Since its launch, Mutiara Damansara, which means “the pearl of Damansara” in English, has been well received by the public due to the many amenities in the commune. It has almost everything one could want, be it retail therapy, groceries, fitness, food or entertainment. In reality, The edge has made it his home for 12 years.
The 355-acre freehold township was once part of Bukit Kual Estate, an oil palm and rubber plantation owned by the See Hoy Chan group before the land was purchased by the government for use as a military camp. The land then became the property of Lembaga Tabung Angkatan Tentera (LTAT) and was later developed by Boustead Properties Bhd, the real estate arm of Boustead Holdings Bhd which in turn is the investment arm of LTAT.
Metro Homes Realty Bhd Executive Director See Kok Loong said Mutiara Damansara comprises a 300-acre residential component and a 55-acre commercial component.
The commercial component comprises 60% retail businesses and 40% corporate offices. The shopping district includes The Curve Shopping Centre, Lotus’ Mutiara Damansara and IPC Shopping Center (whose main tenant is IKEA Damansara). There are also 2-storey offices and low-cost stores in the residential area.
“Boustead Properties began to develop the residential component by building townhouses, then semi-detached lots and bungalows, and bungalows. These are called Mutiara Homes. On the commercial side, Boustead sold the commercial land before building the malls and some of the company buildings,” says See. City Country.
There are also three high-rise projects in the township, namely Surian Condominiums and Surian Residences Condominium by Boustead Properties and Reflection Residences by Glomac Group.
Tiffany Goh, Country Manager of IVPS Real Estate Sdn Bhd (a member of the global Cushman & Wakefield alliance), says high rise projects are not high density and have a good occupancy rate of over 90% .
“The rental market has held up well even before Covid-19, as the tenant pool is mostly made up of employees of multinational corporations (MNCs) and small Malaysian businesses,” she says.
“There are also retirees [living in the township] because of its amenities. The region has a complete offer with shopping centers, hotels and access to the MRT. Moreover, it is accessible to [many highways] …it is largely an owner-occupied township. Tenants prefer to live in the Mont’Kiara/Hartamas area because rents are more competitive and there are more international schools.
See hasn’t seen many changes during the pandemic, and many homes have not been vacated.
“Tenants are primarily families who prefer Damansara’s location, which is close to amenities such as The Curve and 1Utama Mall, yet easily accessible to town via the Penchala Link. They are a mix of locals and expats, who are looking for land properties. The profile of tenants hasn’t changed much over the years,” he says.
See adds that the asking rent ranges from RM11,000 to RM15,000 for bungalows; RM6,000 to RM7,000 for semi-detached houses; and RM2,600 to RM4,000 for terraced houses. As for high-rise buildings, the asking rate is RM2 to RM2.20 psf at Reflection Residences (1,092 to 1,300 square feet); RM2 to RM2.40 psf at Surian Residences Condominium (1,700 to 2,200 sq ft) and RM1.90 to RM2.05 psf at Surian Condominiums (1,200 to 1,350 sq ft).
The 2-storey offices are not in visible locations, so the asking rent for these and low-cost stores in Mutiara Damansara is RM2,500 to RM3,000 for ground floor units; and RM1,000 to RM1,200 for first-floor units, See says. As for offices, the asking rent is RM5.80 psf at Nucleus Tower; RM5 psf at the KYM tower; RM4.50 psf at Menara TSR; RM5 psf at Menara UAC and RM5 psf at Surian Tower.
Goh observes that the current average occupancy rate for these office towers is between 60% and 85%, with an average gross rental rate of RM4.80 to RM6.50 psf per month (see table).
“Like any prime location, there has been a slight drop in rents for the residential and commercial components in 2020. However, the drop has not been drastic as there is no oversupply of residential units in Mutiara Damansara. On a percentage basis, residential unit rents only saw a reduction of around 10% in 1H2021 to register an average of RM2.20 to RM2.60 psf per month (see table),” she says.
“For the office market, the completion of the MRT definitely strengthens the commercial quality of the area. The Nucleus Tower, which was completed in 2018, saw good occupancy before Covid-19 and continues to attract tenants as it is one of the newest buildings in the area. However, demand has been lower during the pandemic and the completion of new office towers is creating more competition for Mutiara Damansara office towers.
Stable rental market
Future demand for residential properties in Mutiara Damansara remains intact, See believes. But he expects a minor adjustment in commercial property rents, around 10% below the 2019 rate.
“Major renovations are needed to attract new tenants and retain existing ones. The new normal of working from home will reduce the space needed for businesses. The office space oversupply situation is another challenge for office building owners,” he adds.
Goh agrees, noting that the rental market for residential properties in Mutiara Damansara is stable as there is not much supply available. As for the office market, potential tenants will compare those of Mutiara Damansara with those of Bandar Utama and Damansara Utama.
“We do not expect asking rents to drop significantly even if there is competition since the available supply is manageable. [compared with demand]. The Petaling Jaya/Damansara area supports the profile of tenants, where businesses have not been directly affected by the pandemic,” she says.