In an event organized by Malaysia Property Incorporated (MPI), industry experts opined that while office space rental competition is poised to heat up, rental rates in the Klang Valley is unlikely to crash like in Dubai – as mentioned in a recent CIMB report. According to Knight Frank Malaysia CEO Sarkunan Subramaniam, the rental rates for Grade A office space is the city has been holding steady at between RM7.50 to RM12.00 psf. However, rent-free periods have seen an increase from 2 months to 6 months.
Office space in the Klang Valley has increased from 69.56 million square feet in 2003 to 104.66 million square feet in 2013, according to Khong & Jaafar MD Elvin Fernandez. The current occupancy rate hovers around 77% – up by 2..67% compared to the first half of 2013, according to notes distributed by MPI.
Of concern is the 118 Warisan Merdeka Tower and the Tun Razak Exchange financial hub. The latter will add 9 million square feet of office space, adding to the 21.96 million square feet of office space that will soon enter the market. As for Warisan Merdeka Tower, half of the tower will be taken up by Permodalan Nasional Berhad.