In January, Prime Minister Datuk Seri Najib Razak had announced Damansara City
The project’s estimated gross development value is between RM2 billion and RM2.5 billion and will include luxury condominiums, a retail centre and office buildings.
Prices have not been firmed up yet, but the real estate arm of the Hong Leong Group aims to launch the project in the third quarter (3Q) of this year. It is currently fielding enquiries from prospective buyers.
Meanwhile, the new MRT line and the RM7 billion LRT extension, will have their stations located close to the mixed development, if not within the mixed development. It is worth noting that the Bangsar LRT station in front of Menara UOA is about 4km away by car.
GuocoLand’s development is expected to set new benchmark prices — estimated at RM1,000 psf for the condominiums — while the MRT and LRT lines are music to the ears of property owners as they may boost the value of their properties by as much as 25%, according to cartographer Ho Chin Soon, who cited online reports on properties in countries with similar infrastructure.
Further inside Damansara Heights’ residential enclave, Eastern & Oriental Bhd (E&O) is taking enquiries and registering interest for The Peak — 10 bungalow plots on a 3.9 acre site.
“It is among the last and most coveted pieces of land remaining in upscale
The main selling points of these lots are their location and views — at the highest point of Bukit Damansara in Jalan Teruntung, they overlook the new RM800 million, 241-acre Istana Negara in Jalan Duta.
Chan says via e-mail that the company is mulling over a partial release of the plots to buyers instead of a sales launch.
Meanwhile, I&P Group Sdn Bhd’s Seri Beringin project fronting Jalan Beringin and Jalan Setiabistari on Bukit Damansara, is asking for RM520 to RM660 psf for its latest phase of bungalow lots. Land areas in the gated and guarded scheme range from 9,052 to 10,785 sq ft.
Launched in 2005, the 42-acre, RM500 million development comprises 54 units of 2-storey semi-detached houses, seven villas and 74 bungalow lots.
According to an I&P official, previous phases were sold on a tender basis with bids averaging over RM500 psf.
However, when consultants and valuers talk about the growth of values in Damansara Heights, major upcoming developments such as Damansara City, MRT lines and LRT stations do not seem to be viewed as major drivers of growth unlike in other neighbourhoods.
A group of residents have written to the papers to ask for the MRT line to be built underground because of concerns about noise pollution, traffic congestion and vibration through existing buildings and structures.
Some real estate agents and valuers have argued that Damansara Heights
A quick tour around the blue-ribbon neighbourhood sees a number of vacant parcels, typically fenced-up, neatly manicured and often located between other bungalows.
Conspicuously missing are the “for sale” signs — a sign that these plots are not on the market, Fernstate Sdn Bhd senior manager Shawn Fernandez tells City & Country during a tour of the neighbourhood.
He says these plots are family heirlooms, purchased decades ago for investment purposes.
He cites a client in Jalan Batai Barat who had purchased the land, upon which her bungalow sits for RM8 psf in the 1970s. She got the shock of her life not too long ago after finding out that she would have to fork out RM550 psf for the adjacent parcel. Their investments would have paid off in spades, Fernandez adds.
In Seri Beringin, he points out that most of the prime bungalow plots — the higher, level ones overlooking Kuala Lumpur
Overall in Damansara Heights, asking prices range from as low as RM350 psf for less strategically-located parcels in older parts that slope and do not offer the best views, to RM700 psf for flat parcels in the newer parts that overlook the Kuala Lumpur skyline, say most consultants and agents.
In March, there was a call for tenders for a land parcel in Jalan Setiabakti 6, measuring about 6,900 sq ft with a reserve price of RM780 psf. Does it mark a fresh high in asking prices? And what are the factors driving these prices up?
Testing the waters
Fernandez is not surprised at the reserve price as owners routinely test the waters with asking prices at 5% above the going rate in the neighbourhood although regularly-transacted prices are usually 10% below the asking prices.
He explains that due to the profile of residents there — influential, high net-worth individuals who, more often than not, sport titles — negotiations are tougher as the sellers are often not hard up for cash.
During the 2008 global financial crisis, he recounts only three fire sales in the neighbourhood. The rest of the vendors quietly withdrew their properties from the market as they “had nothing to lose” from holding on to their properties until the economic climate recovered.
Given the nature of how transactions are conducted there, prices can only climb upwards as a result, he adds.
Kim Realty Sdn Bhd co-founder and CEO Vincent Ng is handling the sale by tender of the Jalan Setiabakti 6 parcel, which he describes as elevated and slightly sloping towards the back.
Flanked by bungalows, it would be well-suited for a bungalow or two semi-detached houses.
Apart from the city centre’s skyscrapers and Jalan Duta, the parcel also has views of Pusat Bandar Damansara.
Ng has received between six and nine bids for the parcel. However, he is unperturbed by the lukewarm response.
He recalls that a parcel of land measuring about 6,900 sq ft was transacted at RM600 psf some time ago while an old bungalow with a land area just under 13,000 sq ft in Jalan Setiakasih has an asking price of RM13 million.
He notes that prices ranged from RM400 to RM500 psf three years ago and dipped during the global financial crisis before rebounding to the current asking prices.
“However, all I can say is we are taking this on — we are confident that it will eventually be sold at RM800 psf,” he says, adding that he expects to sell at that price before the end of the year, barring unforeseen circumstances.
Meanwhile, Eugene Liew, a senior real estate negotiator with Jalin Realty International, says the benchmark price for Damansara Heights
The land area of the houses, which are likely older than 10 years, are 7,500 sq ft each and they were transacted at RM7.5 million per unit, which works out to RM1,000 psf, he tells City & Country.
“As far as I know, there are a few small parcels such as a one-acre tract at a valley near Prima Damansara and Chempenai Parc condominiums of potential development land but I am not sure when they will be developed. There is also a condominium development in Jalan Batai by Selangor Properties Bhd, a small parcel of land in Jalan Setiakasih and a medium-size parcel of land on the peak of Jalan Teruntung
“There are over 2,000 bungalows and semi-detached houses in Damansara Heights
Liew has observed a steep increase in prices of semi-detached homes over the past two years — for instance, a 4,000 sq ft basic unit could command between RM2.5 million and RM2.6 million then, but asking prices have since risen to between RM2.8 million and over RM3 million.
On the other hand, bungalow prices showed little growth in the aftermath of the 2008 economic crisis although there had been an uptick in certain areas last year, he says.
KGV-Lambert Smith Hampton (M) Sdn Bhd director Anthony Chua says the average price of residential land in Damansara Heights
“However, the highest recorded transaction that I know of last year was for a piece of residential land in Jalan Setiakasih 6 (measuring 9,160 sq ft) which was sold for RM850 per sq ft [in October],” he tells City & Country.
He notes that despite rising prices of properties in the area, sales for properties priced above RM3 million had fallen to 55 in 2010 from 70 in 2008.
“This is possibly because current asking prices are being viewed as too high and as buyers are more selective, they are looking at other locations slightly further away which are comparatively cheaper,” he opines.
Where developers fear to tread
Fernandez counts Deputy Prime Minister Tan Sri Muhyiddin Yassin and Kuala Kangsar member of parliament Tan Sri Rafidah Aziz as some of the area’s more prominent residents. Others include Parti Keadilan Rakyat supreme council member and former Health Minister Datuk Chua Jui Meng and Selangor Menteri Besar Tan Sri Khalid Ibrahim.
He shares an incident where a real estate developer had tried to get a mixed-use development off the ground. About 15 residents held a meeting and, in the evening, the resident’s personal assistant delivered a letter to Kuala Lumpur City Hall
The mixed-use project was effectively stopped. The project which would have blocked the view of the Kuala Lumpur
But to fully appreciate their objections to major developments, one has to go back in time to the origins of Damansara Heights
The original urban plans called for plenty of recreational areas and the Plaza Damansara site had once been earmarked for a field, according to the original master plans from over 40 years ago.
Meanwhile, a site in Jalan Setiabistari earmarked for a low-rise condominium development was developed into what is now Seri Beringin.
Simply put, the residents wish to keep Damansara Heights
One of the last tracts of land large enough for major developments is a 3.4-acre site currently occupied by Villamaria Good Shepherd Kindergarten and Nursery in Lorong Setiabistari 2, Medan Damansara.
Growing at an indeterminate pace
Most real estate agents and valuers surmise that it is possible for vacant residential land in the area to hit RM1,000 psf. It is largely a question of when.
Fernandez is confident that prices will hit RM1,000 psf when E&O manages to sell the priciest tract at The Peak.
He also notes that the upcoming
“Once GuocoLand starts locking in the prices of built-up areas, it won’t be long before owners start asking why their own houses, condominiums, and so on, can’t command such values,” he says.
“Perhaps they lack of infrastructure like that of the Damansara city centre, but why not RM800 psf for their built-up areas? Add in the land cost, and you can begin to imagine where prices will go.
“That is a rather simplistic view, but one likely to be taken by some owners, nonetheless,” he says.
Jalin’s Liew is very bullish on the prospects of Damansara Heights, saying land values are poised to continue their upward trend as long as “new wealth is being created among the people” given the scarcity of residential land.
“It has been and will always be the most sought-after location due to its central location and accessibility. It is one of the lowest-density neighbourhoods close to Kuala Lumpur and Petaling Jaya with affluent neighbours, good infrastructure and good security,” he says.
Potential downers include the tremendously higher resident density through the development of huge high-rises by big parcel owners, more traffic congestion, tighter home loan controls, imposition of higher downpayment with lower margin of financing, says Liew.
Liew opines that if there is traffic congestion around
“However if Damansara City is very well planned, there may even be a higher upside to prices in Damansara Heights due to added conveniences, being an entertainment and central business hub,” he adds.
Chua observes that the prices of residential land in
“The possibility of residential land prices touching RM1,000 psf in the not-too-distant future is a possibility considering the insatiable appetite for landed properties in prime locations,” he says.
Meanwhile, Kim Realty’s Ng is also optimistic about the prospects of
“If KLCC can go up to over RM2,000 psf, then
He too is of the opinion that prices will continue to climb purely because of the lack of supply of vacant land.
However, C H Williams Talhar & Wong managing director Foo Gee Jen is more cautiously optimistic.
He feels the potential upside for prices of residential properties is limited as they are fast gaining on prices of commercial property.
He notes that apart from its fundamentals, there is little to drive prices up further as it is a mature area with precious little development apart from
By Lam Jian Wyn of The Edge Malaysia
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 856, May 2-8, 2011
