PETALING JAYA (April 18): The average occupancy rate for offices in Kuala Lumpur declined to 77.9% as at end-2016, from 81.2% a year earlier due to new supply that came on stream, exceeding 320,000 sq m, according to the National Property Information Centre’s (Napic) Malaysian Property Market Report 2016 released today.

The Petronas Twin Towers led the rental market at a premium range from RM97 to RM154 psm. Integra Tower, Menara Shell, GTower KL and Menara Prestige also secured premium rentals.

Overall, the occupancy rate for the country’s office subsector had moderated from 83.7% in 2015 to 82.3% in 2016, but states that are dominated by government buildings had mostly secured more than 90% occupancy.

As at end-2016, there were 20.75 million sq m of existing office space in 2,465 buildings. Another 68 buildings will offer an incoming supply of 2 million sq m while 27 buildings will bring in some 800,000 sq m in planned supply.

There were 11 new completions offering a total space of 482,801 sq m in 2016, a decline of 7.3% against 2015.

A similar trend was seen in new building starts and new planned supply which were down by 24.1% to 366,352 sq m (seven buildings) and 22.4% to 264,918 sq m (eight buildings), respectively.

Selangor also saw its occupancy rate drop slightly to 75.5% from 75.7% in 2015. Rentals of office buildings in Selangor were generally stable with those adjacent or within city transit hubs such as Petaling Jaya or Damansara having obtained high rents exceeding RM100 psm.

The report also noted there were 21 office building transactions worth RM2.46 billion recorded in 2016, with Kuala Lumpur recording the highest number of transactions with 10 buildings.