Thinking of Doing Business in George Town?


According to a recent article by The New York Times, a nineteenth-century shophouse in George Town, which was purchased by a couple in 2009 for nearly RM595,000 and cost approximately RM298,000 to renovate, is now valued at over RM2.75mil.1

In nine years, the price has more than quadrupled. The average transaction price for such properties is now at about RM1,800 per square foot, from RM300 pre-2008.2

Many buildings in George Town are used for commercial purposes, and certain activities in specific areas are highly encouraged under the implemented George Town Special Area Plan (SAP) – for instance, the gold and gem trade, as well as the restaurants catering to the Indian Muslim community, around the Kapitan Keling Mosque and the gold bazaar area.

Natalie found the manhole of the drain behind her shop too small to be connected to the sewer.

However, not all buildings can be converted for commercial use. Such a procedure can cost a huge sum – we’re talking about thousands of ringgit. Setting up shop in George Town is no small matter. Natalie*, for instance, found renting in George Town to be exorbitant: on Lebuh Love, monthly rental ranges from RM6,000 to RM8,000.

“I thought that since my business is doing well in George Town, I should invest in a property of my own instead of paying such high rental every month. But then, the current property market does not permit me to do so,” says Natalie. A corner property along Lebuh Argus would cost her RM2.9mil.

She has an additional problem: her current premises is classified as residential property; commercial activities are disallowed. Her landlord bore the cost of her temporary business license, which is cheaper than changing the land use. It is not, however, a long-term solution.

Cheang* has the same concerns. He rents the third and top floors of a residential building for RM700, using the space as his wood carving studio. His business partnerrents the rest of the building for RM1,600. The building was also poorly maintained, being previously used as a swiftlet farm: “When I first saw the house, it was in a very bad condition – the roof was leaking and the walls were moldy.”

As the property is very near to the busy Lebuh Armenian, Cheang and his partner are holding on to it. It’s good for business, after all.

Restoration Woes

While the newcomers have their problems, the established traders in George Town have their fair share of them too: many underwent difficulty when the Rent Control Act was abolished in 2000. Wong Kok Leng, 73, is a leather maker and repairer. In 2000 he was evicted from his childhood home on Lebuh Chulia (which has since been converted into a boutique hotel). He currently rents a building along the same street.

In the beginning, rental was at RM400 per month, miscellaneous upkeep costs notwithstanding: “Previously, a huge tree covered the inner part of the building and I spent around RM20,000 to have it removed. This was followed by various repairs – from the roof, the walls and the staircase to the construction of a toilet,” says Wong. While rental has since been revised to RM900, Wong still finds it affordable.

As renovation works prior to George Town’s inscription as a World Heritage Site in 2008 did not necessitate the use of original materials and traditional construction methods, most tenants failed to comply with the SAP when it came to preserving the buildings. Normally, a local contractor would be engaged to carry out the conservation and restoration works within a stipulated budget; the lack of awareness made it impossible for the effective monitoring of such works.

Wong Kok Leng rents his current place at Lebuh Chulia.

Choo Yew Choon, 61, is the only trishaw maker and repairer left in all of Penang. In 2002 he relocated his business from Lebuh Chulia to Jalan Pintal Tali, on a rental not exceeding RM2,000 a month, and relocated again in 2017 when his then landlord decided to sell off the property. The owner of the current building Choo operates from spent around RM8,000 to fix up the wiring, piping, roof and walls, while Choo further invested around RM6,000 to renovate the interior, using timber for the compartment rooms on the second floor and extending the toilets. He also deepened the drain at the air well with cement in order to prevent flooding within the property, contravening management guidelines.

Given the technical prowess involved in processing lime, the original building material for renovating pre-war houses, followed by the lengthy time needed to apply at least three layers of it on all the walls, Choo decided on using cement for the sake of convenience.

No Place Like It

Despite the soaring price of properties, hefty rental and oft-necessary upkeep works on centuries-old buildings, George Town remains an attractive place to live and set up shop – especially for heritage traders, who can easily obtain their raw materials within the city. “The leather and canvas shops are located nearby. On top of that, my wife can easily buy fresh ingredients from the market, which is within walking distance. There are so many old friends in this area – that’s also why I’m not giving up this space,” says Wong.

Choo has no plans of giving up his fourth-generation trishaw shop either, as trishaws still play an important role within the heritage site. “I will stay here until I retire.

Yeoh Kongsi on Lebuh Victoria undergoing restoration.

Besides, here I can temporarily park the trishaws that are under repair in front of my shop. I cannot do so anywhere else.”

For Natalie and Cheong, the presence of tourists within George Town, as well as the burgeoning traditional crafts and antiquities scene, sealed the deal.

With the George Town SAP, which encompasses 259.42 hectares (2.59km2) of the heritage site, it is expected that most of the facilities and structures – inclusive of vistas, enclaves, streetscapes, terracotta roofscapes and even drains – will be protected and upgraded for future use.

But for the time being, folks in George Town will have to bear with the nitty gritty problems of living or operating within the city until the SAP is fully enforced.

Natalie was once fined by the city council because of a clogged drain behind her shop; she later found the manhole too small to be connected to the sewer. The council then cancelled the fine based on the possibility that the clog could be due to irresponsibly disposed waste coming from the nearby market or restaurant, as her shop is level with the lower end of the street. Her toilet, located at the back of her premises, still floods when the drain water rises too fast, especially during heavy downpours.

Model of George Town's buildings.

Other matters to resolve include parking issues and the implementation of a wholesome pedestrian walkway. It is crucial for current and future public projects to promote safe, comfortable, convenient and barrier-free thoroughfares for all road users, with primary consideration for pedestrians. Wong feels strongly about the issue as the pedestrian links throughout George Town are not senior-friendly, and are very often blocked by haphazardly parked vehicles. This same issue can also be seen at the Clan Jetties and the area surrounding Kampung Kolam – tour buses, cars, motorcycles and even food stalls occupy the roadsides and pathways.

However, the most crucial issue lies with the preservation of the 5,013 heritage buildings within the World Heritage Site. It is hoped that in future, there will be alternate yet affordable methods of maintaining such buildings for the benefit of both owners and tenants. (Currently, the Heritage Seed Fund, which provides financial assistance of up to RM3mil, seeks to ease the burden of qualified owners.)

Traders are also encouraged to enrol in courses to learn better branding strategies to sustain their businesses in George Town. By being able to adapt and adjust to modern times, it would in the long run ensure the continued relevance of the city’s intangible heritage.

Preserving the authenticity and character of a heritage site is without doubt imperative, especially in the case of George Town. Traders and artisans make up an important section of its community and play an indispensable role in keeping a check and balance with the authorities on the improvement, maintenance and supervision of the city. It is up to the community, in cooperation with the authorities, to maintain, adapt and transmit George Town’s heritage for future generations.

*The names of the people discussed in this article have been changed to protect their identities.

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