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New Straits Times
6 days ago
- Business
- New Straits Times
KL prime office market holds steady in Q2, rents edge up
KUALA LUMPUR: Kuala Lumpur's prime office market held steady in the second quarter (Q2) of 2025, supported by demand for premium, transit-connected and environmental, social and governance (ESG)-compliant buildings, according to Knight Frank. In its latest Asia-Pacific Office Highlights report, it said prime office rents in the city centre averaged RM6.02 per square foot per month, up 2.6 per cent year-on-year and 0.2 per cent quarter-on-quarter, reflecting resilience in a selectively easing environment. The real estate consultancy said the market continues to favour occupiers, with landlords focused on retaining tenants and enhancing offerings to meet evolving workspace expectations. Senior executive director of office strategy and solutions Teh Young Khean said demand continues to gravitate towards Grade A buildings with modern specifications and within integrated developments. "The market continues on a slow and steady trajectory, with a 1.2 per cent improvement in vacancy rates and a 0.2 per cent increase in rental compared to Q2 2025," he said in a statement. In line with trends across Southeast Asia, leasing decisions are increasingly influenced by sustainability targets and portfolio consolidation strategies. Kuala Lumpur stands out for offering best-in-class office specifications at significantly lower occupancy costs than regional peers. Group managing director Keith Ooi said the city offers a compelling alternative for multinational firms re-evaluating their footprint. "As companies seek to optimise costs without sacrificing quality or ESG alignment, the city is well-positioned to meet those needs—at a fraction of the price of markets like Singapore or Hong Kong," he added. Vacancy levels, while currently elevated at 23.4 per cent, are showing signs of stabilisation. This reflects both the volume of legacy stock and the widening gap between older and newer assets in terms of tenant preference. Knight Frank said demand continues to concentrate in premium, well-connected developments. Across the Asia Pacific region, 18 out of 24 cities tracked by the firm recorded stable or rising prime office rents in Q2 2025. New supply added over 1.4 million square metre, but overall vacancy rates remained steady due to strong take-up in India and parts of Southeast Asia. Knight Frank said new completions are expected to add 6.8 per cent to total office stock in Kuala Lumpur this year, sustaining a tenant-favoured environment in the near term. However, the city's cost advantage, estimated at just US$26.70 per square foot annually, and continued infrastructure upgrades are expected to support its appeal to regional occupiers. While rental growth may remain moderate due to supply pressures, Knight Frank said the market is seeing a clear shift toward quality-driven leasing, with well-designed, ESG-ready offices in integrated hubs continuing to outperform.
Malaysian Reserve
11-06-2025
- Business
- Malaysian Reserve
Malaysia emerges as strategic hub for resilient workspaces in South-East Asia
MALAYSIA is increasingly recognised as a key beneficiary of the global real estate transformation, as multinational corporations seek to align their real estate portfolios with operational resilience, sustainability and future-ready workspaces. As corporations globally confront economic volatility, geopolitical risk and the need to rapidly adapt to digital transformation, some 50% of global occupiers expect their footprint to grow in the next 3-5 years, representing over 104 million sq ft of new space. Malaysia, with its maturing infrastructure, trilingual talent pool and expanding industrial corridors, is firmly on the radar, according to a new global report released by Knight Frank (M) Sdn Bhd capturing responses from nearly 300 corporate real estate (CRE) leaders managing over 650 million sq ft of space worldwide. 'Occupiers are cutting loose from legacy portfolios, but they're not abandoning space. 'They're moving to better space and into more locations as they regionalise their portfolios,' Knight Frank partner and global occupier research head Dr Lee Elliott said in a statement. Locally, the statement noted that Knight Frank has seen increasing interest from multinationals looking to establish regional headquarters, high-spec industrial hubs and sustainable logistics solutions in Greater Kuala Lumpur, Johor and Penang. It said the demand is particularly strong among firms focused on advanced manufacturing, technology and regional distribution. Knight Frank group MD Keith Ooi said Malaysia offers the right mix of cost efficiency, political stability and market access that global occupiers are looking for today. 'But what truly sets us apart now is the growing quality of our industrial and office spaces — they're being designed with resilience, environmental, social, and governance (ESG)-readiness and long-term adaptability in mind,' he said in the same statement. Knight Frank's research shows that the top priority for CRE leaders today is enhancing operational efficiency and resilience — cited by 38% of respondents — ranking above ESG compliance or innovation. This reflects a flight to functionality, where occupiers prefer shorter lease terms, hybrid-ready layouts and location strategies built around risk diversification and talent access. — TMR This article first appeared in The Malaysian Reserve weekly print edition
The Star
05-06-2025
- Business
- The Star
Malaysia a strategic hub for future-ready workspaces
Knight Frank Malaysia group managing director Keith Ooi. KUALA LUMPUR: Malaysia is increasingly being recognised as a key beneficiary of the global real estate transformation, as multinational corporations seek to align their real estate portfolios with operational resilience, sustainability and future-ready workspaces. According to Knight Frank's (Y)OUR SPACE 2025 global report, as corporates worldwide confront economic volatility, geopolitical risks and the need to rapidly adapt to digital transformation, 50% of global occupiers expect their real estate footprint to grow in the next three to five years, representing 104 million sq ft of new space. This positions Malaysia firmly on the radar of global investors and occupiers. 'Knight Frank Malaysia has seen increasing interest from multinationals looking to establish regional headquarters, high-spec industrial hubs and sustainable logistics solutions in Kuala Lumpur, Johor and Penang. 'The demand is particularly strong among firms focused on advanced manufacturing, technology and regional distribution,' the real estate consultancy firm said in a statement yesterday. Knight Frank Malaysia group managing director Keith Ooi said that Malaysia offers the right mix of cost efficiency, political stability and market access that global occupiers are looking for today. 'What truly sets us apart now is the growing quality of our industrial and office spaces – they are being designed with resilience, environmental, social and governance or ESG-readiness, and long-term adaptability in mind,' he said. The research shows that corporate real estate leaders are prioritising enhanced operational efficiency and resilience, cited by 38% of respondents, ranking above ESG compliance or innovation. This reflected a flight to functionality, where occupiers prefer shorter lease terms, hybrid-ready layouts, and location strategies built around risk diversification and talent access. About 63% of respondents prioritise purposeful and adaptable amenities over prestige-focused features, underscoring a shift toward practical design and measurable performance. — Bernama
New Straits Times
05-06-2025
- Business
- New Straits Times
Malaysia rises as key hub for future-ready workspaces: Knight Frank
KUALA LUMPUR: Malaysia is emerging as a key Southeast Asian hub for multinational corporations seeking resilient and future-ready workspaces, amid shifting global corporate real estate (CRE) trends, according to Knight Frank's recently published (Y)OUR SPACE 2025 global report. The report highlights that 50 per cent of global occupiers plan to expand their real estate footprint over the next three to five years, driving demand for more than 104 million square feet of new workspace worldwide. It also points out that enhancing operational efficiency and resilience has surpassed environmental, social, and governance (ESG) compliance and innovation as the top focus for CRE leaders globally. Knight Frank partner and head of global occupier research Dr Lee Elliott said companies are shedding legacy portfolios but are not retreating from physical space altogether. "They are moving to better space and into more locations as they regionalise their portfolios," he said. Malaysia's growing prominence is driven by heightened interest in Greater Kuala Lumpur, Johor, and Penang, key regions that appeal to global occupiers, particularly in advanced manufacturing, logistics, and regional headquarters setups. Knight Frank reported increased attention from multinational corporations seeking to establish regional headquarters, high-specification industrial hubs, and sustainable logistics infrastructure within these locations. The group managing director Keith Ooi said Malaysia offers a compelling value proposition for global occupiers. "What truly sets us apart now is the growing quality of our industrial and office spaces — they are being designed with resilience, ESG-readiness, and long-term adaptability in mind," he said. A survey showed that 38 per cent of global CRE leaders prioritise operational efficiency and resilience above other factors — reflecting what the firm describes as a "flight to functionality". This trend indicates a strong preference among occupiers for hybrid-ready layouts, shorter leases, and locations offering diversified talent access. Knight Frank senior executive director of office strategy and solutions Teh Young Khean said the country's value proposition extends beyond traditional cost advantages. "Our strong multilingual workforce, growing tech talent base, and increasing ESG focus make us one of the most versatile markets for regional operations. The flight to quality is real, and Malaysia is ready," he said. Knight Frank director of office strategy and solutions Naythan Chong noted that workplace design is now driven by outcomes rather than occupancy alone. "In Malaysia, we're seeing increasing demand for spaces that are not only efficient but also enable collaboration, culture-building, and tech integration. Occupiers are asking us for spaces that empower teams, not just house them," he said. The report further highlighted that 63 per cent of global respondents now prioritise purposeful, adaptable amenities over prestige-focused features, underscoring a shift towards practical, performance-oriented design. Malaysia's newer commercial properties are also aligning with this shift, increasingly being built to green and wellness-certified standards. Knight Frank partner and global head of occupier strategy and solutions Tim Armstrong said corporations are looking to build in optionality as they commit to new spaces.
New Straits Times
29-05-2025
- Business
- New Straits Times
Malaysia emerges as strategic real estate hub amid global trade shifts
KUALA LUMPUR: As global trade tensions escalate and tariff policies grow more volatile, multinational corporations (MNCs) are recalibrating their real estate strategies—placing Malaysia in a strong position as a preferred investment destination, according to Knight Frank. In its latest regional report, From Whiplash to Resilience: Corporate Real Estate in the New World Order, Knight Frank highlights that sweeping tariffs—some as high as 124.1 per cent on Chinese imports during the Trump administration—have disrupted trade with over 57 countries. As a result, MNCs are moving away from speculative expansion and instead prioritising operational resilience, seeking locations that offer clarity, agility, and fit-for-purpose real estate solutions. Malaysia is emerging as a standout choice, with the report noting its appeal for cost-efficient, adaptable, and future-ready industrial property offerings. While regional peers such as Vietnam and India remain attractive for their scale, Knight Frank underscores Malaysia's strategic flexibility as a key differentiator in today's fragmented global trade landscape. "In today's fragmented trade landscape, Malaysia is proving attractive not because of bold moves but because of its ability to offer reliable, purpose-built industrial solutions that align with the operational demands of modern businesses," said Keith Ooi, group managing director, Knight Frank Malaysia. Knight Frank's research points to a significant uptick in Chinese investment into Malaysia's manufacturing sector, with inflows jumping from RM3.85 billion in 2017 to RM19.67 billion in 2018. This growth is being fuelled by manufacturers seeking supply chain diversification and a hedge against rising costs elsewhere. This trend, recently revitalised by high-level diplomatic engagements such as President Xi Jinping's state visit, reflects growing demand for build-to-suit facilities offering shorter leases, cost transparency, and customisable fit-outs, attributes increasingly sought in the post-pandemic era. Christine Li, head of research for Asia-Pacific at Knight Frank, added, "Malaysia's real estate market has quietly adapted." "We're seeing a shift from rigid 5-year lease terms to more agile, modular structures, especially in suburban industrial zones. These changes cater to SMEs and MNCs alike who are navigating unpredictable tariff regimes." The report stated that government support is also bolstering investor sentiment. Initiatives like the Johor–Singapore Special Economic Zone (JS-SEZ) aim to boost cross-border SME collaboration and enhance logistics, reinforcing Malaysia's positioning as a strategic—not secondary—player in regional economic realignment. While the global outlook remains cautious, Knight Frank sees Malaysia as offering "mixed but promising" potential, thanks to its strong fundamentals, policy clarity, and ability to adapt to shifting regional demand. "Malaysia may not be the loudest player in the room, but its flexibility, policy clarity, and infrastructure readiness are increasingly winning over global occupiers looking for long-term viability, not just short-term arbitrage," said Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank. As global supply chains decentralise, Malaysia's ability to deliver future-fit, agile real estate solutions may well become its most valuable competitive advantage.
