KUALA LUMPUR: Office rents here in the city inched up 2.1 per cent in the third quarter of 2019 compared with a year ago, said real estate consultancy Knight Frank.
The overall Asia-Pacific Prime Office Rental Index, meanwhile, rose 0.1 per cent to 157.3 in the third quarter of this year, slower than the 0.9 per cent growth in the second quarter of this year.
On a yearly basis, the index climbed 1.8 per cent, slowing from the 3.4 per cent rise in the second quarter.
“The office markets across the Asia-Pacific region continue to face familiar foes as aftershocks from the ongoing US-China trade tensions continue to impact market confidence, a concrete Brexit conclusion remains elusive and Hong Kong, a major office market within the region, grapples with unprecedented social unrest,” Knight Frank noted in a statemnent today.
It said Kuala Lumpur office rental was set to decline in the future as the 2.1 per cent rise was mainly due to the addition of two new office towers in the Tun Razak Exchange financial district, namely The Exchange 106 and Menara Prudential which held premium rents.
On a yearly basis, the index for Kuala Lumpur climbed 1.5 per cent in the third quarter of this year.
“Malaysia’s tallest tower and the capital city’s latest iconic skyscraper, The Exchange 106 @ Tun Razak Exchange (TRX), was awarded the Certificate of Completion and Compliance (CCC) for the lower zone of the building in Q32019.
Knight Frank Malaysia executive director of corporate services Teh Young Khean, in the same statement, described the building to have achieved 20 per cent pre-committed occupancy, offers good quality and high specification space and hence, command higher rental rates.
Despite the increase, Knight Frank believes that Kuala Lumpur’s overall office market remains under pressure, with high impending supply and landlords continuing to offer attractive lease packages to retain or attract tenants.
Hence, in the medium term, Kuala Lumpur's office rental market is likely to remain challenging.