|City&Country: Cover Story-- Damansara Kim stirs|
|Written by Wong King Wai|
|Monday, 07 February 2011 00:00|
Demand boost from new projects nearby
Popular residential areas such as Taman Tun Dr Ismail (TTDI) in Kuala Lumpur and SS2, Damansara Jaya and Damansara Utama in Petaling Jaya are mature neighbourhoods in the Klang Valley. Real estate values and rents in these areas are constantly moving up and are a far cry from when these neighbourhoods were established.
Lying smack in the middle of these areas (see map) is SS20, better known as Damansara Kim. Property values he re have lagged behind those in TTDI and Damansara Jaya slightly but are comparable with those in SS2 and Damansara Utama. Recently, however, asking prices in the neighbourhood seem to have spiked. Real estate agents say this could be due to the presence of several new projects in the vicinity.
Damansara Kim was developed in the 1980s by Capital Land, the property division of Tan Lai Kim Group of Companies. As the developer has closed the file on the development, no details could be obtained but it is estimated that the 110-acre freehold tract has about 800 houses — mostly terraced and some semi-detached and detached — and about 50 shop lots. The area also boasts a school (SMK Damansara Utama), a private hospital (Damansara Specialist Centre) and popular eateries.
Jerome Hong, managing director of PA International Property Consultants, offers possible reasons for the initial price lag in Damansara Kim. “The other housing schemes such as TTDI, SS2 and Damansara Jaya are larger and offer diverse residential property products that can accommodate a larger population base, which in turn supports the commercial offerings. Also, these schemes appear to have better accessibility than Damansara Kim, which is bordered by Lebuhraya Damansara-Puchong and Jalan Damansara. In addition, the Bukit Kiara Muslim cemetery is located a short distance east of Damansara Kim, separated by Jalan Damansara and Sungai Penchala,” he explains.
He believes Damansara Kim will continue to be less popular because of the lack of amenities like parks and shopping malls, and the age of its buildings.
K H Tan of Allied Group Property Consultant attributes the price lag to “zero” space for further development in the area. “Damansara Kim is a small enclave surrounded by major roads. It is like a small island with not much room for further development, which limits its potential, especially for shops,” he remarks.
But new developments nearby have created more demand in the area.
“Asking prices for properties in Damansara Kim have gone up partly due to Tropicana City and Glomac Damansara. At the end of 2009, house prices were between RM500,000 and RM600,000. Now, asking prices for the 2-storey terraced houses are between RM750,000 and RM800,000,” says Y L Tey, a property negotiator with CBD Properties Sdn Bhd. “I’m getting more enquiries for Damansara Kim properties and there seems to be more demand than supply.”
Ken Ng, a property negotiator for Kim Realty, believes the appreciation in values in Damansara Kim over the years is directly related to executives working in the Damansara Uptown commercial area — located across from Damansara Kim — and constantly looking for affordable places to rent or buy. More demand is expected for homes to rent when commercial development Glomac Damansara is completed.
A quick glance at property classified advertisements shows that the prices of 2-storey terraced houses in TTDI range from RM910,000 to RM1.25 million, depending on the location, while in Damansara Jaya, 2-storey terraced houses are going for RM800,000 to RM2.1 million. In SS2, 2-storey houses are priced at RM790,000 to RM1.2 million while in Damansara Utama, similar houses are going for RM720,000 to RM825,000, again depending on location. By comparison, asking prices for 2-storey terraced houses in Damansara Kim range from RM720,000 to RM788,000.
Peter Kok, a property negotiator with Reapfield Properties, says that in 2005, the average selling price for these 2-storey terraced houses was RM350,000. It rose to between RM400,000 and RM550,000 from 2007 to 2009, and from last year, it has been RM650,000 to RM750,000.
“The area has become more exciting compared to three years ago,” says Kok. “I’ve had clients who knew of the Tropicana City Mall development before it started and bought property here for investment. Many of those interested in the area are attracted to it because of its location, the amenities and its accessibility.”
See Kok Loong, director of Metro Homes Sdn Bhd, believes house prices in Damansara Kim, although lagging those in the larger neighbourhoods, will not be too far behind. However, he says the lack of security features in the area might turn some buyers off.
“There are multiple entry and exit points and all the roads are connected to each other. Plus, Damansara Kim has shopoffices, a school and a hospital. It is almost impossible for residents to convert the area into a security guarded area like Damansara Utama or Damansara Jaya.”
Landserve Sdn Bhd’s managing director Chen King Hoaw believes house prices in Damansara Kim are as attractive as those in some of the surrounding schemes, such as SS2 and Damansara Utama (see table). However, based on averaged prices house values hover between RM500,000 and RM 580,000 depending on size and location.
“Demand is hot for houses in Damansara Kim, with its houses fetching more or less the same as similar houses in SS2 and Damansara Utama,” says Chen.
“Most homebuyers looking for terraced houses in this locality would consider these schemes as one neighbourhood that is well served by roads and is in close proximity to schools and shopping, medical and other amenities. Nonetheless, the prices are likely to stay substantially lower than those of similar houses in Damansara Jaya and TTDI.”
Reapfield’s Kok identifies two transactions of 3-storey, 1,980 sq ft shop lots. One was sold for RM1.5 million in January 2009 while the other went for RM2.2 million in February last year.
Hong of PA International recorded the sale of a 3-storey shophouse for RM2.255 million in June last year. By comparison, similar 3-storey shophouses in nearby TTDI’s Jalan Tun Mohd Fuad start at RM3 million.
Still, the shophouses in Damansara Kim that are located directly opposite Glomac Damansara in Jalan Damansara might see their prices rise significantly when Glomac Damansara is completed in 2015.
“I see shophouse prices in Damansara Kim increasing as a result of the Glomac Damansara project,” Kok says. “The offices there will give more business to the existing retail outlets.”
Allan Soo, managing director of CB Richard Ellis (Malaysia), also believes prices in the neighbourhood will generally move up, especially for the shophouses facing Glomac Damansara.
“Theoretically, it should be positive for property prices there because of a few things like office workers in the area wanting to rent or even buy something to live in. That would push prices, rents and occupancy levels up.”
Landserve’s Chen says although the prices of shopoffices in Damansara Kim have caught up with those of shophouses in secondary rows in Damansara Utama, only one or two units have changed hands annually in the last five years. “Prices of shophouses have already gone up and we do not expect sharp increases in the near term as rental levels at this moment do not support such pricing. Furthermore, for the area to thrive as a commercial hub, we need size, which is what is lacking.”
As for rents, Hong of PA international says those for the 2-storey terraced houses in Damansara Kim are between RM1,500 and RM2,000 a month.
Kok says the rent for the ground floor of the shop units here start at RM5,500 a month while that for the subsequent floors is from RM1,500 a month.
Because the area is smaller than the other schemes in the area, Hong advises homebuyers to buy for their own use rather than investment.
However, the ongoing property developments might present investors with some opportunities. “The gradually changing landscape in the immediate locality with the Glomac Damansara development, the Oval Tower office development by Monoland, which is next to the Bukit Kiara Muslim Cemetery, an office building by Bellworth Development Sdn Bhd in TTDI and so on, properties in Damansara Kim may appear attractive to investors as there may be upside potential for capital appreciation,” Hong says. “Also, the recent high price escalation for landed residential properties in nearby TTDI, SS2 and Bandar Utama makes properties in Damansara Kim seem more affordable due to their lower entry cost.”
Reapfield’s Kok says Damansara Kim’s property values will be affected positively as owners compare their values with those of the Glomac Damansara project. “I think the Glomac project has bought some form of excitement to the community and the surroundings, although some residents may not like the added density.”
Damansara Kim may have fallen off the radar screen of property investors and purchasers for some time now but it certainly looks set to come out of the shadow of its more popular and larger neighbourhoods.
The Tropicana City project comprises a shopping mall, office suites and apartments and has a gross development value of RM310 million. It sits on 9.1 acres of freehold land.
The mall opened in 2008 and is 90% occupied.
Its net lettable area (NLA) is 435,682 sq ft while rents range from RM7.50 to RM28 psf. The Tropicana City Office Tower is 92% occupied, with office rents ranging from RM4.50 to RM5 psf. It has an NLA of 101,646 sq ft.
The Tropicana Tropics serviced apartment project has 601 units spread across 29 storeys atop the mall. With an average size of 600 sq ft, the apartments are 98% sold. The selling price two years ago was RM254,000 or RM440 psf. Today, it is RM650 psf.
The developer will soft launch Phase 4 of the development, comprising two 26-storey blocks of serviced apartments, after Chinese New Year on Feb 12. The indicative selling price of the units is RM613,560 or RM600 psf while their sizes are from 1,022 to 2,475 sq ft.
The development comes in five phases. Phase 1 will feature 5 and 8-storey shopoffices and a 16-storey office block. The shopoffices are sold out while the office block is open for sale en bloc. Phase 2 will see the building of a 25-storey office tower, which has been sold en bloc to Lembaga Tabung Haji.
Phase 3 is a boutique retail building the soft launch of which is targeted for March this year. Phase 5 is a 17-storey office block, targeted for launch in 2013 but this is subject to change, the developer says.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 844, Feb 7-13, 2011