Continued slowdown in Kuala Lumpur office market

PETALING JAYA: The Kuala Lumpur office market is expected to continue to slowdown due to the considerable amount of new office space coming on stream at end 2009, according to the 3Q2009 Marketbeat Kuala Lumpur Office Report by YY Property Solutions in association with Cushman & Wakefield

These additions, the report states, will lead to an oversupply situation in the Klang Valley although certain prime locations were facing shortages.

Among the significant projects to be completed soon include the Vista Tower (formerly known as Empire Tower) in Kuala Lumpur city and BRDB Tower in Bangsar. The former has a gross floor area of about 555,000 sq ft while the latter has GFA of 210,000 sq ft.

During the 3Q, leasing activities were mostly confined to existing companies that were consolidating or expanding their operations. Some tenants also moved out to less expensive locations to curb costs. The report added that existing office space not classified as Grade A standard but is well maintained with reasonable rental rates can expect high demand.

Recent significant new lease transactions have been Taylor Nelson Sofres Malaysia Sdn Bhd which moved into a multi-purpose building in KL City taking up 30,000 sq ft; the other being British Petroleum, who moved into a 90,000 sq ft space in KL Sentral’s Quill 7, which is on the fringe of Kuala Lumpur.