/// West Malaysia Property News
Mixed-Use Developments Continue to Be Popular
existing buildings and soon-to-becompleted projects. With the office
sector being a tenant’s market,
landlords continue to offer attractive
incentives to retain existing tenants
and attract new ones.
There were noticeably more
announcements from building
owners expressing their interest
to dispose of their buildings.
Developers are also seeking
to secure anchor tenants or
purchasers for their office
components before starting
construction in an increasingly
challenging office environment.
“Meanwhile, the investment market
is expected to be less active in
the next six months compared
with 1H2013 as yield compression
is expected to continue due to
the lagging rental market,” says
Sarkunan.
During the period under review,
there was no completion in the
city centre and the city fringe.
The cumulative supply remained
unchanged at 48.3 million sq ft
in the city centre and 19.7 sq ft
in the city fringe. The expected
completions, such as Menara 1
Sentrum and Menara Kembar
Bank Rakyat, for 3Q2013 were
rescheduled to a later date.
STABLE PERFORMANCE
The overall occupancy in the city
centre was stable in 3Q2013. The
overall occupancy in the city rose
1.7% quarter on quarter to 83%,
while the overall occupancy in the
city fringe rose 2.9% to 83.5%.
The trend of integrated
developments with mixed
components that typically comprise
retail, serviced apartments, small
offices/home offices (SoHos), small
offices/versatile offices (SoVos)
and/or commercial office space is
expected to continue in the coming
months.
“Well-located, good-grade, dualcompliant green and Multimedia
Super Corridor (MSC) status office
space with good accessibility and
connectivity to public transport
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are also expected to continue to
be well received. Furthermore,
there is strong demand for space
in decentralised locations with
good infrastructure and enhanced
accessibility,” says Sarkunan
Subramaniam, managing director
of Knight Frank Malaysia, when
presenting The Edge/Knight Frank
Klang Valley Office Monitor for
3Q2013.
Sarkunan notes that tenants are
spoilt for choice as competition has
heightened between landlords of
There were tenant movements
in Integra Tower, Menara Binjai
and Menara Weld in the Golden
Triangle, which saw an increase of
1.4% q-o-q in average occupancy
to 80.9%. Tenant movements were
also noted in Wisma Dang Wangi,
and to a lesser extent in the central
business district (CBD). CBD average
occupancy rate increased 2.5%
q-o-q to 84.7%.
In the city fringe, the overall average
occupancy rate increased by 2.9%
from last quarter to 83.5%. Mid
Valley City (MVC)/Bangsar/Pantai
saw a 4.1% increase in occupancy
to 92.8%, while Damansara Heights
(DH) and KL Sentral (KLS) registered
increases of 1.3% (79.1%) and 2.1%
(67.5%) respectively .
Major tenant movements were
noted in Menara I & P 2 in DH,
Menara Shell in KLS and in a few
buildings in MVC/Bangsar/Pantai,
especially in Bangsar South.
The overall rental rate was flattish.
The city centre saw a marginal
decline of 0.1% q-o-q in average
rental rate, which stood at RM5.96
psf. The average rental rate in the
city fringe remained unchanged at
RM5.52 psf, which Sarkunan says
is reflective of growing pressure on
rents due to the high impending
supply.
The Golden Triangle registered
a 0.2% decline from last quarter
to RM6.26 psf, and the CBD was
unchanged at RM4.76 psf.
In the city fringe, average rental rate
dipped 0.5% q-o-q in DH to RM4.42
psf and remained unchanged in KLS
and MVC/Bangsar/Pantai at RM7.03
psf and RM5.54 psf respectively.
There was an overall net absorption
of over 510,000 sq ft compared with
398,000 sq ft a year ago.
According to Sarkunan, there were
two notable transactions in the
period under review. Maju Holdings
Sdn Bhd sold 24 office lots of its
under-construction Tower 3 of Maju
Linq in Bandar Tasik Selatan for
about RM600 psf to Ipmuda Bhd.
The office lots amounted to about
42,792 sq ft of lettable area.
Jaya33 Sdn Bhd disposed of its Jaya
33 in Section 13, Petaling Jaya, at
RM725 psf to Pelaburan Hartanah
Bhd. Jaya33 has a lettable area of
450,000 sq ft.
NOTABLE ANNOUNCEMENTS IN
3Q2013
KLCC Property Holdings Bhd
(KLCCP) has dislodged its intention
to buy the remaining 40% in Suria
KLCC held by CBRE Global Investors,
opting instead to focus on the
redevelopment of Lot D1 and
Menara Dayabumi in Kuala Lumpur.
KLCCP is in the midst of securing an
anchor tenant for the 1.4 million sq
ft (gross floor area) Lot D1. Should
investment decisions be finalised by
end-2013, the development will be
completed within three to five years.