Potential awaits in Dutamas

DUTAMAS is an upcoming, upscale neighbourhood in Kuala Lumpur flanked by Mont’Kiara and Segambut. Compared with high-end Mont’Kiara next door, Dutamas offers alternative options for homebuyers and property investors who enjoy the perks of luxury living at lower prices.

Once a lush part of Kuala Lumpur, the enclave has gained much popularity in recent years, thanks to new commercial developments in the area.

Anchoring Dutamas is the Malaysia External Trade Development Corporation (Matrade) complex, which is currently undergoing redevelopment. Other landmarks include the Ministry of International Trade and Industry, the Kuala Lumpur Courts Complex, other government offices and the Federal Territory mosque. Situated not far from these are the gates of Istana Negara. The establishment of these landmarks in Dutamas has attracted government servants and professionals to work and live here.

Another notable landmark is Solaris Dutamas and Publika mall, developed by Sunrise Bhd (as it then was) along Jalan Dutamas 1. Not only has the eclectic mixed-use development attracted more than 250 premium retailers to the Dutamas area, it has also drawn more upper class patrons and expatriates. Noted for its wide selection of wine and dine bistros and art galleries, the retail mall has made the once-quiet neighbourhood into a trendy address.

Dutamas predominantly features mainly mid to high-end, high-rise residential properties. At the higher-end of the mix are Solaris Dutamas, Royal Regent, Hartamas Regency, Hartamas Regency 2, Anggun Puri and Changkat View (see Chart 2). Based on average price psf in 3Q2014, their prices range from RM490 to RM902 psf, according to data collated by theedgeproperty.com. The least-expensive mid-end condominiums include Antah Tower, Menara Duta 1, Menara Duta 2, Duta Ria and Prima Duta, aptly priced from RM314 to RM359 psf. 

Part of the attraction of Dutamas is its strategic location. With a network of connecting highways such as NKVE, Duke, Sprint and Penchala Link, Dutamas is virtually at the doorstep of Kuala Lumpur city centre and Petaling Jaya.

Its amenities are many. Besides the government offices and the mall, there are several schools nearby, including SMK Kiaramas, Sekolah Kebangsaan Kiaramas, and three international schools — Mont Kiara International, Garden International School and Kuala Lumpur French School. Indeed, Dutamas also benefits from the amenities and conveniences of its upmarket neighbour Mont’Kiara.

The prices of landed and non-landed homes in Dutamas have steadily increased over the years. Nonetheless, the number of transactions declined slightly recently due to the prevailing overall property market slowdown in the country.

Data from the theedgeproperty.com shows the total number of transactions of non-landed residences in the 12 months to 3Q2014 fell 23% to 328 units from 426 units previously. However, the average price psf of such residences remained stable at RM494 psf, up a marginal 0.2% from previously (see Chart 1).

Prices moderated after strongly appreciating in preceding years. Average price psf was up 16% in 3Q2013, from RM425 psf previously.

 As with the decline in transactions, the price trend in Dutamas is a result of the overall property market slowdown, says managing director of Landserve Sdn Bhd, Chen King Hoaw. “Due to the cooling measures introduced by the government in 2013, the oil price fall, the depreciating ringgit and the introduction of the Goods and Services Tax, property prices in general have been moderating.”

He expects transactions to remain subdued for some time but says Dutamas has an overall appeal and potential to become a prime residential address in Kuala Lumpur.

Strong mid-market segment

While Dutamas offers a number of high-end, high rise residences, notably the recent Solaris Dutamas serviced residences, the mid-end market is the stronger residential segment in the area.

Analysis by theedgeproperty.com for the 12 months leading to 3Q2014 shows that the market in Dutamas has plenty of options in the mid-market segment of non-landed residential properties. The most popular are those in the RM500,001-RM600,000 price range, accounting for 30.2% of market share during the period. The RM400,001-RM500,000 range is the second-largest by market share, at 22%.

Real Estate Finders (MY) Sdn Bhd team manager Raphael Wong, who is familiar with the property market in Dutamas, says the area is attractive to first-time homebuyers.

“In my experience, most buyers in Dutamas are first-time homebuyers, young family types, with a budget of between RM400,000 and RM700,000.”

Wong believes homebuyers in Dutamas are mostly owner-occupiers. “The boundaries of Dutamas extend to the borders of Segambut. If you take into account properties such as Changkat View [and] Prima Duta along Jalan Dutamas Raya in the deeper part of Segambut, a majority of the buyers are owner-occupiers.

However, some developments on Jalan Dutamas 1, such as Solaris Dutamas, have a 50% tenancy rate. This is because they are much closer to Mont’Kiara, which evidently offers higher rental returns. “Publika is also a key factor in this trend, with its integrated offices and retailers drawing more investors and tenants from neighbouring areas,” says Wong.

Despite the poor overall market sentiment, non-landed residential property values and rental yields in Dutamas have remained steady overall.

Kiara Realty principal Lee Meng Tuck notes that Dutamas offers consistent yields of between 4% and 6%. “The average ROI (return on investment) for condominiums in Dutamas is around 4.3%, while those for the retail and office segments are 5.7% and 4.4%, respectively.”

Based on rental listings as at February, 2015, theedgeproperty.com found that the highest indicative asking rental yields can be found at Hartamas Regency and Hartamas Regency 2, at 6.1% and 5.7%, respectively (see Chart 3). The family-sized units are able to fetch slightly higher-than-average rental rates due to their proximity to the international schools in the area.

However, Lee notes a few challenges to the growth of the Dutamas area. “There is still an undersupply of car parks and traffic congestion is a rising concern. Overall maintenance and upgrading of infrastructure, roads and landscaping are also needed,” he adds.

Positive outlook

Still, the future remains a positive one for Dutamas. With a strong mid-market segment and more upcoming developments in the area, real estate experts believe it has the right components to contribute to the value appreciation and steady yields of properties in the area.

“The future outlook is positive for Dutamas. Its proximity to the Ministry of International Trade and Industry, Matrade and the Kuala Lumpur Courts Complex has attracted many local and foreign companies, including legal firms, to open offices here,” says Chen.

Research by theedgeproperty.com indicates that transaction activity is expected to pick up with the recent completion of Icon Residence by Mah Sing Group Bhd and new launches such as Concerto Kiara by BCB Berhad and Verdana by BRDB Developments Sdn Bhd on Jalan Dutamas Raya.

“Another prominent launch is Arte Mont Kiara by Nusmetro Group, near Solaris Dutamas. It is the first residential development in KL Metropolis,” says Chen.

Unveiled in October, 2011, KL Metropolis is a commercial business district by Naza TTDI Sdn Bhd with a gross development value of RM15 billion. It is a three-phase integrated development on 75.5 acres of prime land in Dutamas that will consist of 22 condominium towers, five hotels, two regional retail centres and a landmark tower. The Matrade centre is the first building to be redeveloped under the KL Metropolis master plan. The business district is expected to be completed in 2025.

Lee agrees that the addition of more mixed-use developments in Dutamas will likely see overall property values continue to rise, adding that it is already a self-sufficient township with steady demand.

However, Chen warns of a high possibility of an oversupply of high-end, high-rise residences in Dutamas.

In any case, projects with mass rapid transit (MRT) and light rail transit (LRT) stations in the vicinity, or with MRT and LRT access, are expected to remain in demand.

“There will be a price correction for large and less popular units, so price movements are expected to be mixed,” says Chen. A proposed MRT station at KL Metropolis is said to be part of the future MRT Line 3. However, its date of completion is not expected to be sooner than 2022, he adds.

“If the KL Metropolis, the redevelopment of government [complexes] and the added MRT and LRT connectivity are realised, these would be some of the key drivers that should boost the prices and values of properties in here,” says Chen.

This article first appeared in The Edge Property, the property pullout of The Edge Financial Daily, on June 12, 2015. Get the full pullout here and view video here.
For a quick and brief analysis of the property market in Dutamas:
PROPERTY SNAPSHOT Room to grow at Dutamas
PROPERTY SNAPSHOT What’s affordable in Dutamas?
PROPERTY SNAPSHOT What are developments priced in Dutamas?
PROPERTY SNAPSHOT What’s hot in Dutamas?