If you were hoping to snag a property on fire sale in Damansara Heights, one of Klang Valley’s most sought-after residential enclaves, you’re probably wasting your time.
Recessionary times or not, there is no lack of interest in this enclave in Kuala Lumpur, which was once a rubber plantation before developer Syarikat Perumahan Pegawai Kerajaan Sdn Bhd (SPPK) transformed it into a residential address — at that time primarily for government servants — four decades ago.
Despite a slowdown in the property market amidst the global credit crisis, recent transactions in Damansara Heights have been limited as owners are in no hurry to sell.
The latest data compiled by the Ministry of Finance’s Valuation and Property Services Department shows that bungalow lots on Jalan Setiamurni, Jalan Setiabistari and Jalan Beringin in Damansara Heights were transacted at between RM500 and RM600 psf last year.
For an idea of current values, consider this: Six months ago, the owner of a 7,000 sq ft bungalow plot located within the freehold and gated Seri Beringin development in Damansara Heights put it up for sale at RM700 psf. Eager buyers responded with offers of RM680 to the RM700 psf sought by the owner.
However, the positive response prompted the owner to not only change his mind but also to raise his price twice, to RM750 psf currently. This tract, according to the real estate negotiator who is marketing it, has a flat terrain atop elevated ground. With a clear view of the Kuala Lumpur City Centre, the land was successfully bought in a tender from the developer, Island & Peninsular Sdn Bhd (I&P), for RM620 psf two years ago.
Still, not all land in Damansara Heights — including that within Seri Beringin — can command such prices. According to Regroup Associates’ data, a 9,157 sq ft tract on Jalan Seri Beringin 2 was on the market earlier this year for RM700 psf while a smaller 8,450 sq ft plot, also within Seri Beringin, was going for RM420 psf about two months ago.
The value of bungalow land in Damansara Heights hinges largely on its micro locale, shape, size, terrain and the view it offers.
Zerin Properties’ CEO Previndran Singhe tells City & Country that early this year, a bungalow plot of 8,000 to 9,000 sq ft in Seri Beringin changed hands on the secondary market for RM610 psf. Then, just before Chinese New Year, a plot of less than 10,000 sq ft in Seri Beringin is believed to have changed hands for RM400 psf. This plot apparently sits near a main road junction and faces semi-detached homes.
Seri Beringin is a 42-acre development in Damansara Heights, located on a hillock off Jalan Beringin. Developed by SPPK, a subsidiary of I&P, Seri Beringin offers semidees, bungalows and bungalow lots. The developer has retained the bungalows and some semidees for recurring income.
The first Seri Beringin bungalow lot launched in September 2005 was priced at RM350 psf. To date, the developer has sold 56 of the total of 71 lots, 25 of them via tender. Last year, two lots were tendered, and the highest bid received was RM636 psf. Of the remaining 15 lots, I&P group managing director Datuk Jamaludin Osman tells City & Country, six (from 6,000 sq ft) are being sold at about RM540 psf. The other nine lots, sitting on elevated ground, will be put out to tender with reserve prices of RM546 to RM572 psf.
Meanwhile, KS Properties’ principal, K S Liew, has been looking for a buyer for a freehold 48,000 sq ft tract on Jalan Bruas in Damansara Heights for over a year now. Interestingly, during this period, the owner increased his asking price from a range of RM350 to RM360 psf to RM398 psf. The triangular site that sits on a slope has attracted prospective buyers but the price is a sticking point, says Liew. It must be noted that some parcels of land on Jalan Bruas are close to high-tension wires as well as the construction site of the new National Palace Kuala Lumpur.
As City Two Properties senior real estate negotiator Christie Jacobs points out, land prices in Damansara Heights can swing from RM400 to RM600 psf or so. The pricier areas are the newer ones and located near Plaza Damansara, one of the commercial centres in Damansara Heights. These areas would include Jalan Setiakasih, Jalan Setiamurni and Jalan Chelagi, which can fetch RM550 to RM600 psf. Older areas like Jalan Setiarasa, Jalan Setiabudi and Jalan Setiajaya, which have been around since the late 1970s, are priced lower at around RM450 psf, says Jacobs.
The larger tracts seem to carry some discount. On Jalan Batai near the Commonwealth Club on Jalan Birah, tracts that are 12,000 sq ft and above are going for a cheaper RM420 to RM450 psf, Jacobs points out.
Land with buildings is just as attractive here. Based on Regroup Associates’ data, a semidee with land area of 3,690 sq ft on Jalan Setiakasih has been on the market for the last three months at RM3.1 million. Another unit with a land area of 3,600 sq ft in Seri Beringin was going for RM3.2 million in January.
Three months ago, a renovated 2-storey bungalow on Jalan Setiabakti (land area: 9,000 sq ft) was put up for sale for RM12 million. Four months ago, an owner was asking RM8 million for his renovated 2-storey bungalow (land area: 11,700 sq ft) on Lorong Jarak.
Not all investors in Damansara Heights are owner-occupiers. In 1999, a local bought a 2-storey bungalow (land area: 5,000 sq ft; built-up: 3,500 sq ft) on Jalan Damansara for RM1.5 million. After renovating it and increasing the built-up to 6,000 sq ft on three levels, he sold it for RM3.5 million to a foreigner, says Fernstate Sdn Bhd senior manager Shawn Fernandez.
Micro location wise, Fernandez points out that while Setiamurni and Setiabakti are hot due to their proximity to Plaza Damansara and public transport facilities, the more quiet Jalan Damansara, Jalan Jelutong and Taman Sa are equally attractive. He explains: “These areas have lots of greenery and are matured and quiet thanks to the absence of buses and taxis. Many owners here are locals who have been around for a long time and have no intension of relocating.”
At end-2005, a 15,500 sq ft bungalow tract on Jalan Damansara was sold for RM2.6 million (RM168 psf). About six months later, the same plot changed hands at 38% higher or RM3.6 million (RM232 psf). In December 2008, the owner was offered RM380 psf for the land but he did not sell, says Fernandez. He adds that the same tract can easily fetch from RM400 psf to RM450 psf today.
Semi-detached units and condominiums in Damansara Heights are just as sought after. Tan & Tan Development Bhd launched the gated Semantan Villas on Jalan Semantan back in 1997 and 1998. The 50 units of 2½-storey semi-detached homes (land area: 4,000 sq ft; built-up: 4,000 sq ft) were then tagged at about RM1.5 million and in 2005, Fernandez sold a typical unit for RM2.4 million. Two years later, the same unit changed hands for RM2.65 million.
In the second quarter of 2008, this unit again changed hands, this time for RM2.75 million. According to Fernandez, partially furnished units can fetch monthly rentals of RM12,000 to RM14,000. Foreigners make up 90% of the tenants at Semantan Villas.
Also in 2005, a about 1,800 sq ft condo at Prima Damansara on Jalan Chempenai was sold for between RM450 psf and RM500 psf. Early this year, the same unit changed hands at RM900 psf. Another Tan & Tan Development project, Prima Damansara, that was completed in 1991, has 98 units housed within a 5-storey block.
Basic, partially furnished units here are leased for between RM7,000 and RM13,000 monthly. According to Fernandez, asking prices of a basic 1,350 sq ft unit are in the region of RM700,000, which translates to RM520 psf. “This is another project with as high as 75% foreigner occupancy. Values here have risen in the last five years given the limited supply of good and well managed condominiums in Damansara Heights,” he says.
Blast from the past
Besides its strategic location, Damansara Heights’ popularity has enjoyed a boost because of the better accessibility afforded by the Sprint Highway, Duta-Ulu Kelang Expressway, Penchala Link and the widened Jalan Duta.
Besides being close to internationals schools, new commercial buildings like Menara Millenium, HP Tower and UOA with multinational tenants have emerged in Damansara Heights, boosting the housing need of expatriates. “In US dollar terms, monthly rentals of RM15,000 in Damansara Heights are considered dirt cheap,” says Fernandez, whose office has been based here for the past three decades.
Fernandez recalls SPPK selling some land in Damansara Heights to Selangor Properties Bhd to build areas like Taman Sa, Jalan Jelutong and Pusat Bandar Damansara. “Many may not know that Taman Sa is actually Taman Satu Amoy and the Pusat Bandar Damansara land was formerly planned as a golf course. Selangor Properties first sold the bungalow lots on Lorong Batai Barat for only RM8 psf four decades ago. Today, the land values here are easily RM450 psf.” says Fernandez, who has been marketing Damansara Heights properties for the last two decades.
How did Damansara Heights fare in the Asian financial crisis? Fernandez recalls that average land values dropped to as much as RM150 psf while base lending rates soared to as high as 8% to 13%. “There were some fire sales with asking prices dipping 20% to 25%. However, once we were out of the recession, prices jumped to RM200 and RM300 psf due to the high volume of buyers,” he shares.
And while property transactions in Damansara Heights have slowed following the current global credit crisis, a gradual rise in asking prices had been noted by December 2008 because of interest from local owner-occupiers, says Fernandez. “Since these are not speculative buys, I don’t expect to see a bubble here,” he says.
Zerin Properties’ Previndran, in fact, sees prices of bungalow land in Damansara Heights still moving up due to the limited supply.
Regroup Associates executive director Paul Khong says demand in the locality has always been strong and relatively stable because it is acknowledged as an established upmarket area which many of the country’s social and corporate elite call home.
Fernandez notes that the last two years have seen an influx of foreign buyers, mainly from the US, Germany, England and Europe, looking for both landed and high-rise properties for their own use. “Having lived here, they like Damansara Heights not only because their friends are close by, but also because they have witnessed how property values and rentals here have performed,” says Fernandez. He adds: “Don’t expect fire sales in Damansara Heights.”
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 753, May 4 – 10, 2009.