Govt must act to curb office oversupply

KUALA LUMPUR (April 19): The government needs take tougher action to slow down commercial property developments to address the growing oversupply in the sector, property industry executives said.

Datuk Abdul Rahim Abdul Rahman, who is founder and executive chairman of Rahim & Co Chartered Surveyors Sdn Bhd, suggests a solution to the glut would be for the government to be more prudent on issuing development permits to property developers.

He said the government should consider imposing stricter rules on granting of development permits to stop the overbuilding in the commercial property segment.

The increase in office space supply will exact downward pressure on prices while the rise in office vacancy will in turn dampen the economy.

According to Rahim, some five million sq ft of office space is expected to hit the market this year, and more will flood the market in the next few years given the large-scale development projects, such as Kuala Lumpur International Financial District (KLIFD) by 1Malaysia Development Bhd (1MDB).