Deal of the decade

Properties at plush Damansara Heights sold at steep discount

KUALA LUMPUR: Thirty-seven units of semi-detached and bungalow units were sold at up to about 40% below market value in the upmarket residential area of Damansara Heights, Kuala Lumpur, less than a month ago, sources said.

News of the sale filtered out to property agents about two months ago.

Although there are concerns about the slow property market today, the steep discount at which the 37 properties exchanged hands in the second most sought-after residential area of Damansara Heights after Kenny Hills cannot be viewed as a harbinger of things to come in the larger property sector.

What makes this series of below-market sale noteworthy is that Damansara Heights is a highly sought-after piece of real estate and is home and playground to top-ranking civil service and corporate figures.

It was “a steal”, according to a property source.

With some of the other bungalows in that guarded community costing some RM10mil apiece or more, a 40% discount for that location, said a source, was “a split-second decision”.

“You don’t need to think about it,” the source said, although some of the units have high-tension wires running behind them and are sited next to slopes.

The 37 units are located in two separate locations, the 42-acre Seri Beringin and 9 Beringin, both guarded communities under the stewardship of SP Setia Bhd after it formally acquired Island & Peninsular Bhd (I&P) earlier this year.

The “below-market disposal was a corporate sale” by SP Setia, which, having acquired I&P, is now reviewing I&P’s assets and consolidating and streamlining its portfolio of assets under one roof, an industrial source said.

Eight of the 16 semi-detached units are three-storey units with lifts with a market value of about RM4.5mil and RM4.8mil, but were sold for between RM2.9mil and RM3.95mil each, another source said.

These eight units in 9 Beringin were completed about five years ago during the I&P days to generate recurring rental income of between RM12,000 and RM15,000 per unit. So, they were never up for sale.

The other eight semi-detached units and 14 bungalows located within Seri Beringin 4 were developed for recurring rental income by Syarikat Perumahan Pegawai Kerajaan Sdn Bhd (SPPK) more than 10 years ago.

SPPK was subsequently amalgamated into the I&P group following the merger of I&P, Petaling Garden Bhd and Pelangi Bhd in 2009. I&P was subsequently formally acquired by SP Setia earlier this year.

So, there was “no original selling price for the 14 bungalows and semi-detached properties, which means the developer did not drop prices,” a source said.

Seven units of never-lived-in villas, as known in I&P’s website, were three-storey detached units.

Priced previously by I&P at about RM9mil, they were sold recently at about 30% discount.

Another bungalow with a land area of close to 13,000 sq ft with about 30,000 sq ft of gazetted vacant land next to it was sold for RM8.45mil.

Its original asking price was about

RM11.5mil.

The sale of the units was concluded quickly because of the attractive price point.

There was no need to go to town about it because the people who were buying “wanted confidentiality and the company which sold the units wanted to wrap up the deal,” said a source.

On the effect of such a massive drop in market price in that location and other areas, the source said this was “a one-off thing” and would not affect other areas or units within Damansara Heights.

“Nobody is distressed up to a point where they have to sell the family silver below market price.

“Up to 80% of the units there have no bank borrowings.

“Most of the owners have been living there some 40 years.

“The remaining 20% are young 30- and 40-somethings who had entered that market. So, it is unlikely to have a situation where people throw down prices,” the source added.

Including the new landed units being planned in Damansara Heights, it is estimated that there would be up to about 2,800 individually titled units in that locality, a source said.

There was no original selling price for the 14 bungalows and semi-detached properties, which means the developer did not drop prices.

Property source