KUALA LUMPUR: More foreign small and medium enterprises (SMEs) are expected to set up offices in the country in the coming years as office supply increases.
“Since 2009, the Malaysian economy has gradually moved towards 100% foreign ownership companies. [This is mainly because office] space is still relatively cheaper in Malaysia as compared with other neighbouring countries. So, we’ll definitely see more foreign SMEs here,” said Melvin Lim, the chief executive officer of Centennial Business Suites.
Previndran Singhe, the chief executive officer of Zerin Properties, said supply of purpose-built office space in Greater KL is expected to grow by 8.7% by 2016. Current supply stands at about 137.11 million sq ft.
Previndran and Lim were speakers yesterday at the Malaysia Property Incorporation seminar entitled “Is 2014 a good time to invest in prime commercial buildings?”. Other presenters included Fabrice Godeau, vice-president of the Malaysian French Chamber of Commerce & Industry; Datuk Joey Yap, founder of the Mastery Academy of Chinese Metaphysics; and Dr Saeed Zaki, regional managing director of Design Worldwide Partnership Sdn Bhd.
Lim said Malaysia has a competitive business cost among major cities in the region with a total occupancy cost per workstation of US$4,180 (RM13,464). This, coupled with relatively lower labour costs compared with countries such as Singapore and Hong Kong, makes Malaysia an attractive destination for foreign SMEs to set up their businesses.
Malaysia’s Grade A office space rentals of US$31.61 psf per annum are still considered relatively affordable compared with Singapore and Hong Kong, and are expected to remain stable in the next few years, said Lim.
According to the latest statistics, Asean and European SMEs make up 90% of the high-end SMEs operating in Kuala Lumpur compared with only 45% in Singapore, said Lim.
He said foreign SMEs will bring in more international tenants, thereby adding global recognition to the building, city and country.
This article first appeared in The Edge Financial Daily, on May 16, 2014.
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