CBRE: New office supply makes it a tenants market

KUALA LUMPUR: CB Richard Ellis (Malaysia) (CBRE) notes that new office supply in the coming years will make it a tenants market, in its 4Q2010 Marketview Kuala Lumpur Office report released on Friday, Mar 11.

Additionally, CBRE expects occupancies and rents will remain flat or decline slightly during 2011 before undergoing even greater downward pressure in 2012-13.

"The supply scheduled to be completed in 2011 — 2.6 million sq ft in the city centre along — will again tilt negotiations in the favour of prospective tenants," said CBRE.

The cumulative supply of office space in the Klang Valley was 79.2 million sq ft as of end-of 2010, of which 39.7 million sq ft is located within the city-centre areas, like Golden Triangle and CBD, the report stated.

The most significant transaction during 4Q2010 was the sale of Wisma KLIH by Kuala Lumpur Industries Bhd (a subsidiary of Equine Capital Bhd) to Wonderful Vantage Sdn Bhd for RM58 million. The building is located in the Bukit Bintang area, and its 14 storeys provide a net lettable area of 55,200 sq ft.