Market to consolidate 2014.2

THE EDGE WEEKLY ISSUE#995

THE WEEK OF DECEMBER 30, 2013 – JANUARY 5, 2014

City & Country Section

LOCAL CONSULTANTS’ POLL: By THE CITY & COUNTRY TEAM

YY LAU
DIRECTOR
YY PROPERTY SOLUTIONS SDN. BHD.

Outlook

With the foreseeable excess supply of office space, take-up of office space is expected to be relatively slow, especially in the CBD.  Rental and occupancy rates are expected to face downward pressure as competition becomes increasingly intense.

However, new MSC status and green-certified office buildings in strategic locations are expected to have an advantage in securing tenants if the landlords offer reasonably higher rental rates than the buildings without such features.

The government has worked at attracting foreign MNCs to Malayisa by aggressively promoting the Economic Transformation Programme (ETP) and through “Invest KL”.

Investors in the office market need to take a longer-term view, as upside in the short-term could be limited.  There are still buildings that may draw more tenants as landlords can either upgrade them or offer reasonable leasing deals.

Greater KL, KLCC, KL fringes, decentralised areas and Cyberjaya are still attractive as main addresses for businesses.  We foresee Johor Baru and Penang gaining more prominence going forward.

Wish list

• More concerted efforts to promote foreign direct investments;
• Better management of crime rates in Greater KL; and
• Clear and consistent government policies at the federal and state levels.