KUALA LUMPUR, Aug 14 — Leasing activity in Kuala Lumpur is rebounding in the second quarter of 2023 (2Q 2023) on post-pandemic demand, said Knight Frank, the leading independent global property consultancy.
According to its latest Asia-Pacific Prime Office Rental Index, a comprehensive analysis that tracks the rental performance of prime office properties across 23 key markets in Asia Pacific — out of the 23 cities tracked, 15 cities reported stable or increasing rents in 2Q 2023, compared to 16 in 1Q 2023.
Perth led the quarterly rental growth at 5.3 per cent, followed by Brisbane at 2.6 per cent.
Knight Frank Malaysia executive director of office strategy and solution Teh Young Khean said the commercial office market in Kuala Lumpur continues to be dynamic and activity in the sector is encouraging.
“We are observing strengthening market activity as the business climate continues to stabilise.
“Enquiry activity is on the rise as companies experiencing growth are seeking expansion and exploiting the tenant market to leverage the opportunity to upgrade the quality of the office space they occupy,” he said in a statement today.
He said that adding impetus to this flight to quality is the emphasis on environmental, social and governance (ESG) targets by companies with global mandates and landlords are strengthening their portfolios to deliver spaces that can match these requirements.
Consequently, market conditions across most of the region are expected to remain tenant-favourable for the rest of the year, with the forecast for the next 12 months for Kuala Lumpur being flat.
Meanwhile Knight Frank global head of occupier strategy and solutions Tim Armstrong said markets in Asia-Pacific have clearly outperformed with higher office utilisation rates compared to other regions and demand is holding up better, supported by a flight-to-quality trend.
“With the region’s development cycle expected to extend into 2024, the expansion of options will give occupiers leverage to secure favourable leasing terms in the current window, extending the flight-to-quality trend which will amplify the gap between best-in-class and lower-rated assets,” he said. — Bernama