Malaysia's 2012 office property mart seen stable

By Bernama published in the Malaysian Chronicle News Portal:
Monday, 31 October 2011 17:45

KUALA LUMPUR - Malaysia's office property market is likely to remain fairly stable next year, but oversupply is expected in the next 18 months, says CB Richard Ellis (CBRE) Malaysia Sdn Bhd, a property consultancy firm.

The oversupply situation is due to a competitive rental market, its executive chairman Christopher Boyd told reporters after a luncheon talk on "Klang Valley Property Market Overview", hosted by MIDF Amanah Investment Bank Bhd here today.

However, he said, the arrival of multinational corporations (MNCs) in Kuala Lumpur due to the low operating costs as well as the young and well-educated population would help stabilise the office market.

Boyd said the supply situation has improved from two quarters ago, with some projects being pushed back or cancelled, but others are still on the drawing board.

He added that major developments including Naza KL Metropolis, Tan Chong Segambut, Warisan Merdeka and KL International Financial District (KLIFD) could have a major impact.

"We are seeing a shift in new office supply from city centre to suburban areas. Short-term demand is stable but unlikely to grow sharply," Boyd said.

He said an additional 2.32 million sq m are expected in the Klang Valley by 2015 (excluding Tan Chong Segambut, Naza KL Metropolis, Warisan Merdeka and KLIFD), and based on current supply projections, there will be more office space in suburban areas than in the Golden Triangle by 2014/15.

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