Better times are expected for the office property market in Kuala Lumpur | Daily Express Online

The office property market in the Klang Valley is set to improve further, according to a real estate consultant.

Knight Frank Malaysia said the pace of recovery will continue as economic activity picks up and the business climate improves.

He said such a positive impact was made possible by the country’s transition to the endemic phase of Covid-19.

Senior Executive Director of Research and Consulting at Knight Frank, Judy Ong, said that despite increasing challenges in the office market, the overall occupancy rate of purpose-built office space in the city of Kuala Lumpur has improved to 67.2% in the first half of 2022 (H1 2022) from 66% in the previous six months (H2 2021).

ADVERTISING

“Similarly, professional demand in KL outskirts was also slightly higher at 86.8% (H2 2021: 86.1%).

“However, the overall occupancy rate at Selangor decreased slightly during the reporting period to 74.1% from 74.6% in H2 2021,” it said in a statement.

The global real estate advisory group has released its Real Estate Highlights note on the performance of the real estate market in the Klang Valley, Penang, Johor Bahru and Kota Kinabalu in the first half of 2022.

According to the report, there has been a surge of interest in coworking spaces as they offer occupants the opportunity to scale up or down operations.

“The coworking model is also attractive in terms of profitability and networking, and therefore appeals to organizations of all sizes, especially companies that have continuity plans in place,” he said.

Group chief executive Sarkunan Subramaniam said there was considerable interest in office buildings that have been certified by the Malaysian Green Technology Corporation as using green technologies.

ADVERTISING

These office buildings not only support the 2030 Sustainable Development Goals (SDGs) agenda, but are also eligible for tax incentives.

“To stimulate or retain more occupancy, landlords are improving building specifications, prioritizing health and safety and offering more flexible rental arrangements,” he said.

Sarkunan noted that while demand for space is expected to increase as more employees gradually return to the physical workplace, rental rates and occupancy levels of office buildings in the Valley of Klang should remain under pressure in the short term.

“This is due to the growing mismatch between supply and demand and the fact that more organizations, especially multinationals, are embracing the hybrid working model,” he added.

Penny D. Jackson