KL office market vacancy rate drops due to higher domestic demand

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KUALA LUMPUR: The average office market vacancy rate in Kuala Lumpur was at 12.8% in the fourth quarter of 2014 (4Q14), a decrease from 15.6% year-on-year (y-o-y) due to higher domestic demand, according to Jones Lang Lasalle Property Services Malaysia Sdn Bhd’s (JLL Malaysia) property market monitor for January 2015.

“[As for the office] rental market, the average rental rate is stable as most of the supply comes after 2Q15, vacancy is expected to marginally increase due to more office lettable area supply,” JLL Malaysia country head YY Lau told The Edge Financial Daily.

In 4Q14, the average gross asking rents for prime office buildings within Kuala Lumpur increased to RM6.20 per sq ft, a 3.5% rise y-o-y from RM5.99.

According to JLL Malaysia, a total of two million sq ft of Grade A office space is expected to be completed by 2015 within Kuala Lumpur.

Some of the developments include Naza Tower @ Platinum Park by Naza TTDI Sdn Bhd offering 506,000 sq ft of net lettable area (NLA), which is targeted to be ready by April this year; Ilham Baru Tower by IB Tower Sdn Bhd offering 394,000 sq ft of NLA; and Summer Suites and Versatile Office Suites by UEM Sunrise Bhd offering 540,000 sq ft of NLA.

All the developments are located within the Kuala Lumpur City Centre vicinity.

 

This article first appeared in The Edge Financial Daily, on February 27, 2015.