KUALA LUMPUR: Oriental Holdings Bhd (OHB) is making a strategic move into Penang’s commercial property sector, eyeing opportunities in the growing flexible workspace market.
The group said the rising demand for adaptable office solutions presents an ideal chance to establish a presence in this evolving segment.
OHB is planning to acquire the 15-storey Wisma Boon Siew from its major shareholder, the Loh family. This will mark the group’s first commercial property in Penang, providing it with a foothold in the state’s office space market.
In a filing with Bursa Malaysia, OHB disclosed that the purchase price for Wisma Boon Siew, which includes two showrooms and several car parking bays, is RM43 million. The group plans to invest an additional RM25.56 million to modernise and refurbish the building.
The refurbishment will cover architectural enhancements to the façade, cladding, and floor finishes, structural repairs, as well as essential mechanical and electrical upgrades, OHB said. The renovation is expected to be completed in the second half of 2026, transforming Wisma Boon Siew into a modern, high-quality commercial asset within OHB’s diversified portfolio.
According to Knight Frank Malaysia, Penang Island had an existing supply of around 7.08 million sq ft of purpose-built private office spaces in 2024, reflecting a modest 3.2 per cent year-on-year growth. However, in the first quarter of 2025, total supply fell to 6.32 million sq ft following a National Property Information Centre (NAPIC) recategorisation exercise, which removed smaller or older buildings no longer functioning as offices.
Despite these fluctuations, the overall supply of office space in Penang has remained relatively stable over the past six years, ranging from 6.79 million to 7.31 million sq ft. This stability is largely due to the repurposing of older office buildings into hotels, serviced apartments, healthcare facilities, or educational institutions, suggesting slow organic growth in the island’s office market.
Knight Frank expects Penang’s office sector to remain steady in 2025, even with three new towers adding roughly 608,010 sq ft of space. While average rental rates for existing offices may face pressure, newer, modern spaces are expected to attract strong demand, particularly in the co-working and flexible workspace segment.
The co-working market in Penang is poised for significant expansion in 2025, driven by increasing demand for flexible work arrangements and strategic expansion by leading operators. OHB’s entry into this market, through Wisma Boon Siew, positions the group to capitalise on this trend.
Beyond office space, OHB continues to expand its hospitality footprint, having announced plans to acquire three Bayview hotels from the Loh family for RM368 million.
The acquisitions include Bayview Beach Resort Penang for RM167 million, Bayview Hotel Georgetown Penang for RM110 million, and Bayview Hotel Langkawi for RM91 million.
Upon completion, OHB’s domestic hotel portfolio will expand from one to four properties, complementing its six hotels abroad. The group aims to increase contributions from its local hospitality operations, which accounted for just 4 per cent of its hotels and resorts segment revenue in FY2024.
OHB’s executive chairman, Loh Kian Chong, who holds a 0.16 per cent direct stake and an indirect 42.62 per cent interest via Loh Kar Bee Holdings Sdn Bhd, Loh Boon Siew Holdings Sdn Bhd, and Global Investments Ltd, is deemed an interested party in the transactions.
Following the acquisitions, OHB plans to invest RM210.73 million in refurbishment and rebranding to reposition the three hotels under international hospitality names.
Bayview Beach Resort Penang will undergo a RM107.62 million upgrade and reopen as Ascott Batu Ferringhi Penang; Bayview Hotel Georgetown will receive RM92.2 million in renovations and be rebranded as Oakwood Georgetown Penang; while Bayview Hotel Langkawi will see RM10.79 million in improvements and emerge as FOX Hotel Langkawi.
All acquisitions are expected to be completed by the third quarter of 2026, subject to approval from non-interested shareholders at an upcoming extraordinary general meeting.
© New Straits Times Press (M) Bhd
