Cover Story: Industrial USJ 1 undergoes a mini facelift

This article first appeared in City & Country, The Edge Malaysia Weekly, on July 30, 2018 - August 05, 2018.

Chua: The target market of the handful of new developments in USJ 1 is young families. The area is good for those looking to upgrade to new homes with better security and facilities. It is also ideal for those looking to downsize to apartments to spend their retirement years.

Toh: The demand for commercial properties in USJ 1 is picking up slowly, especially with the opening of two new access roads to the Kesas highway

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Flanked by two highways, namely Lebuhraya Shah Alam (Kesas) and Lebuhraya Damansara-Puchong (LDP), USJ 1 in Subang Jaya appears to be busier as it undergoes a transformation. Crowds can be seen thronging the two glass-and-steel-clad shopping centres in the area on weekends.
One of them is the newly renovated Summit USJ. Built in 1998, the freehold, mixed-use development is one of the oldest landmarks in Subang Jaya.
Following a RM70.48 million upgrade in 2016, the shopping centre now boasts a contemporary look with brightly coloured installations adorning the façade.
Summit USJ, which comprises a six-level retail podium, 13-storey office tower, 17-storey hotel and car park, has a gross floor area of 1.2 million sq ft. The shopping centre has 284 retailers.

Next to it is Da Men Mall, a shopping centre that houses many restaurants and retail outlets. It was an abandoned project before Pavilion REIT Management Sdn Bhd acquired it from Equine Park Country Resort Sdn Bhd and Revenue Concept Sdn Bhd for RM488 million in 2015.

The freehold, mixed-use development, which comprises a five-level retail podium, two-level basement car park with 1,672 bays and two apartment blocks with 480 units, has a net lettable area of 420,920 sq ft. Da Men Mall has 103 retailers.

Meanwhile, the Kelana Jaya light rail transit line extension was completed last year. The stations added to the line include SS15, SS18, Taipan as well as USJ 7, which serves commuters in USJ 1.

With all this going on, activities in the once quiet USJ 1 are gradually picking up. “Property demand in USJ 1 has been firm,” says KGV International Property Consultants director Anthony Chua.

“Developments in the area were predominantly industrial. Later, landed housing schemes came up. Then, condominiums and serviced apartments sprang up,” says Chua.

Steady values at USJ 1

Developed by the then Sime UEP Properties Bhd in the late 1980s as an extension of the Subang Jaya township, UEP Subang Jaya, or better known as USJ, is today an affluent neighbourhood comprising sections from USJ 1 to USJ 27, Subang Heights and USJ Heights.

USJ 1 stretches from Da Men Mall to the Klang River, which separates Puchong and Subang Jaya. Land in Subang Jaya is getting scarce with only a few parcels left to be developed.

USJ 1, however, has yet to reach saturation point unlike other areas in Subang Jaya.

Developers that own land in the vicinity include Sunway Bhd, Dergahayu Sdn Bhd and Sime Darby Property Bhd.

At present, a major part of USJ 1 consists of small factories and warehouses. “The industrial properties here are freehold and expected to command good prices in the coming years,” says Chua.

Among the notable residential projects in USJ 1 are Grandville by Dergahayu, Impian Meridian by PJ Development Holdings Bhd, Casa Subang by Casa Andaman Sdn Bhd, Regina USJ 1 by Regina Development Sdn Bhd and USJ One by OSK Property.

Passers-by will notice a project in the vicinity by Mammoth Empire Holdings Sdn Bhd. It is understood that hoardings have been put up for some time. According to several online news reports, the project has been delayed. At the time of writing, the developer could not be reached for comment.

Apart from Summit USJ and Da Men Mall, the other better known landmarks here are SEGi College Subang Jaya, Giant Hypermarket and Mydin Wholesale Hypermarket.

According to Daniel Roslan, a Subang Jaya resident who moved into Regina USJ 1 three years ago, USJ 1 is a convenient location because of the hypermarkets. “It also helps that the area is close to an LRT station and has easy access to the Kesas highway,” he adds.

Chua concurs. “USJ 1 is well connected by highways. And now with the LRT service, travel to various parts of the Klang Valley is so easy.”

According to Laurelcap Sdn Bhd director Stanley Toh, residential properties in USJ 1 are in demand with the landed ones (sub-sale terraced houses) being more popular than the high-rises.

“However, high-end landed properties such as individually designed detached houses are harder to sell because of their high prices. These days, those looking for new residential properties in the area usually go for high-rise developments,” he says.

The prices of terraced houses range from RM450 to RM550 psf. The average rent is between 90 sen and RM1 psf or a yield of 2.5% to 3%.

For semi-detached houses, the prices range from RM460 to RM500 psf and the average rent is between RM1.30 and RM1.50 psf or a yield of 2.8% to 3.3%.

Meanwhile, the prices of detached houses range from RM750 to RM800 psf and the average rent is between RM1.50 and RM1.80 psf or a yield of 3% to 4%.

As for apartments and condos, the prices are between RM450 and RM550 psf. The average rent is between RM1.30 and RM1.80 psf or a yield of 4% to 4.5%.

“The demand for commercial properties in USJ 1 is picking up slowly, especially with the opening of two new access roads to the Kesas highway. Nonetheless, the prices of shops and retail lots have been stagnant,” says Toh.

He maintains that ground-floor shops in USJ 1 could still fetch an average rent of between RM5 and RM5.50 psf. For those on the upper floors, the average rent is between RM1.30 and RM1.80 psf.

USJ 1 continues to attract the upper middle-income group, especially couples and young families. Most of the residential property buyers are from Subang Jaya.

“The target market of the handful of new developments in USJ 1 is young families. The area is good for those looking to upgrade to new homes with better security and facilities. It is also ideal for those looking to downsize to apartments to spend their retirement years,” says KGV’s Chua.

Living in a popular area like USJ 1 has its advantages and disadvantages, says Toh. “USJ 1 has ample amenities and facilities, easy access to highways and good town planning. On the flip side, there is constant traffic congestion and it is densely populated.”

 

A promising outlook

USJ 1 is part of the sprawling, verdant township of Subang Jaya. Developed from rubber estates in the 1970s, the self-contained township encompasses SS12 to SS19, USJ, Taman Wangsa Baiduri, Taman Mutiara Subang and Taman Bukit Pelangi. The residential properties here are mostly terraced houses with a few blocks of condos in SS16 and SS15 as well as around the lake in SS12.

According to KGV’s Chua, USJ 1 is in an advantageous location as many amenities are found there or nearby.

Subang Jaya has many facilities such as government and private schools as well as institutions of higher learning such as INTI International College. Its commercial hub in SS15 offers restaurants and services that cater for the locals and students. In SS12, there is the Subang Jaya Medical Centre, one of the leading private hospitals in Malaysia. Other landmarks in the vicinity are Subang Parade and Empire Shopping Gallery.

Subang Jaya also has easy access to highways such as the Federal Highway, New Pantai Expressway, Kesas highway, LDP and Elite Highway.

Meanwhile, an upcoming project in USJ 1 is The Edge Residen by Dergahayu. Launched in 2015, the leasehold development comprises 447 serviced apartments and is expected to be completed this year, according to Toh.

The prospects for USJ 1 look promising, says Toh. “Property values in this area are expected to rise in the long term. However, in the short term, they may stagnate due to the current economic climate.”

“We forecast prices and rents to trend upwards next year. USJ 1, being surrounded by popular areas such as Bandar Sunway and Bandar Puchong Jaya, is worth taking a closer look,” says Chua.