News: KL Office Rent Up 2.1% In Q3

Dec 4, 2019

Kuala Lumpur saw office rents increase 2.1% during the third quarter of 2019 over the same period last year, reported New Straits Times citing Knight Frank.

The real estate consultancy revealed that the overall Asia-Pacific Prime Office Rental Index climbed 0.1% to 157.3 in Q3 2019, slower than the 0.9% hike registered in the second quarter of 2019.

On an annual basis, the index slowed from the 3.4% increase registered in Q2 to 1.8% in Q3.

“The office markets across the Asia-Pacific region continue to face familiar foes as aftershocks from the ongoing US-China trade tensions continue to impact market confidence, a concrete Brexit conclusion remains elusive and Hong Kong, a major office market within the region, grapples with unprecedented social unrest,” said Knight Frank.

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It expects office rents in Kuala Lumpur to decline in the future since the 2.1% growth in Q3 was primarily due to the addition of two new office towers within the Tun Razak Exchange financial district – Menara Prudential and The Exchange 106 which held premium rents.

On an annual basis, the index for Kuala Lumpur rose 1.5% in Q3 2019.

Knight Frank noted that the tallest tower in Malaysia and the latest iconic skyscraper within the capital city, The Exchange 106 @ Tun Razak Exchange (TRX), obtained the Certificate of Completion and Compliance (CCC) for the building’s lower zone in Q3 2019.

Teh Young Khean, executive director of corporate services at Knight Frank Malaysia, said the building, which achieved 20% pre-committed occupancy, command higher rental rates as it provides good quality and high specification space.

Despite the rental increase, the overall office market in Kuala Lumpur remains under pressure, with high impending supply while landlords continue to dangle attractive lease packages to attract and retain tenants, said Knight Frank.

With this, Kuala Lumpur’s office market is expected to remain challenging in the medium term.

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Alice Kon
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