properties, located just across from Komtar.
Tengku Abdullah Tengku Mahadi, 61, who collected the rent on behalf of his 92-year-old father, said the deal was sealed in Thailand through one of the six heirs who spoke for all of them.
“All the heirs are in their late 80s and 90s. It will cost too much to develop the land ourselves.
“We didn’t really feel like selling. We know the new owner will change the whole place but we are all old and don’t want to stand in the way of development,” he told The Star.
He said the heirs only earned about RM50 per month from each unit when the Rent Control Act was in force. After the act was repealed in 1997, rental was raised to about RM600 where it had stayed the same ever since.
Lay warned that if the state government allowed “one company to accumulate more than 230 pre-war houses, it will kill diversity and people’s moral rights to the city”.
“Our concern is also socio-cultural. Any company can damage the fabric of George Town when they have a monopoly,” he added.
In June, The Star reported that Singaporean companies typically raise rentals by 400% to 500% after sprucing up the old houses.
Penang Town and Country Planning Committee chairman Jagdeep Singh Deo responded by saying the state cannot interfere with free enterprise.
According to eviction notices by WCL's lawyers, the 60-plus tenants have until end November to move out.