GREATER KUALA LUMPUR

OFFICE SECTOR
HIGHLIGHTS

01 05
The office sub-sector which is grappling with Companies to favour hybrid model with
oversupply in several key states over the last several collaboration with third party flexible space
years, is further disrupted by Covid-19 outbreak operators

06
Between 2016 and 2020, total existing supply of Decentralisation of offices away from city

02 purpose-built office (PBO) in Selangor grew the

fastest at CAGR of 5.3%, followed by Putrajaya at
4.5% and Kuala Lumpur at 1.7%
centre to city fringe observed in areas such as
Damansara Heights, KL Sentral and Bangsar
South being preferred choices

Landlords and REIT managers of purpose-built office

03 07
buildings will be increasingly proactive in market Office leases may be getting shorter as office
engagements with various creative marketing users exercise caution to remain agile and avoid
incentive plans and tenant retention strategies to making long-term decisions
ensure occupancy rates are at satisfactory level

Commercial office market will continue to be

04 08
Many tenants are right-sizing and looking for
challenged with downward pressure on
typical floor plates sized between 10,000 sf to
occupancy levels and office rents as landlords
25,000 sf
struggle to retain tenants
KUALA LUMPUR
OFFICE SECTOR
OFFICE SECTOR - SUPPLY & OCCUPANCY
EXISTING SUPPLY KUALA LUMPUR COMMERCIAL OFFICE MARKET RENTAL
Q3 2021
110,000,000 82.0% Q2 2021
80.0%
107.01 MILLION SF 79.7%
80.0% AVERAGE
105,000,000 77.9% 78.3% INDEX
RENTAL
TOTAL 78.0%
140.6

Occupancy Rate (%)

RM5.04 psf

Existing Supply (sf)

(72.1% OCC)
100,000,000 77.6%
76.0%

101.09 MILLION SF 95,000,000

74.0% Q1 2021
AVERAGE
PRIVATELY OWNED 72.0% INDEX
(70.5% OCC) 90,000,000
72.1% RENTAL
70.0% 140.4 RM5.03 psf
5.92 MILLION SF 85,000,000
2016 2017 2018 2019 2020 Q3 2021
68.0%
Source: NAPIC
PUBLICLY OWNED Existing Supply (sf) Occupancy Rate
(99.7% OCC) Kuala Lumpur KL City Fringe
Golden Triangle
NEW COMPLETION & OCCUPANCY RATE Q3 2021
INCOMING SUPPLY NET ABSORPTION (PRIVATELY OWNED) SUPER
GRADE A
Q3 2021 New
Net
Year
Completions(sf)
Absorption (RM PSF)
(sf)
10.00-14.00 GRADE A
10.6 MILLION SF 2016 3,451,369 265,287
(RM PSF)
2017 3,350,996 4,092,822

GRADE A 4.00 – 7.00

PLANNED SUPPLY 2018 132,364 - 415,831

Q3 2021 2019 2,900,387 782,708 71.3% 67.5% (RM PSF)

2020 239,992 343,153 5.00 – 9.00
1.47 MILLION SF 1H 2021 4,483,821 - 427,370
Note: Selected buildings
NEWLY COMPLETED PURPOSE-BUILT OFFICE BUILDINGS

KL City | Jalan P Ramlee KL City | Jalan Tun Razak

Menara Hap Seng 3 Menara TCM
2.89 million sf completed between NLA: 240,000 sf NLA: 370,000 sf
Q1 2020 - Q4 2021

KL City | Jalan Pinang KL City | Jalan Kemuning

Permata Sapura TSLAW Tower
NLA: 671,269 sf NLA: 232,517 sf
NEWLY COMPLETED PURPOSE-BUILT OFFICE BUILDINGS

KL City | Tun Razak Exchange KL City | Jalan Ampang KL City | Jalan Conlay
Menara IQ Menara Great Eastern 2 Plaza Conlay (Tower 1)
NLA: 555,419 sf NLA: 211,698 sf NLA: 610,085 sf

2.89 million sf completed between Q1 2020 - Q4 2021

NOTABLE FUTURE SUPPLY 2022 ONWARDS
2022 2022 2022

KL City | Jalan Hang Jebat KL City | Tun Razak Exchange KL City Fringe | KL Metropolis
Merdeka 118 Menara Affin HQ The MET Corporate Towers
NLA: 1,679, 000 sf NLA: 620,540 sf NLA: 600,000 sf

2022 2022 2023

KL City | Bukit Bintang City Centre KL City | Jalan Sultan Ismail KL City Fringe | Jalan Damanlela
The Stride @ BBCC PNB 1194 Pavilion Damansara Heights Offices
NLA: 394,000 sf NLA: 160,000 sf NLA: 1,284,000 sf
SELECTED MAJOR TRANSACTIONS
APR 2021 APR 2021

RM2.001 billion (RM721 – RM1,452 psf) RM239.10 million (RM705 psf)

IGB Commercial REIT – MVC Office Assets Menara Tan & Tan
NLA: 1,627,989 sf NLA: 339,385 sf

APR 2021 DEC 2020 MAR 2020

RM180.60 million (RM755 psf) RM140 million (RM875 psf) RM242.10 million (RM1,043 psf)
Hampshire Place Office Menara MIDF Guoco Tower
NLA: 239,253 NLA: 160,000 sf NLA: 232,133 sf
SELANGOR
OFFICE SECTOR
OFFICE SECTOR - SUPPLY & OCCUPANCY
EXISTING SUPPLY SELANGOR COMMERCIAL OFFICE MARKET RENTAL
Q3 2021 Kuala Lumpur Cumulative Supply of
50,000,000 75.5% 76.0% Purpose-Built Office Space by Type
46.27 MILLION SF 45,000,000 74.1% Q2 2021
75.5%
74.0%
40,000,000
TOTAL AVERAGE
35,000,000
72.0% INDEX

Existing Supply (sf)

RENTAL

Occupancy Rate (%)

30,000,000
71.6% 124.5 RM4.26 psf
43.87 MILLION SF 25,000,000 70.0%

20,000,000
PRIVATELY OWNED 15,000,000
69.2%
68.5%
68.0%
Q1 2021
10,000,000
66.0%
5,000,000 INDEX AVERAGE
2.4 MILLION SF - 64.0%
RENTAL
2016 2017 2018 2019 2020 Q3 2021 124.8 RM4.27 psf
PUBLICLY OWNED Existing Supply (sf) Occupancy Rate

Source: NAPIC
NEW COMPLETION & OCCUPANCY RATE
INCOMING SUPPLY NET ABSORPTION Q3 2021
Q3 2021 New
Net Absorption
Year Completions
(sf)
(sf)
4.44 MILLION SF 2016 912,983 644,941
GRADE A
PLANNED SUPPLY
2017 1,930,193 1,841,402
(RM PSF)
2018 422,139 492,287
Q3 2021 3.00 – 5.00
2019 1,339,105 1,081,772

2020 1,097,347 120,696

110,608 SF
1H 2021 495,979 462,869 Note: Selected buildings
NEWLY COMPLETED PURPOSE-BUILT OFFICE BUILDINGS

I-City, Shah Alam Section 13, Petaling Jaya

Mercu Maybank
1.094 million sf completed NLA: 290,000 sf
Menara Star 2
NLA: 250,790 sf
between Q1 2020 - Q4 2021

Damansara Uptown Section 13, Petaling Jaya

Imazium Quill 9 Annex
NLA: 450,000 sf NLA: 104,124 sf
SELECTED MAJOR TRANSACTIONS

DEC 2020 NOV 2020 JUNE 2020

RM147 million (RM902 psf) RM45 million (RM551 psf) RM450 million (RM780 psf)
VSQ1 Quill Building 5 The Pinnacle Sunway
NLA: 163,000 sf NLA: 81,602 sf NLA: 576,864
PUTRAJAYA
OFFICE SECTOR
OFFICE SECTOR - SUPPLY & OCCUPANCY
14

PUTRAJAYA COMMERCIAL OFFICE MARKET Kuala Lumpur Cumulative Supply of

EXISTING SUPPLY RENTALOffice
Purpose-Built PERFORMANCE
Space by Type
30,000,000 94.0%
93.1% 93.4%
27.35 MILLION SF 25,000,000
93.0% 2H 2020 1H 2021
92.0%

Occupancy Rate (%)

Existing Supply (sf)
TOTAL 20,000,000
90.6% 91.0%
Suasana PJH
90.8%
15,000,000 90.0%
4.42 MILLION SF 90.1% AVERAGE AVERAGE
10,000,000
89.0% RENT RM PSF RENT RM PSF
89.0% Stable
PRIVATELY OWNED 88.0% GF: 3.00 - 11.5
1F: 3.00
GF: 3.00 - 11.6
1F: 3.00
5,000,000
87.0%

22.93 MILLION SF - 86.0%

2016 2017 2018 2019 2020 Q3 2021
Menara PJH
PUBLICLY OWNED Existing Supply (sf) Occupancy Rate

AVERAGE AVERAGE
Stable
NEW COMPLETION & OCCUPANCY RATE RENT RM PSF (B1-8F)
RENT RM PSF
INCOMING SUPPLY NET ABSORPTION Q3 2021
B1-8F: 5.50 - 6.50 B1-8F: 5.50 - 6.50
9F-12F: 5.00 - 6.25 9F-12F: 5.00 – 5.50
-6.7%
New Completions Net Absorption (9F - 12F)
Year
645,188 SF (sf) (sf)

2016 659,429 393,044

2017 681,785 719,621

Galleria PJH
PLANNED SUPPLY 2018 578,818 - 69,503
AVERAGE AVERAGE
2019 430,007 - 41,290 RENT RM PSF RENT RM PSF
GF: 4.00 - 5.50 GF: 4.00 – 6.05
2020 2,684,840 2,702,718 1F: 4.00 – 5.00 Stable 1F: 4.00 – 5.00
339,547 SF 2F-9F: 5.80 – 6.50 2F-9F: 5.80 – 6.50
1H 2021 - 76,434