It says the growth in rental will be ahead of Beijing and Shanghai markets
By FARA AISYAH / Pic By ISMAIL CHE RUS
Prime office rental in Kuala Lumpur (KL) will grow by 2.5% over the next three years, said Knight Frank in its fourth edition of “Global Cities: The 2018 Report”.
The report looks into the continuous trends in real estate across 40 global cities, with three-year forecasts for 15 prime office markets in Asia Pacific including KL, Manila and Singapore, among others.
Knight Frank Malaysia Sdn Bhd MD Sarkunan Subramaniam said 13 of the 15 markets are expected to see rental growth starting from the end of 2017, with only two markets expected to see rent softening over the period.
“KL prime office rental is expected to grow by 2.5% over the next three years, coming off from the 1.7% annual decline.
“It will be ahead of Beijing and Shanghai rental markets,” he told reporters during the launch of the report in KL yesterday.
The report stated KL is one of the key market leaders in mixed-use development.
The self-contained developments — which promote the “live, work, play” factor — integrate the retail, office and residential components in one place.
Sarkunan further said Damansara City, which is seeing the rejuvenation of its former town centre into Pavilion Damansara Heights, will be the new location to watch.
He added more skyscrapers will dot the KL skyline by 2020 with the scheduled completions of PNB Warisan 118 Tower and The Exchange 106 in Tun Razak Exchange (TRX).
The entry of these skyscrapers, he said, will raise the benchmark of premium grade office space in KL.
The independent global property consultancy report also features the Skyscraper Index which examines the rental performance of commercial buildings over 30 storeys across 23 global cities including Hong Kong, New York and Tokyo, among others.
The result shows that KL’s skyscrapers rent at US$23 (RM96.96) per sq ft and the number has remained flat since last year, offering the most value among the metropolises.
Meanwhile, InvestKL CEO Datuk Zainal Amanshah, who was also present during the unveiling of the report, said KL and Malaysia have much more to offer in comparison to other South-East Asian cities.
“We’ve seen a steady influx of multinational corporations (MNCs) into KL in recent years, operating as a regional hub.
“This is because the ease of doing business is strong in KL, and we see a few factors such as the mass rapid transit launch being the drivers of growth to spur foreign direct investment in the city,” Zainal said.
He added that with the increase of supply, the quality of offices continue to be upgraded to cater to the requirements of large corporates and MNCs.