This article first appeared in City & Country, The Edge Malaysia Weekly on August 8, 2022 - August 14, 2022

Damansara Heights, or Bukit Damansara, is one of the most sought-after and prestigious residential addresses in the Klang Valley, with an active rental market comprising predominantly expatriates as well as some high- to ultra-high-net-worth locals.

“Tenants in Bukit Damansara comprise foreign nationals from various parts of the world. Most are westerners who value the convenience of the location, the high-end malls in nearby Bangsar and Mid Valley, as well as the numerous restaurants and cafés,” says Aegis Property director Shawn Fernandez.

“Additionally, some of these tenants work in the corporate towers around the area. The international schools close by also provide pick-up and drop-off services within Bukit Damansara. The location offers tremendous convenience and accessibility,” he adds.

While there is a considerable number of tenants in the affluent neighbourhood, properties are still predominantly owner-occupied, notes Fernandez. Nevertheless, he is confident the highly anticipated Pavilion Damansara Heights will draw more tenants to the area in the near future. The freehold integrated development — comprising a lifestyle mall, luxury residences and corporate offices — is slated to be completed at the end of 2023.

Fernandez notes that the landed residential rental market has performed well over the last two years despite the Covid-19 pandemic. “Good-quality landed homes have found new tenants within reasonable timeframes. A factor that has pushed the quicker take-up rate has been the restrictions imposed due to the pandemic. With [more people working from home], several tenants sought bigger space, resulting in a shift from condominiums to landed homes.”

However, he notes that compared with previous years, vacancy periods between tenancies are now longer. “More so in 2020, when the uncertainty was greater. During 2021, we found that good-quality landed homes were being rented out quicker than in the preceding year.”

Zerin Properties managing director and CEO Previndran Singhe agrees that the residential rental market in Damansara Heights is still very active. “We are seeing demand from the local market as well, especially those who are renovating their homes or waiting for their homes to be built. Rents took a hit a few years ago and we are seeing some improvement, but mainly for properties that [are in demand] and are well-maintained.”

According to Previndran, transacted rents of high-rise properties in Damansara Heights — depending on the condition and location of units — are in the range of RM3 to RM6 psf. “A recent transaction for a unit in a newly completed high-rise in Damansara Heights was just below RM6 psf. Yields [of high-rises in the area] are in the 3% to 4% range.”

Aegis Property’s Fernandez observed a noticeable drop in rental rates for landed properties in the area in 2020, the first year of the pandemic. “Where homes used to command RM15,000 in rental, they were being leased out for RM8,000 to RM12,000 per month.”

“However, we saw an increase in rents [last year] as more modern homes were taken up and removed from the market. With the reduction in supply, prices have inched up again, and good-quality homes do not remain on the market for long.

“For example, a bungalow in Damansara Heights was rented out even before the existing tenant had moved out … at RM20,000 per month,” he says. This property, he adds, is part of the Seventy Damansara development that comprises 12 bungalows within a gated-and-guarded enclave. The built-up of this 3-storey detached home is 8,000 sq ft; it comes with 5+1 bedrooms and features an infinity pool with views overlooking Bangsar.

Another 3-storey bungalow at Seventy Damansara had a change in tenants with no vacancy period and no reduction in rental. The home, which has a land area of 7,500 sq ft and a built-up of about 7,000 sq ft, secured a five-digit rental rate (RM20,000) in May last year.

In February 2021, a 3-storey semidee in Idamansara saw a change of tenants with a drop of RM1,500 from the previous rental rate (RM11,500). This home sits on a 3,400 sq ft plot and has a living area of 4,500 sq ft.

Other properties Fernandez has rented out in Damansara Heights include two semidees at RM13,000 and RM12,000 respectively. “Both these homes are also within gated-and-guarded communities, namely Idamansara and Semantan Villa. The yields for both these properties are about 4% to 4.5% for the owners, based on their purchase prices.”

A more recent rental transaction at Idamansara is that of a 4,700 sq ft, partially furnished semidee with 5+1 bedrooms. According to Fernandez, the property was leased just last month to an English family at RM14,500 per month. A 6,000 sq ft bungalow in Damansara Heights was rented out last November at RM23,000 per month, he adds.

Meanwhile, the rental market for strata properties in general still remains challenging due to an oversupply, Fernandez notes.

As for landed properties in the Batai and Balau localities, as well as the areas of Setiamurni and Setiabakti, Zerin Properties’ Previndran says they are particularly sought-after “due to their micro location and newer products in the latter (Setiamurni and Setiabakti areas). He adds that the recently completed AIRA Residence “is also becoming very popular as it is very well constructed with fantastic layouts and great views”.

Previndran expects the rental market to tighten due to an increase in demand for owner-occupiers as the property market improves. “With a limited supply of landed and low-density properties, Damansara Heights will still be [one of] the most desired residential addresses in the country as owning a property here is still a target and the dream of many [prospective purchasers]. It is also an aspirational address, pushing the owner-occupier mindset.”

From Fernandez’s point of view, Damansara Heights will enjoy even more conveniences when Pavilion Damansara Heights opens. “Coupled with the two MRT stations [Semantan and Pusat Bandar Damansara] at its doorstep, Bukit Damansara will likely see increased rental yields and take-up rates within the mid to long term.”

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