This article first appeared in City & Country, The Edge Malaysia Weekly on April 3, 2023 - April 9, 2023

The residential township of Bandar Utama, or BU for short, is located within the Petaling district of Selangor and best known for its 1 Utama Shopping Centre, the second-largest shopping mall in the country and one of the largest in the world.

BU’s favourable location with easy access to major highways, public transport such as the mass rapid transit (MRT) and plenty of amenities make it an attractive place to rent for families, says Metro Homes Realty Bhd executive director See Kok Loong.

“The mature township is a convenient and comfortable place to live. The presence of the popular Chinese school SJK(C) Puay Chai has also helped to draw interest from upper middle-class families that prioritise quality education for their children. As a result, Bandar Utama has become a desirable location for tenants who value both education and convenience,” he says.

While the residential properties — primarily the landed terraced homes and high-rise units such as the 1 Bukit Utama condominium — enjoy good demand, the percentage of units for rent is low as most of them are owner-occupied, notes See.

“The low rental yield is mainly due to the high capital value of the properties. Meanwhile, families residing in the area often prefer to keep their grown-up children nearby, which creates a strong demand for own occupancy. As a result, the percentage of rental properties in the area is less than 20% of the total housing scheme.

“[Thus], rental properties are in high demand, with most being rented out in less than two months if priced at market rate.”

According to See, terraced homes in BU are currently getting rents of RM2,200 to RM3,000 per month on average and a rental yield of 2% to 2.5%. High-rise condominiums with built-ups of 1,500 sq ft are rented out at a higher price range of RM3,000 to RM3,500 monthly, with a rental yield of 3.5% to 4%.

The most popular residential type for rent are landed terraced homes with a typical land size of 1,650 sq ft and built-up of around 2,200 sq ft, he observes. “The 

majority of tenants for these properties are middle-income families with one or two children and who work in the Damansara area. With its proximity to various amenities and schools, Bandar Utama is an attractive choice for such families. Typically, the combined income of such families is from RM15,000 per month, and the rental amount for these properties is less than 10% to 15% of their disposable income.

“The terraced houses are generally more popular also due to their location on higher ground. This initial earthwork and planning has helped ensure that the houses are free from flooding and away from the busy streets. This can be observed from the back of the terraced houses, and it is a key feature in the area.”

However, See says one of the drawbacks, particularly for the terraced houses, is the limited car parking space. “As most of the terraced houses come with four to five bedrooms, families tend to own more than two cars, resulting in limited parking space and congested inner roads. This could pose an inconvenience for residents who require easy access to and from their homes.”

It cannot be denied that the success of Bandar Utama is due to good town planning by its master developer, the See Hoy Chan group, which conceived an idea in the late 1980s to build a township to address the increasingly sophisticated expectations of the Klang Valley dwellers.

The group’s vision was realised on this 1,000-acre former oil palm plantation (formerly known as Effingham Estate) situated adjacent to Damansara Utama and Damansara Jaya in Selangor and opposite Taman Tun Dr Ismail in Kuala Lumpur, and which comprises three distinct zones — a metropolitan commercial centre, a lifestyle-oriented condominium zone and a housing zone with 12 self-contained neighbourhoods sitting on elevated land 3m above the main arterial roads.

“The developer has done a good job in terms of town planning, particularly with the commercial properties. 1 Utama, for example, is one of the largest malls in the world and one of the most successful malls in Malaysia. Bandar Utama is also a self-sufficient township with a wide range of amenities such as hotels, offices, malls and public transport. This makes it convenient for residents who do not need to travel far for their daily needs,” says See.

Having 1 Utama within the township has contributed to the strong demand for housing there, he adds. “Many workers prefer to stay nearby as it offers the convenience of being in close proximity to their workplace. As a result, the demand for rental properties in the area has increased. The shopping centre offers a wide range of amenities, such as retail outlets, restaurants and entertainment options, making it a popular destination for both residents and visitors.”

Apart from 1 Utama, amenities offered there include primary and secondary schools such as Puay Chai 2; a tertiary educational institution, namely First City University College (formerly known as KBU International College); early childhood development centres and kindergartens; a community centre; commercial complexes such as Centrepoint Bandar Utama; hotels like One World Hotel as well as golf and recreation at The Club in Bukit Utama.

In terms of road network, BU is well connected to other parts of the Klang Valley, including the Kuala Lumpur city centre, other parts of Petaling Jaya, Subang Jaya and Shah Alam. It is served by major highways such as the Damansara-Puchong Expressway (LDP) and the New Klang Valley Expressway (NKVE), as well as the MRT Bandar Utama station that runs on the MRT Kajang Line.

See’s outlook for the township is positive. “Bandar Utama’s property price and rental value is likely to appreciate in the medium to long term due to the limited availability of land for development in such a prime location.”

Most of the commercial properties in BU, including 1 Utama and Centrepoint, are owned by their respective developers (including First Nationwide Group and Bandar Utama Development Sdn Bhd), with the exception of a few such as Oasis 4 in BU 4, Oasis 11 in BU 11, and Westpoint at Lebuh Bandar Utama, notes See.

This has resulted in a relatively stable commercial rental market, he says. “The commercial rental market is in high demand and well controlled due to the limited supply of such properties and the developers’ control over the developments.

“The tenant mix is also well planned, catering for the needs of residents and visitors to the area. This is in contrast to other townships where the tenant mix can be more varied and less controlled due to the individual property owners’ preferences. As a result, the commercial rental market in Bandar Utama is relatively stable.”

Excluding developments owned by the master developer, retail lots in BU command rents of RM5 to RM7 psf, while office lots can reap rents of around RM3 psf, with a yield of about 3%.

See notes that 1 Utama is the most popular property in the area in terms of the commercial rental market. “The mall is one of the most popular due to its size, variety of tenants and location within the township. The connectivity to the mall and the availability of amenities make it an attractive location for businesses to operate.”

Sitting within the prime Damansara area, properties in Bandar Utama continue to be highly sought after, he says.

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