City&Country: Cover Story-- Final phase takes shape

For many locals, Damansara Uptown evokes memories of late-night suppers at hawker outlets and landmarks like the Fajar supermarket. While the once popular supermarket is no more and the teens and 20-somethings of the 1980s have all grown up, Damansara Uptown continues to be a hotspot.

This prime commercial precinct in Damansara Utama is poised for further transformation with a RM1.5 billion mixed-use development that will feature two blocks of serviced apartments, a neighbourhood mall, serviced residences and an office tower. Damansara Uptown master developer See Hoy Chan Sdn Bhd Group (SHCSB) envisages the project, when completed in 2016, to be a one-stop venue for business, leisure and residency.

SHCSB first developed and completed Uptown in the early 1980s. The first phase of Uptown, as it is commonly called, comprised 4-storey shopoffices, office towers Uptown 1, 2, 3 and 5, as well as a multi-storey car park with a hawker centre called Uptown 7. Left undeveloped was a 15-acre freehold parcel used as an open-air car park. Uptown 3 was sold to Lembaga Tabung Haji and Uptown 5, which is stratified, SHCSB owns about 50% of the units, while the rest are owned by individual owners.

Fast forward two decades and SHCSB is developing Phase 2 on the 15-acre parcel. “After work, one will be able to do grocery shopping, go to the gym or have a nice meal with friends all in the same area,” says executive vice-president Joe Tan. “This takes out the hassle of driving somewhere just to do something. Everything will be a stone’s throw away.”

The first component is the two-tower serviced apartments Uptown Residences. It was launched in April this year and to date, has a take-up rate of over 81%. “The high take-up of our residential units is testament to the immense confidence and trust the consumers have in our projects as well as the appeal of the location,” says Tan. He adds that the serviced apartment block is the only component of the development for sale while the other structures will be kept for recurring income.

Unique identities
The Uptown Residences is a unique development — the two towers will have different personalities as they are designed and named according to their respective target markets. There is the 30-storey Family Tower and the 32-storey Lifestyle Tower, with a total of 380 units.

“The reason for the two different towers is because we understand that the two groups have differing lifestyles and we wanted to cater to their different needs,” explains Tan.

The Family Tower will cater to families and the 202 typical units are larger in size — between 1,687 and 2,516 sq ft. Prices start from RM1,188,800 or RM850 psf. The units will not be furnished, says Tan, to allow the owners to renovate them according to their personal taste. The units will have a private lift lobby and each floor will only have eight units.

Meanwhile, the Lifestyle Tower will have fully-furnished typical units designed for singles and couples. The 170 one-bedroom units will have built-ups of between 734 and 1,040 sq ft. Those looking to get a unit there will be sorely disappointed as all have been sold at prices starting from RM584,800.

Another difference is that the Lifestyle units will have a specially designed space-saving utility box or U-box that conceals the laundry and storage area, which the Family units will not have.

SHCSB says the sale of the furnished Lifestyle units on the upper floors at prices exceeding RM1,200 psf sets a new benchmark for freehold residential developments in Petaling Jaya. Tan explains that the furnished Lifestyle units will make it easier to rent out and also ensures a cleaner site as there won’t be contractors and workers coming into the tower.

As for parking, the service apartments will have 1,085 bays, with two bays for each Lifestyle unit and three bays for each Family unit.

Both towers will enjoy shared facilities such as a swimming pool, gym, badminton court, half-basketball court, tennis court, sport lounge, activity centre and reading/tuition room. Uptown Residences is expected to be completed in 2014.

Neighbourhood mall
The next component to be rolled out after the Uptown Residences will be the neighbourhood mall, which Tan says will meet the shopping needs of residents from Damansara Jaya, Damansara Utama, SS2 and Damansara Kim.

“This mall will complement the other malls nearby,” Tan explains. “There will be more F&B outlets and a supermarket in the basement that will take up 35,000 sq ft.” Negotiations are still ongoing with the prospective supermarket operator, he adds. The net lettable area (NLA) is 350,000 sq ft and the mall will have 2,820 parking bays.

This will be followed by the construction of the 24-storey Somerset Serviced Residence that will sit atop the mall and will be managed by The Ascott Ltd. There will be furnished studios, 1 and 2-bedroom apartments with fully equipped kitchens. Construction of the mall and the serviced residence is scheduled to start in 4Q2012 and completed by end-2015 and mid-2016 respectively.
“There are multinational companies in the four office buildings in Damansara Uptown that have asked for a hotel in the area for visiting clients. We decided to build the Somerset Serviced Residence to meet this need,” says Tan.

The final component in Phase 2 will be the 38-storey office tower that will have a NLA of 460,000 sq ft and 1,380 parking bays. “For the new office, this translates to one car park bay for every 333 sq ft of office space, a provisioning that goes beyond the 500 sq ft-to-one-bay requirement,” Tan says.

The building will be built to attain certification under Malaysia’s Green Building Index (GBI). At the same time, the developer will also apply for MSC status to attract international and IT firms to take up residence in the office building.

“We are continuously engaged in balancing our tenancy mix to avoid an over-reliance on any specific industry,” says Tan. “Right now, we have a very good mix of local and foreign multinational corporations (MNCs). It is also part of our strategy to encourage more MNCs and IT companies to be based in Uptown as these will provide a good flow of business customers to our upcoming serviced apartment.”

Overcoming traffic woes
Some of the key complaints about Damansara Uptown are traffic congestion and the lack of parking bays. SHCSB is aware of these issues and plans have been drawn up to solve these problems.

During the construction of Phase 2, Tan says that  the Uptown 7 multi-storey car park  that has been refurbished and has 1,200 parking bays, charges RM1 for the first three hours instead of RM1 per hour previously.

“Before we changed the rates, the car park in Uptown 7 was 30% filled. After the change, it is now up to 90% filled,” says Tan. The parking rate is lower than the Petaling Jaya City Council’s rate of 60 sen per hour at on-the-road public parking bays. Moreover, Tan says the company also provides a free shuttle service to ferry people to their destination within Damansara Uptown.

To make more car parks available for patrons to Uptown, the basement floor section of the mall’s car park will be completed ahead of the mall. “An initial 500 car park bays in the basement will be opened first, even as the mall’s construction is in progress, to increase the parking facilities in Uptown,” says Tan. Earthworks are currently underway for the mall and the other components.
If these are not enough, Tan says that weekend patrons of the mall will be able to utilise the existing car parks in the four office blocks that have a total of 2,949 bays.

To ensure smoother traffic flow in and out of Uptown, several initiatives are being put in place. The first is a tunnel leading from Lebuhraya Damansara-Puchong (LDP) that will directly connect to Uptown Phase 2’s mall basement car park, allowing cars to enter and exit the vicinity quickly. Construction of the tunnel is underway.

Another plan, which is pending approval, is to build an elevated ramp connecting the area to the Sprint Highway. Lastly, Tan says there will be a widening of merging lanes to the LDP heading towards Kuala Lumpur. This will include relocating a bus stop to ensure smoother transition during peak-hour traffic.

Tan discloses that the total cost of building the tunnel, proposed ramp and road widening is about RM40 million, which will be borne by the developer.

Efforts by SHCSB to resolve the traffic and parking issues and unlock the value of the Phase 2 land has heightened interest in Uptown, so much so that property values of existing 4-storey shopoffices have risen.

According to Tan, 4-storey shopoffices in Uptown are being advertised at between RM3.5 million and RM3.8 million. Five years ago, the same units were going for RM2.5 million. Tan estimates that these units have appreciated by 15% to 20% annually.

Although values are rising, the years have taken a toll on some of the shopoffices. As such, the area needs freshening up, especially if it is to fit in with the newer Phase 2 development. Tan has been trying to persuade owners of the shopoffices to think about refurbishing their units.

However, he understands the problems they face. One is that the units may have tenants and there is never time for any upgrade to take place. Some owners may also not be willing or able to suffer loss of income when the unit is undergoing renovation or refurbishment.

Nonetheless, Tan is constantly talking with owners on the benefits of refurbishment. SHCSB owns about 50 out of 394 shopoffices in Damansara Uptown and units that have been refurbished have already seen the benefits.

Renovation and refurbishment costs about RM400,000 for one shopoffice, says Tan. Refurbishment typically takes six months and the units are rented out within three months. Rents for the ground floor increased to RM8,000 to RM10,000 per month from RM5,000 to RM6,000 per month after the upgrade.

As an incentive to owners who want to refurbish their units, Tan says the company is willing to share the plans from the architect who worked on their units. Some owners have taken up the offer. However, Tan admits the going is slow and the company is still in the early stages of trying to convince owners to take “short-term pain for long-term gain”.

REIT plan
As Phase 2 takes shape, SHCSB is already making plans to create a real estate investment trust (REIT) once it is completed. Tan says the REIT will include Uptown 1, 2, 7, the new office building, neighbourhood mall and Somerset Serviced Residence. The total value of the buildings will be about RM2 billion, he adds. The overall occupancy for Uptown 1, 2 and 5 is above 90%, with rental rates ranging from RM4 to RM4.50 psf.

“Once Phase 2 completed we will look into a REIT as we have critical mass to do so and we can control security and also tenant mix,” says Tan. The company is targeting to establish the REIT one year after the completion of the entire Uptown Phase 2, he adds.

In addition, the developer recently acquired 7.5 acres of land in Ara Damansara for RM90 million. It plans to build apartments there and is in the process of preparing the necessary submissions.
Tan reveals that the company is on the lookout for niche landbank in prime locations within the Klang Valley.

As SHCSB has enough investment properties, Tan says future developments will be for sale. At the moment, the ratio of investment property to property development is 80:20 and he would like it to be more even in the future.

“The new ratio is part of our rebalancing initiative. As part of our build-and-hold model, we are currently holding a good basket of properties and we are also developing Damansara Uptown Phase 2 which will represent a key part of our core property holdings,” Tan explains.

“Upon completion of Phase 2, we will have a good mix of properties comprising shopoffices, office buildings, retail mall and serviced apartments, and this will place our build-and-hold business in a strong position for the medium and long term. So, from here on, we are actively seeking new landbank to ramp up our activities in the develop-and-sell category.”

SHCSB’s other ongoing developments include Seringin Residences and Tujuh d’wangsa. Launched last year, Seringin Residences is located in Happy Gardens off Old Klang Road, and is about 80% taken up. This RM500 million freehold condominium project sits on a 6.4-acre land and features two 25-storey towers with total of 542 units.

Its uber-luxurious Tujuh d’wangsa project in Titiwangsa, Kuala Lumpur, features only seven bungalows on a 0.87-acre site and is almost fully sold. The 3-storey units come with a swimming pool and lift each. Prices start at RM4 million, with built-ups from 5,255 to 7,146 sq ft.


This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 918, July 9-15, 2012

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