Kota Damansara rises higher

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IN the past several years, the values of residential properties in Kota Damansara, Selangor, have more than doubled. For example, according to data on thedgeproperty.com, the smallest unit at Casa Indah 1 that sold for as low as RM187,900 during launch in 2003 is now selling at the asking price of RM700,000.

It is not only medium-cost condominiums that are increasingly popular; demand for affordable and luxury high-rises is equally strong.

The transformation and development of Kota Damansara has not happened by chance.

KGV International Property Consultants Sdn Bhd executive director Anthony Chua says that after the adjacent Taman Tun Dr Ismail (TTDI) became an affluent township in Petaling Jaya, the urban sprawl spilled into Bandar Utama and, now, Kota Damansara.

“The overall outlook for demand at Kota Damansara is positive and upbeat; demand growth is sustainable due to its location adjoining Petaling Jaya, the anticipation of a new MRT line, the development of Kwasa Damansara, and others,” Chua explains.

Construction of the Mass Rapid Transit (MRT)Sungai Buloh-Kajang Line, which started in 2011, was 64% complete as at May 31, 2015. There will be 31 stations along the 51km line, with Surian Station, PJU 5 Station and Kota Damansara Station all located in the Kota Damansara area.

Notably, Surian station will be linked to Tropicana Gardens, a mixed-use development located adjacent to it, while Sunway Nexis Soho will also be linked to the station via an MRT deck. Both mixed-use developments consist of offices and retail components.

The first phase of the MRT Sungai Buloh-Kajang Line from Sungai Buloh to Semantan is scheduled to open by the end of 2016 and the second phase from Semantan to Kajang, on July 2017.

Meanwhile, Kwasa Damansara located on former Rubber Research Institute Malaysia (RRIM) land, planned as a major transit hub located about 10km away from Surian station, will be developed by Kwasa Land Sdn Bhd, a wholly-owned subsidiary of the  Employees Provident Fund. This project will be built to cater for at least 150,000 people. It is also the first township development on the fringes of the city complete with a public transport infrastructure.

Chester Properties Sdn Bhd operations manager Jei Chew concurs. He adds that Kota Damansara’s easy accessibility from the North Klang Valley Expressway (NKVE) and its proximity to mature property hotspots such as TTDI, Bandar Utama and Mutiara Damansara, are also points in its favour.

There are four main routes that connect to Kota Damansara, including Persiaran Surian, Persiaran Damansara Indah, Jalan Sungai Buloh and NKVE.

In fact, there are hundreds of thousands of vehicles flowing into Kota Damansara daily. While this generates business opportunities, it is also a cause of serious chronic congestion, especially on Persiaran Surian.

However, this has not affected Kota Damansara’s popularity, due to the many who want to live and work here, given that is now a hub for business, education and entertainment.

CBD Properties (KD) Sdn Bhd executive director Daphne Chan says investors and homebuyers are looking for non-landed properties in Kota Damansara, especially condominiums priced below RM500 psf.

“Most investors are homeowners in this area or from neighbouring townships who see growth potential in this area and want to invest for both rental yield and capital appreciation,” says Chan.

According to data provided by KGV International, condominiums priced below RM500 psf include Palm Spring, Cova Villa and D’Rimba.

Self-sufficiency

Kota Damansara can be considered a self-sufficient township, says Chew, with Dataran Sunway as its nucleus. Dataran Sunway, the commercial centre, comprises plenty of retail shops, shop offices, and eateries. Next to Dataran Sunway is the recently completed Sunway Nexis, a mixed-use development consisting of office, retail and soho units.

Within 2km of Dataran Sunway are two hypermarkets, Aeon Big and Giant, as well as a neighbourhood shopping mall, Sunway Giza, a popular happy hours hangout.

About 3km to 5km from Dataran Sunway is Sunsuria Technology Centre, a factory estate for small businesses.

Kota Damansara also has several government schools, a smart school, a university and a medical facility, Tropicana Medical Centre. There is also a recreational park and a golf club.

“With so many amenities nearby, Kota Damansara has attracted young families and the working class, resulting in higher demand for its residential properties , as well as escalating prices,” says Chew.

Over the past few years, house prices in Kota Damansara have increased at a fast pace. According to research by theedgeproperty.com, the average price psf for non-landed residential properties transacted in Kota Damansara rose an exceptional 44.4% year-on-year, from RM356 to RM514 psf in the third quarter of last year (3Q2014).

According to theedgeproperty.com, the more expensive developments are mostly clustered along Persiaran Surian, near amenities such as Dataran Sunway, SEGi University, Tropicana Medical Centre, the Seri Selangor Golf Course and the upcoming Surian MRT station.

For investors or homebuyers looking to purchase non-landed properties here, Chua said they should consider developments with security features, and easy access to main roads, and future MRT stations.

Education hub

Besides Dataran Sunway, another hotspot is the SEGi University area, where the Sri KDU smart school is just a stone’s throw away.

The 10-acre SEGi University is located at Jalan Teknologi, Kota Damansara, next to Tropicana Medical Centre. The full-fledged campus has research facilities and an outdoor swimming pool, providing a conducive learning environment for up to 12,000 students.

Sri KDU is a private co-educational smart school offering the Malaysian curriculum at primary and secondary levels. Since its opening in 2003, the 12-acre school’s annual enrolment has grown from 528 students to more than 2,300 today.

Chan says the average rental yield of non-landed properties in Kota Damansara is about 4%, and that properties within walking distance of SEGi University fetch higher rental yields. “Cova Villa and Cova Suites are still the most popular condominiums for students, being close to the college.”

Chua adds that Cova Villa has enjoyed high occupancy rates due to its proximity to a college and a medical centre. KGV International data shows that the current rental for Cova Villa ranges from RM1.60 psf to RM1.75 psf, while rental yield is about 4.6%.

The MRT catalyst

The development of the Klang Valley/Greater KL MRT project initiated in 2011 has become a major catalyst for the property market, including Kota Damansara.

According to Chan, since MRT construction started in the area, high-rise residential properties in Kota Damansara have become sought after by professionals who hope to commute by public transport to work.

The Surian MRT station will be located opposite Dataran Sunway; the nearest condominiums to the station are Casa Indah 1 & 2, Sunway Nexis, Tropicana Gardens, I-Residence and Cascades Residences.

A look at the properties close to the Kota Damansara MRT station on theedgeproperty.com shows that prices during the MRT construction period were significantly higher compared with during the pre-construction period.

For example, Casa Indah 1, which was completed in June 2006, was launched at a price of just RM180 psf. Based on KGV International data, as at 2Q2015, after construction of the MRT project began, the selling price had increased to RM600 psf, a jump of 233%.

Cascades Residences by Mitraland Bhd, completed in 2014, has set a new price benchmark for the area. Chua says the highest transaction price for Cascades Residences over 12 months was RM930 psf.

At I-Residence, another condominium project completed around the same period and located just 2km away from Cascades Residences, the highest transaction price in the past 12 months was RM620 psf.

While some may argue that the strong demand is only applicable to mid-market high rises, the overwhelming response to Tropicana Gardens, a joint-venture between Dijaya Corp and PKNS, has shown otherwise.

The first two residential towers of Tropicana Gardens, Arnica and Bayberry, launched in October 2012 and March 2013 respectively, received overwhelming response from buyers. All 336 units of Arnica tower are sold out, and the 413 units of Bayberry tower are 98% sold. The average selling prices for Arnica and Bayberry serviced residences are RM850 psf and RM1,000 psf, respectively. The upcoming third tower, Cyperus, which will have 406 units of serviced residences, is expected to continue the sales momentum with an average selling price of RM1,267 psf.

“New launches like Nexis Soho, and Cyperus are already breaching RM1,000 psf, but still selling like hot cakes. Even the prices of older condominiums located near MRT stations are climbing up and closing the price gap on newer projects,” Chan adds.

Real estate agents admit that transactions have slowed since early last year. Chua says the transaction volume has decreased mainly due to the overall weak market sentiment and pessimistic economic outlook. “However, owners are not forced to sell as most of the existing properties are owner-occupied,” he says.

He expects the price growth of non-landed properties to be flattish in the short term as transactions remain bearish. He expects the redevelopment of the RRIM land into Kwasa Damansara to be the next catalyst for price growth. “It will be a game changer for the locality. New price benchmarks will likely be set and these may result in overall price appreciation.”

Although most real estate agents cannot agree on how much the value of Kota Damansara properties will appreciate over the medium and long term, they can agree on one thing — that Kota Damansara is like a teenager, with all the qualities and potential to shine brighter, and that the township still has room for growth.

This article first appeared in property+, a section of the digitaledge Daily, on Aug 14, 2015. Get the full property+ here and view the video here.

For a quick and brief analysis of the property market in Kota Damansara:
PROPERTY SNAPSHOT 1: Kota Damansara, a thriving hotspot
PROPERTY SNAPSHOT 2: What’s affordable in Kota Damansara?
PROPERTY SNAPSHOT 3: What are developments priced in Kota Damansara?
PROPERTY SNAPSHOT 4: What’s hot in Kota Damansara?