Office occupancy rates down in 1Q2018 while supply creeps up

PETALING JAYA (June 29): The occupancy rate for purpose-built office buildings in the country dipped slightly in the first quarter of 2018 (1Q2018) to 77.4% from the 78% recorded at end-2017.

The National Property Information Centre (Napic) 1Q2018 data showed that there were 1,518 office buildings with a total of 16.16 million sq m of office space available in 1Q2018, an increase of 64,590 sq m or 0.4% from the end of last year.

Putrajaya (pictured) recorded the biggest drop in office occupancy rate – from 52.6% at end-2017 to 41.5% at end 1Q2018.

Supply of office buildings in the federal administrative capital was up by 53,770 sq m or 18.12% to 350,470 sqm in 1Q2018.

As many as five states registered a slight drop in the office occupancy rate, namely Kuala Lumpur (78.8% to 78.3%), Johor (74.7% to 74.6%), Kedah (83.2% to 83%), Sabah (86% to 85.8%) and Sarawak (88.9% to 88.4%).

Only Pahang and Terengganu recorded a slight increase in the occupancy rate from 83.8% and 93.1% to 84.2% and 93.9%, respectively, while the rest – Labuan (81.3%), Selangor (73.9%), Penang (76.6%), Perak (89.1%), Negeri Sembilan (84.4%), Melaka (69.2%), Kelantan (94.1%) and Perlis (100%) – remain unchanged.

On a year-on-year (y-o-y) basis, overall occupancy rate for purpose-built office buildings in Malaysia in 1Q2018 was still higher than 76.3% recorded in 1Q2017.

The total existing supply, on the other hand, has increased by 460,830 sq m or 2.94% from 15.7 million sq m in the same period last year.

Similarly, Putrajaya saw occupancy rate recording the biggest y-o-y drop among all states – from 51.4% in 1Q2017 decline to 41.5% in 1Q2018.

Meanwhile, Kedah, Labuan, Perak and Sarawak also saw a drop from 85.2%, 82.2%, 89.3% and 91.4% from a year ago to 83%, 81.3%, 89.1% and 88.4%, respectively.

While the occupancy rate for offices in Perlis remain unchanged at 100%, other states recorded an increase – Pahang (74.3% to 84.2%), Terengganu (87.9% to 93.9%), Negeri Sembilan (80.5% to 84.4%), KL (76.4% to 78.3%), Johor (72.9% to 74.6%), Sabah (84.2% to 85.8%), Selangor (72.8% to 73.9%), Penang (76.4% to 76.6%) and Kelantan (93.9% to 94.1%).