Supply of office space in 2014 to exceed 2013

KUALA LUMPUR: The supply of office space in 2014 is expected to exceed that in 2013 with as much as 6.27 million sq ft in Greater KL, according to C B Richard Ellis (CBRE) Malaysia’s latest market view report.

CBRE noted that although a considerable supply is in strata-title or secondary buildings, the market is poised to favour tenants in the near future.

The golden triangle and central business district’s office vacancy rates decreased to 12.7% from 13.2% quarter on quarter (q-o-q). CBRE noted the leasing of 200,000 sq ft in Integra Tower by an oil and gas company. Integra Tower is a prime office building within MGPA (Malaysia) Sdn Bhd’s Intermark integrated development. As at 2Q13, the total supply of office space in the Greater KL area stood at 91.1 million sq ft, up from 89.2 million q-o-q.

The report stated that vacancy rates had increased in suburban areas. Selangor  showed an improvement from 19.4% in 1Q13 to 17.7% in 2Q13. Despite the decrease in vacancy rate and leasing within the city centre, the overall vacancy rate in the Greater KL area was 15% in 1Q against 14.4% in 2Q.

The supply of space in 2Q was taken up by four developments, all located outside the city centre. They are Menara D’Damansara with a net lettable area (NLA) of 253,000 sq ft, Plaza 33 (530,840 sq ft), Menara CIMB (609,000 sq ft) and Menara Shell (538,617 sq ft).

At least 2.53 million sq ft of office space from nine buildings will be completed in the second half of the year — three in Petaling Jaya with 750,000 sq ft of NLA, two in Shah Alam with 475,000 sq ft and four in suburban KL with 1.3 million sq ft. The supply in suburban KL will represent 50% of all completed projects in the Greater KL area over the next six months.

The KL Sentral development in Kuala Lumpur. The supply in suburban KL will represent 50% of all completed projects in the Greater KL area over the next six months.

This article first appeared in The Edge Financial Daily, on October 11, 2013.