KL Office Market Remains Stable
Can SP Setia Really Afford to Lose
Liew?
SP Setia sales gallery in Johor
The Kuala Lumpur office
market has remained
stable despite mounting
pressure on occupancy
and rental rates as
supply continues to
outstrip demand.
According to Knight
Frank, the overall rental
rates were generally
flat while occupancy
inched up marginally
following delay in
several completions.
It further added that
the investment market
was less active during
the review period, in
comparison to the first
half of 2013.
“There were noticeably
more announcements
of owners expressing
their interest to dispose
their buildings and
developers seeking
to secure tenants or
purchasers for their
office components
before commencement
of construction works
amidst the increasingly
challenging office
environment,” Knight
Frank observed.
Overall, average
occupancy in KL City
rose slightly to 83.2%
in 2H13 from 81.6% in
the preceding quarter
with improved take-up
in several buildings
that are popular with
the oil and gas (O&G)
sector and multinational
corporations (MNCs).
These buildings included
Menara Binjai, Integra
Tower, Vista Tower,
Menara Citibank and
Menara Etiqa Twins.
“The review period
also saw an overall
improvement in the
occupancy of office
buildings in KL City
Fringe with average
occupancy inching up
marginally to record
at 82.7% from 82.3%
in 1H13,” the research
house noted.
In addition, during 2H13,
there were several
notable announcements
of large scale integrated
developments with office
as a key component.
Knight Frank opined
that tenants are spoilt
for choice as supply
continues to outstrip
demand with landlords
offering attractive
incentives to retain
existing tenants and
attach new tenants to
main and improve their
levels of occupies.
“Amid a challenging
leasing market
environment with a high
supply pipeline, several
developers have adopted
a cautious stance by
offering the construction
of their projects, with
works to commence only
when they have secured
pre-leasing commitment
from potential anchor
tenants,” the research
house highlighted.
Nevertheless, it pointed
out that good grade
dual compliant (MSC
CyberCentre status and
Malaysia’s Green Building
Index) buildings will
continue to be popular
with sector, particularly
those located within
prime and established/
upcoming office
locations in KL City and
KL City Fringe.
“The concerted efforts
by InvestKL to attract
MNCs to set up their
regional hubs in Kuala
Lumpur are expected
to help cushion the high
level of office supply.
As of November, nine
MNCs have committed
to set up or expand their
operations in Malaysia.
InvestKL is in the talks
with more MNCs from
the US, Europe and
Japan to make Kuala
Lumpur their business
hub,” it noted.
No man is an island but Tan
Sri Liew Kee Sin quitting
as S P Setia Bhd boss has
implications beyond the
management changes that
will take place in the country’s
top property developer, post
April 30.
The Battersea Power Station
project in London will miss
Liew much more than S P
Setia, and at stake is the
reputation of Malaysia’s top
builder in London.
up rate for the 866 residential
units named Circus West.
Besides the Battersea
project, Liew brought S P
Setia to Melbourne, where it
is developing Parque, which
comprises 323 apartments
worth RM800 million.
Obviously, the man has
international contacts to help
in the design of properties,
acquire choice land and
pinpoint growth areas abroad.
The knee-jerk reaction has
been to look at how S P Setia
will cope without Liew.
With the excitement over his
resignation, most people have
forgotten that the Battersea
project is Liew’s brainchild. He
has been spearheading the
project, located by the River
Thames, from Day One.
To recap, a Malaysian
consortium comprising SP
Setia, Sime Darby Property
Bhd and the Employees
Provident Fund won the bid
to redevelop the Battersea
power station, which had sat
idle for 30 years.
The project, currently the
biggest development in the
United Kingdom and perhaps
also in Europe, has shown
that Malaysians can be world
champs.
These are the tools that Liew
will bring on board to Eco
World Development Group
Bhd (formerly Focal Aims
Holdings Bhd), which has a
few billion ringgit worth of
projects in hand.
And these are the very same
things S P Setia will miss when
Liew clocks off.
The Johor-based Eco World is
linked to Liew through his son,
Tian Xiong, who is a director of
the company.
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