This article first appeared in The Edge Malaysia Weekly on April 27, 2026 - May 3, 2026

LAND prices in prime locations on Penang island have surged to record highs, rising from RM800 to RM900 psf in 2022 to RM1,400 psf today.

Despite a surplus of residential properties across the state, prime land remains a magnet for investors, says One Asia Property Consultants chief operating officer Lim Ewe Tatt.

A “paucity of development land” on the island has driven prices in the prestigious Pulau Tikus neighbourhood to the RM1,400 psf mark, he tells The Edge.

Currently, the neighbourhood — covering Gurney Drive, Kelawei Road, Burma Road, Jalan Tunku Abdul Rahman (also known as Ayer Rajah Road) and Jalan Utama (Western Road) — boasts the most expensive development land on the island.

“The land in Pulau Tikus is usually small, with mixed-use zoning, allowing the property to be developed for residential and commercial purposes. Land size usually starts from about half an acre to slightly over two acres,” Lim says.

Such prime plots are highly coveted for serviced apartment projects and long-term capital appreciation. There are currently six vacant development plots up for sale in the neighbourhood. They are:

• A 26-acre site on Gurney Drive owned by Consortium Zenith Construction that carries a price tag of RM1,400 psf. With an approved plot ratio of 6.5, the site could host a skyscraper of up to 79 stories, with units potentially selling for RM2,000 psf;

• A 72,000 sq ft plot with residential status on Jalan Utama is priced at RM43 million, or about RM600 psf;

• On Jalan Burma, two mixed-use plots (two acres and 22,000 sq ft) located close to the police station and the Chaiya Mangalaram Thai Buddhist Temple, popularly known as the Sleeping Buddha Temple, are priced close to RM1,400 psf; and

• Two smaller plots (17,000 sq ft and 0.5 acre) on Jalan Tunku Abdul Rahman are selling for RM13 million and RM20 million respectively.

The pace of appreciation has been rapid. Lim notes that just four years ago, similar vacant land on Gurney Drive was selling for RM880 psf. Between late 2024 and today, Pulau Tikus has seen at least 15 land transactions.

“Two along Burma Road were sold last June for about RM1,100 psf. They weren’t big, probably less than an acre each, but because they could be used for residential and commercial purposes, the selling price exceeded RM1,000 psf,” he says.

More recently, in January this year, a 2.32-acre freehold plot at the corner of Jalan Kelawai and Leandro’s Lane was sold via tender for RM130 million, or RM1,287 psf. The land is about 100m from Gurney Paragon Mall. “The comparison gives an idea of the quantum of increase in prime areas in just a few months,” Lim says.

Farther out in the suburbs, land prices have also been on an uptrend, rising from RM500 psf in 2022 to about RM700 psf now.

A 2.6-acre site currently occupied by the Penang Japanese School is on the market for RM79 million. Located on Jalan Sungai Pinang, the site is being marketed as suitable for serviced apartments or light industrial use. “We are getting queries mainly from Malaysian investors from Kuala Lumpur with partners from China,” Lim says.

Several more landmark sites of this kind are also drawing attention, including the 118-acre Penang Turf Club land, priced at RM1.5 billion, which has attracted interest from two local parties, he adds.

“They are likely to partner with an overseas buyer.”

Sunway Group is said to be eyeing a 60-acre parcel on Andaman Island, a reclamation project on Gurney Drive. The group is reportedly in talks with Eastern and Oriental Bhd (KL:E&O), the developer of the reclaimed land, which is asking for around RM1,000 psf for the parcel.

According to sources, Sunway officials visited the site in the second half of last year and were prepared to offer RM600 psf. Just before Chinese New Year, the team visited the Andaman site again. Sunway has declined to comment on this matter and E&O says it has no comment. “Any formal developments will be announced in due course,” says an E&O spokesperson.

In January this year, Sunway, via Sunway Bintang Sdn Bhd, acquired a 0.42ha freehold site on Pangkor Road, George Town, for RM61.45 million, or RM1,420 psf. Located about 500m from Gurney Bay, the site is earmarked for a RM274 million mixed-use development comprising serviced apartments and retail components.

Lim says developers are now more keen to develop fully furnished serviced apartments. “Given the high land cost today, developers prefer to build serviced apartments, as they fall into the commercial category, which gives developers a higher plot ratio.”

According to the National Property Information Centre (Napic), Penang island’s serviced apartment price index hit 123.9 points in the second quarter of 2025 — the highest in Malaysia — rising 23.9 points from the base year of 2018, significantly outpacing Johor Bahru (113.1), Petaling (104.6 points) and Kuala Lumpur (104.4 points). The metric measures price changes in serviced apartments over time.

The latest figures show that Penang island continues to outperform other major cities in terms of long-term capital appreciation, supported by sustained market interest, Napic notes in its preliminary 2025 report on the Klang Valley, Johor Bahru & Pulau Pinang Serviced Apartment Price Index (SA-PI).

Lim says that in 2025, the number of unsold completed serviced apartments in Penang fell to 265 units worth RM349.75 million, from 339 units valued at RM414 million in 2024. He adds that 3,784 serviced apartments were under construction last year, compared to 1,620 in 2024.

The value of residential properties along Gurney Drive has increased between 5% and 10% in the last couple of years. “Condominiums in the secondary market along the famous seafront promenade are selling for RM750 psf, up about 5% from two years ago,” he says.

Penang continues to be a favoured destination for investors from Singapore, Hong Kong, China and Indonesia, according to E&O general manager (marketing and sales) Ramesh Gnasegaran. It is also seeing increasing interest from Taiwanese buyers.

“The high-end property market in Penang, particularly homes priced above RM1 million, has seen a noticeable uptick, as reflected in recent project launches. Local demand remains robust, with homebuyers showing sustained confidence in the market,” Ramesh says.

The recent strengthening of the ringgit has not diminished their interest. “In fact, it is seen as a positive sign of Malaysia’s improving economic conditions, which boosts investor confidence in the local property market. Overall, the market is performing better than a year ago, with continued interest from both local and foreign purchasers,” he says.

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