This article first appeared in City & Country, The Edge Malaysia Weekly on June 17, 2024 - June 23, 2024

Kota Damansara, or Section PJU5, in Petaling Jaya, Selangor, is known as a low-density residential neighbourhood dominated by landed properties such as terraced houses, semidees and bungalows. However, there are a growing number of high-rise residential developments in the area. Several of these projects — including Sunway D’Hill by Sunway PKNS Sdn Bhd, Mahogany Residences by Asian Pac Holdings Bhd (KL:ASIAPAC) and Edelweiss @ Tropicana Gardens by Tropicana Corp Bhd (KL:TROP) — will be completed over the next few years.

The three ongoing projects will contribute 2,284 units of serviced apartments and condominiums to the area over the next two years.

According to PPC International Sdn Bhd managing director Datuk Siders Sittampalam, there are a number of existing residential units available for rent so the new supply will put additional pressure on the area’s rental market.

“We are of the view that with the completion of Sunway Medical Centre Damansara in Jalan PJU 5/1 [that is slated to open this year], there may be demand for accommodation. However, [with] Kota Damansara being almost fully developed, [future development will be limited]. Therefore, the rental market in general would sustain, although we do not anticipate a rise in rents in the short to mid term,” he says.

While rents may be slightly under pressure in the near term, Kota Damansara possesses all the makings of a well-developed township. It enjoys good highway connectivity — such as the Damansara-Shah Alam Elevated Expressway (Dash), New Klang Valley Expressway (NKVE), Sprint Highway and North South Expressway (NSE) — and is well served by MRT stations (Surian MRT, Kota Damansara MRT and Kampung Selamat MRT) and public buses.

“Generally, access to the MRT has contributed tremendously to its attraction in terms of accessibility by way of public transport,” he says.

Kota Damansara boasts an abundance of amenities and facilities, including educational institutions (SK Seksyen 11 Kota Damansara, Honsbridge International School, SEGi College Kota Damansara, SEGi University and Malaysia University of Science and Technology), hospitals (Thomas Hospital Kota Damansara, Hospital Bersalin & Poliklinik Pusrawi Kota Damansara and the upcoming Sunway Medical Centre Damansara) and shopping malls (The Strand Mall, Sunway Nexis Mall, Sunway Giza Mall and Tropicana Gardens Mall). In addition, the 800-acre Kota Damansara Community Forest Reserve is a popular spot for hiking and other recreational activities.

Strategically located, Kota Damansara borders Kwasa Damansara in Shah Alam to the west, Sungai Buloh to the north, Bandar Utama and Mutiara Damansara to the east, and Ara Damansara to the south. It is also situated 5km away from Taman Tun Dr Ismail in Kuala Lumpur.

This prime location provides easy access to nearby amenities including Damansara Specialist Hospital 2, Perdana Shopping Centre, 1 Utama Shopping Centre, IPC Shopping Centre, IKEA Damansara, Kelab Golf Seri Selangor, Tropicana Golf & Country Resort, Bandar Utama Golf Course and The Club Bukit Utama.

According to Siders, Kota Damansara has commanded good rental rates over the years for both high-rise and landed residential properties. “The presence of a good network of roads and public transport, educational institutions and hospitals have all contributed to its attraction in the tenant market.”

In terms of rents, he notes that condominium units at Cascades with a built-up area of 560 sq ft had asking rents of RM1,500 to RM1,600 per month in 2015, which increased to RM1,600 to RM1,800 per month in 2023. This translates into an increase in gross yield from 4% in 2015 to 4.8% in 2023.

Units at the Palm Spring condominium with a built-up area of 915 sq ft were asking about RM1,000 to RM1,100 per month in 2015, which increased to RM1,600 to RM1,800 per month in 2023, translating into an increase in gross yield from 3% in 2015 to 4.4% to 4.8% in 2023.

Siders notes that the variance between asking rents and transacted rents is generally between 10% and 15%. See Table 1 for asking rents and price of high-rise residential units in the area.

Siders says the number of landed residential properties in Kota Damansara currently placed on the market for rent is lower than high-rise residential properties. “This may be an indicator that there are more owner/occupiers than tenants for the landed residential property segment in the area.”

As for the high-rise residential segment in the area, a balanced mix of both owner/occupiers and tenants is observed. “Due to the limited availability of vacant development land within this area, the development trend over the last few years has been trending towards high-rise development in order to maximise density. The high-rise residential development [segment] has seen a reasonable take-up for both the tenancy and owner occupier markets.

“The southwestern part of Kota Damansara, which comprises industrial properties with various businesses, has also resulted in an increase in employment opportunities and has drawn more residents to the locality, taking up the new high-rise residential properties,” he adds.

“In addition, the high-rise residential properties located close to commercial developments such as The Strand, Dataran Sunway, Sunway Giza Mall, Sunway Nexis and Tropicana Gardens as well as the Surian and Kota Damansara MRT stations have made Kota Damansara a sought-after place to live and work. The demand for residential high-rise apartments stems largely from working adults as well as students from nearby universities.”

Known as a relatively low-density landed residential neighbourhood, Kota Damansara’s population is made up to a large extent of owner-occupiers who have purchased their properties from the developer in the township’s early years, whereas the high-rise residential units are occupied by a good mix of owner-occupiers and tenants, Siders says. “The presence of SEGi College Kota Damansara, SEGi University and Malaysia University of Science and Technology (MUST) offers an attraction to the students’ tenant market.”

Kota Damansara has a number of vibrant commercial areas, one of which is Dataran Sunway. This bustling hub, situated next to Sunway Giza Mall and Sunway Nexis Mall, comprises shops, restaurants, boutique hotels and banks.

Sunway Giza Mall, opened in 2010, comprises retail, food and beverage, and entertainment outlets while Sunway Nexis Mall was launched in 2011 and is part of the larger Sunway Nexis integrated development comprising residential, retail and office suite components. The latter is connected to the Surian MRT station via a pedestrian link bridge.

Opened in 2012, The Strand offers a similar concept with shopoffices offering retail, dining, entertainment, healthcare and banking options. Additionally, it also has a shopping mall known as Encorp Strand Mall and a block of serviced apartments known as the Encorp Strand Residences.

“These interconnected commercial areas complement each other and are conveniently reachable via the road and public transport network, creating a complete neighbourhood with facilities and amenities for leisure and recreation, entertainment, living and work,” Siders says.

Based on data from PPC, transacted values for commercial strata units in the area ranged from RM500 to RM647 psf (built-ups from 1,237 to 1,711 sq ft) at Emporis and RM270 to RM310 psf (built-up: 742 sq ft) at Cova Square. As for the individual shopoffices, transacted prices last year ranged from RM2.3 million for a 3.5-storey unit with a 5,506 sq ft built-up at The Strand to RM11.3 million for a 4-storey unit with a 12,988 sq ft built-up at Dataran Sunway.

As for rent, a 3-storey shopoffice unit at Dataran Sunway with a built-up area of 4,950 sq ft and a land area of 1,650 sq ft is asking for around RM14,050 per month, which translates into a gross yield of 3.1%, whereas a slightly bigger shopoffice unit at The Strand with a built-up area of 6,900 sq ft and a land area of 1,725 sq ft is around RM16,100 per month, which translates into a gross yield of 5.1%.

“Further, the current asking rental of a 4-storey corner shopoffice unit at The Strand with a built-up of 10,188 sq ft is about RM15,800 per month and a 5,498 sq ft shopoffice unit at The Strand is asking for RM12,000 to RM13,000 per month.”

At Emporis and Cova Square, ground floor shop units with built-up areas of 1,156 to 1,450 sq ft are asking for about RM6,000 to RM10,000 per month whereas first-floor shop units at Cova Square with a built-up area of 1,324 sq ft are asking for about RM2,000 per month. See Table 2 for asking rent and price of existing commercial developments.

In terms of his outlook on the area’s property market, Siders remains optimistic. “Kota Damansara is essentially a low-density residential neighbourhood with pockets of commercial development that has been developed over the years. It is well served by good infrastructure and public transport and comprises all the amenities of a typical town such as commercial centres, shopping malls, hospitals, schools and universities, as well as a forest reserve. Being an established township development, we anticipate growth in terms of capital value and rental appreciation as well as the popularity of the area.”

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