PETALING JAYA (Jan 8): Greater Kuala Lumpur could become the biggest office space market in the Asean region this year, according to property consultancy Savills Malaysia.
“With existing supply of 123 million sq ft, we are getting very close to Hong Kong’s 127 million sq ft. The additional 20 million sq ft due for completion by 2022 will put us in the lead, and it could happen this year,” Savills Malaysia executive chairman Datuk Christopher Boyd said in a press statement today.
Office rentals in KL is expected to remain weak but will be supported by demand from the IT industry, co-working operators, the finance sector and upgraders, generally, he added.
The retail sector, on the other hand is expected to be resilient particularly the beauty and wellness, accessories and niche grocery trade segments after the overall retail market recorded a strong performance in 4Q18, Boyd noted.
“The major malls will still see strong sales turnover and footfalls. We also foresee that the next generation of super-malls, such as The Exchange at TRX (Tun Razak Exchange) and Pavilion Damansara Heights, will rapidly become major retail destinations when they are completed post-2020,” he said.
Meanwhile, the residential property values values will continue to slide. “ Ultimately, Greater KL will recover first, followed by Penang, and then Johor,” he opined.
According to Boyd, there are about 245,000 new residential units under construction in Greater KL while an estimated 55,000 units in Penang and 108,000 units in Johor are being built.
“This means that supply of residential units will grow by 10% to 12% in the next couple of years. Prices will adjust to meet effective demand, but there will never be a remedy for building cheap houses in undesirable locations,” he said.