What's the draw at Uptown?

Damansara Uptown in SS21 may just make up a small portion of the mature Damansara Utama suburb in Petaling Jaya, Selangor, but it is a thriving commercial hub serving the population of 142,000 in the township, as well as surrounding denizens.

To the west of the popular commercial hub lies Damansara Utama’s main housing enclave. Uptown is flanked on the east by SS20 (known as Damansara Kim) which primarily comprises residential homes. In the middle is the Damansara–Puchong Expressway or LDP, a high-traffic six-lane expressway.

Damansara Uptown was developed in the early 1980s by See Hoy Chan Sdn Bhd Group. Among the initial developments were Uptown 1, Uptown 2, Uptown 3 and Uptown 5 office buildings. Some notable tenants of the premises include multinationals, fast-moving consumer goods and pharmaceutical companies like Walt Disney, Mars Food, Sony, Aspen Medical Products and Lafarge Malaysia.

Meanwhile, over 300 shoplots are located along Jalan SS21/35, Jalan SS21/37, SS21/58, SS21/39, SS21/60 and SS21/1a. They house offices, banks and food outlets including some popular eateries such as Village Park Restaurant (famous for its nasi lemak), Fat Spoon, Burger-Mbira and Annie 1. The area attracts throngs of foodies, day and night.

According to JLL Malaysia country head Y Y Lau, the most prominent shop offices are along SS21/35 and SS21/37, which front the LDP and the Starling mall, respectively. The high traffic on the only road that leads to the entrance of the Starling provides good visibility to these units.

The second most prominent rows are the shoplots located along Jalan SS21/62 and SS21/56b, which enjoy good frontage from the Sprint Highway, except for some parts blocked by the overhead bridge.

“Jalan SS21/39 and SS21/58 are also busy with a significant mix of mainly eateries, banks, convenience stores, boutiques and a few clinics. These are important as they support the residential neighbourhood of Damansara Utama,” Lau tells EdgeProp.my, likening Damansara Uptown to Taipan USJ, the central business district of Subang Jaya.

Retaining its appeal

For Ridgewell Properties Sdn Bhd founder and real estate agent Kenneth Huee, whose office is located along Jalan SS21/62, the shops facing the Starling mall are quite prime as many like to park in the mall and walk to the shops.

The Starling mall is one of the latest additions to Damansara Uptown with a net lettable area of about 450,000 sq ft — along with a serviced residence managed by The Ascott Ltd known as the Somerset Damansara Uptown and the upcoming UPtown 8, which is a 38-storey MSC-status, green, grade A office building.

The Starling mall, developed by See Hoy Chan Sdn Bhd, opened three years ago and boasts a 50,000 sq ft landscaped rooftop park and a 27,500 sq ft ground level park. It has introduced 3,333 parking bays which has alleviated the traffic headaches of patrons to Damansara Uptown, says Lau.

Traffic dispersal is faster too, after the abolition of all parking lots previously situated in the middle of the road, to allow for three-lane and two-lane traffic coming from OCBC Bank, Jalan 21/1, Jalan 21/2 and turning onto Sprint Highway.

Lau notes that after the development of Starling Mall, the road system has also been improved. Previously, the area did not have sufficient parking, leading to rampant double-parking in the commercial area.

“Stagnant traffic in Damansara Uptown is now a thing of the past. This traffic improvement is likely to have a positive impact on the property prices in this area,” Lau suggests.

The tenants in the shoplots, she adds, have benefited not just from the available parking, but the spillover of visitors to the mall, particularly shops that sell products and services not available in the mall like banking, clinics and specialised restaurants.

“They gain from the improved parking facilities and the shopper traffic of the Starling.” However, other shops such as eateries and boutiques could have seen less shoppers with competition from the mall.

Huee concurs that traffic has improved significantly with the addition of new car parks. He also observes a decrease in footfall to the F&B operators at the shoplots since Starling Mall opened.

“The shoplots’ businesses have actually dropped significantly because people prefer to eat inside the mall during lunch as it is hot to walk outside,” says Huee.

Besides improving the traffic dispersal system in Uptown, in recent years, the developer of
Uptown has upgraded the streetscape and overall environment of the commercial hub with lush landscaping, walkways and pocket gardens.

Decades on, the place looks as good as new, thanks to the developer’s efforts in maintaining and raising its appeal. In fact, Damansara
Uptown was a Gold award recipient of the EdgeProp-ILAM Malaysia’s Sustainable Landscape Award 2018 at the EdgeProp Malaysia’s Best Managed Property Awards 2018.

Lau says Damansara Uptown has been injected with modern and new developments which has attracted more affluent residents to move into the neighbourhood. The increasing population has improved the spending power of the surrounding catchment.

Furthermore, nearly every amenity, product and service within walking range has helped to increase the variety of retail offerings to customers. Lau draws parallels between Damansara Uptown and other commercial areas, such as SS22 in Damansara Jaya.

The Starling has provided car parks to Damansara Utama, just as Atria Shopping Gallery has in SS22, says Lau.

“But an added advantage Damansara Uptown has over SS22 is that the shoplots are definitely more visible from the major highways, whereas SS22 lies deeper in a residential area. Overall, Damansara Uptown shoplots have significant advantages over the other neighbouring precincts in terms of access and visibility,” she notes.

Damansara Uptown is easily accessible via major highways such as the LDP and Sprint. There are even free shuttle buses to and from the Starling Mall South Entrance to Kelana Jaya LRT station and TTDI MRT station.

However, she points out that should the popularity of the place increases, the commercial area may still be a little narrow, and the congestion fed by the residential areas located around it may build up. “Traffic feeds in from high-volume highways along Sprint to Bandar Utama and LDP and goes into a relatively place,” says Lau.

Values stable

According to data from EdgeProp.my, the latest sale transaction in Damansara Uptown was in May last year — a four-storey shoplot with a built-up of 5,210 sq ft, transacted at RM1,040 psf (RM 5.42 million), which is the highest price psf in the period from 2011-2017.

The shoplot is located along Jalan SS21/58. Prior to this, two shoplots on this street were sold at RM720 psf (RM3.75 million) each in 2011.

Meanwhile, Jalan SS21/39 saw 14 transactions over the past seven years with one of the shoplots being sold for as high as RM979 psf (RM5.1 million) in January 2015. Shop units along Jalan SS21/37 saw five transactions with the last transaction in December 2013 achieving RM933 psf (RM5.35 million).

Most of the shoplots in Damansara Uptown are four storeys high and have land areas ranging from 1,539 sq ft to 1,722 sq ft. The built-ups range from 3,100 sq ft to 5,694 sq ft. The highest number of transactions was recorded in 2013, with nine transactions ranging from RM501 psf to RM933 psf.

JLL’s Lau notes that the current property market slowdown is also reflected in the fact that there were no transactions in Damansara Uptown since May 2017. Nevertheless, the shops appear to be fully occupied and the eateries seem to be doing well, she says.

Strong rental market

Huee notes that sales have generally declined, due to the lower margin of bank loan approvals given. But he believes that the rental market in Uptown is still going strong with an estimated occupancy rate of over 80%.

“The developer’s family owns a number of units in Damansara Uptown. They are actually asking a bit of a premium for the rental of their units due to the good upkeep of their units. Generally, shoplots here have always commanded premium rental compared to other commercial areas in Selangor. Even our office located on a corner walk-up unit on the third floor is charged almost RM3,000 per month,” Huee reveals.

EdgeProp.my observes that the average asking rental hovers around RM4.18 psf. Meanwhile, Lau also points out that ground floor shoplots along Jalan SS21/60 and Jalan SS21/62 appear to command higher gross asking rental compared to those along Jalan SS21/35.

“The landlords may feel there are fewer units facing the Sprint Highway compared to the LDP Highway, and sellers expect the same absolute rentals of RM9,000 per month as SS21/35 despite the smaller intermediate size,” Lau explains.

Outlook

Lau says it appears there is little appreciation in the prices of shoplots since 2013, in line with the down market cycle as evident from the smaller number of transactions and relatively stagnant prices. Nevertheless, some signs of early bottoming can be seen in the positive 5.9% y-o-y rise in value in 1H17.

“We think that this is a good opportunity to invest in the shoplots before the next cyclical upturn. If the Starling, the office and residential components continue to be well managed and show price appreciation, the shoplots are likely to appreciate in value over time as the commercial area and the shoplots have good visibility, branding experience and a desirable location,” Lau opines.

However, the prices of the shoplots in Damansara Uptown are not likely to increase much, because retail is served by four malls within a 2km radius from Damansara Utama – 3 Damansara Shopping Mall, Atria Shopping Gallery, the Starling and GLO Damansara.

“This cluster of retail spaces in the same neighbourhood may lead to dispersion in footfalls, given that customers are spoilt for choice,” says Lau.

There are also other competing commercial areas like SS2, SS20 and SS22 that provide a wide range of eateries, shopping and lifestyle experiences. With the strong competition, the prospect of rental reversion growth in these suburban submarkets remain minimal as average occupancy rates have yet to show improvement on a y-o-y basis.

In the longer term, as the city centre expands the geographical boundaries of the business district, Damansara Uptown is definitely a good location for commercial and residential property given its location just outside the fringes of Kuala Lumpur.

“The residential property will enjoy the availability of jobs and the convenience of supporting amenities and eateries, while the commercial area will continue to enjoy high visibility from the heavy traffic that traverses the main roads, as well as the LDP and Sprint highway,” says Lau.

This story first appeared in the EdgeProp.my pullout on Oct 5, 2018. You can access back issues here.