SkyWorld wins big with Penang affordable housing triumph as shares skyrocket

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SkyWorld Development Bhd has seen a significant surge in its shares following the announcement of its partnership with the Penang Development Corporation (PDC) and its subsidiary PDC Properties to develop Malaysia’s largest affordable housing project. The project, valued at RM13 billion, aims to deliver over 38,000 affordable housing units under the Rumah Mampu Milik Madani (RMM) and Rumah Bakat Baru Madani (RBB) schemes.

The agreement was signed in the presence of Prime Minister Datuk Seri Anwar Ibrahim, Housing and Local Government Minister Nga Kor Ming, and Penang Chief Minister Chow Kon Yeow. Chow Kon Yeow highlighted the project’s significance, stating, “This is a great opportunity for Penang natives and non-Penang residents working in the state to own homes at affordable prices.”

The project will be built on two plots of land in Seberang Perai: a 34-acre site in Seberang Jaya, opposite the Penang Bird Park, and a 161.5-acre site in Batu Kawan near the Design Village Outlet Mall. The units, each measuring 900 sq ft with three bedrooms and two bathrooms, will be priced between RM225,000 and RM420,000. The project also includes amenities such as a swimming pool, gym, multipurpose hall, and playground.

The RBB scheme is particularly noteworthy as it provides opportunities for non-Penang residents to own homes in the state. Chow Kon Yeow explained, “The current RMM allocates 50% of the sales to Penang natives and the other 50% for the open market. For the open market units, 25% are allocated for registered voters in Penang and the other 25% for non-registered voters. This situation makes it difficult for non-resident workers who are employed in Penang to purchase homes in the state as only 25% of affordable homes are available to them, despite the rising migration to Penang. To address this, the state government through PDC and PDC Properties has introduced the RBB concept.”

The construction of the project will employ the Prefabricated Prefinished Volumetric Construction (PPVC) method, making Penang the first state in Malaysia to adopt this approach under the Environmental, Social, and Governance (ESG) framework. This method is expected to streamline the construction process and reduce costs.

Prime Minister Anwar Ibrahim emphasized the urgency of addressing the rising demand for affordable housing and expressed his hope that the necessary project approvals would be granted by February next year. He encouraged both the state and federal governments to work together to expedite the project, stating, “Since this project was won through a tender process, we must ensure the costs are kept under control and lower than the initial projections, as agreed by SkyWorld. If all submissions are in order, I hope this project can be launched by the end of January or early February.”

Housing and Local Government Minister Nga Kor Ming echoed Anwar’s sentiments, urging more developers to take the initiative to implement affordable housing projects to meet the target of building 500,000 affordable homes by 2025 under the 12th Malaysia Plan. Nga noted that the government has already achieved 89% of this target, with 443,000 units completed, ongoing, or approved.

The project is expected to be completed over a period of 15 years, with the first phase set to launch in 2026. SkyWorld CEO Lee Chee Seng expressed confidence in meeting the project’s timeline, stating, “Since this is a mandate given by the prime minister, I think the target [to receive approvals in 40 days] can be achieved. This is fundamental and will benefit the rakyat.”

The announcement of this project has positively impacted SkyWorld’s stock, with shares opening over 6% higher following the news. Philip Capital has upgraded the stock to ‘buy’ with a higher target price of RM1.10, citing the project’s significant contribution to SkyWorld’s earnings and development pipeline.

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