Demand for smaller office expected to grow post-Covid-19

Rental market also shares similar sentiments with commercial units as firms with too much office spaces are looking for less

by FARA AISYAH/ pic by MUHD AMIN NAHARUL

DEMAND on smaller office space is expected to increase post-Covid-19 pandemic as companies are likely to focus on the essential part of the operation.

Property Guru International (M) Sdn Bhd country manager Sheldon Fernandez said the office segment would see some trendsetting in the short term.

“People would still need office spaces, but probably lesser. We are probably going to see demand for smaller office spaces go even higher.

“Maybe shared offices would be a new trend. It is a pretty interesting scenario given the tough time,” he said in a recent PropertyGuru’s Facebook Live session.

He added that the rental market also shares the same sentiments with commercial units as companies that have too much office spaces are looking for less.

Fernandez said people are looking for commercial units with rental as low as RM1,000 to RM6,000 per month.

He also said the property technology company is seeing lower traffic to its website during the Covid-19 pandemic, particularly during the Movement Control Order (MCO) period.

“We are seeing a traffic level we would normally see during holidays, for example, Chinese New Year. It is slightly lower than normal days.

“The data suggest that time is really difficult as people are focusing on the essentials,” Fernandez said.

He added that most PropertyGuru Malaysia’s visitors are looking at high-rise homes during the MCO, followed by terrace, link-houses and bungalows.

The price range starts from RM400,000 to RM2 million.

“As such, I think there are a lot of investment activities going on in the market because Malaysia has always had the affordability challenges. There are also a lot of opportunities in the market today,” Fernandez said.

PropertyGuru Malaysia recently said historical data showed that the property market tends to rebound immediately following a downturn.

The trend is proven by the surge of transaction volumes and values in the years following 1998 (the Asian financial crisis and Nipah virus outbreak), 2002 (the SARS outbreak) and 2008 (the global financial crisis and Influenza A [H1N1] outbreak).

Similar recoveries are seen in national house price growth in the years following 2001, 2006 and 2009.

During the 1998 recession, in conjunction with the outbreak of the Nipah virus, property volumes and values declined by 32.3% and 47.6% respectively, the largest downturn in recent decades.

However, the industry moved forward with 186,000 transactions worth RM27.9 billion the next year.

PropertyGuru Malaysia noted that the patterns are set to repeat themselves following the government’s MCO and Covid-19 outbreak, with various initiatives contributing towards significant domestic liquidity moving forward.

The initiatives include Bank Negara Malaysia’s reduction of the statutory reserve requirement ratio to 3%, moratorium on financing payments, Overnight Policy Rate’s revision and revised voluntary Employees Provident Fund contribution guidelines in the government’s earlier economic stimulus package announcement.