I posted this a few days ago. Office space Klang Valley: Too many, thus prices on downtrend (click to read yeah) A friend said that comparing Kuala Lumpur versus Singapore or Hong Kong is not apple versus apple. These two are much more advanced cities than Kuala Lumpur. Erm… does that mean cities like Manila, Phnom Penh, Jakarta and Bangkok are better comparisons instead? Except for Phnom Penh, I have been to all these other cities and I must say that Kuala Lumpur is quite impressive with our latest MRT network as well as the LRT and expressways. However, our office rental is lower…
Or perhaps all these other cities which are more expensive is because somehow they are more popular while Kuala Lumpur is just not so popular? By the way, if popularity is due to foreigners and prices go up because of them… be very careful yeah. These are the people who could leave, just like that. I am not so sure if these are the investors we love to have yeah. Below is an image of Asia-Pacific prime office rental by Knight Frank, Savills. The original article in TheStar.com.my here for reference.
Don’t worry too much about any office rental cycle. Please worry more on the economy. If the economy does not grow much, then even a small new supply of offices will be a huge drag on the rental. Many of these newly completed offices may reduce their rental and the older offices may have to hold on for a while. Be realistic, if the rental is almost the same, I will rent a newly completed office instead of an old 15-year old tower for example. Attracting the millennial workforce to join will be far easier too. Old buildings is a no-no for these younger workforce yeah.
However, if the economy moves and businesses are confident with their expansion, then Kuala Lumpur’s current low office rental and a huge supply of offices is an advantage which many other cities do not have. The government needs to do more to drive investments into the country. Make it as attractive as possible to all the MNCs. Malaysia can be the heart of ASEAN. Yeah, as a Malaysian, I just prefer to see things from my perspective yeah. In this regard, I am not too different from a Singaporean or a Thai who sees their countries as the best instead of another country. Happy understanding.
written on 14 Aug 2019
<Featured Image is courtesy of Stock Photos from khlungcenter>
Next suggested article: Retail and Office Supply Kuala Lumpur, an update.