KUCHING: Malaysia’s office sector has seen purpose-built offices retain its position as the preferred choice for major corporations, specifically in the main markets such as Kuching, CH Williams Talhar & Wong (WTWY) says, while in other locations, shop offices stayed dominant for business activities.
In its Property Market 2015 report, WTWY said that the purpose-built office sector in Kuching remained stable and vacancy rates are generally low at 10 per cent or so, with most office spaces being occupied by the government and government linked companies.
WTWY noted that in Kuching, there were no new office buildings completed in 2014, although there were a few new buildings for showrooms.
It futher noted that current supply of office space in Kuching remained at around 4.5 million square feet (sq ft) with one four-storey office building formerly housing the Koperasi Central Bank, being converted into a boutique hotel.
“The Dayak Plaza, which has been under construction for quite some time, is still not completed yet,” it said in the report.
“However, a few office buildings were launched within mixed developments, such as Baitul Makmur, Tabung Haji Complex and office tower @ Gala City.”
According to WTWY, Baitul Makmur at Bukit Siol in Petra Jaya will be 18 storeys high with two basements, to be annexed to the existing Baitul Makmur.
WTWY noted that Tabung Haji Complex will be a 10-storey hotel cum office complex, with a proposed office floor space of 17,300 sq ft, which is expected to be completed by 2017.
It further noted that Gala City’s office tower is a 6-storey building with an estimated area of 13,000 sq ft selling for about RM460 per square foot (psf).
WTWY noted that the office sector in Kuching is less exciting with rental yields maintained at five per cent to six per cent and rentals remaining stagnant at RM2.80 to RM3.00 psf or even less for those outside the central business district (CBD).
“There was also no new office building transactions in 2014,” WTWY said.
“The office sector is expected to remain docile for 2015 with expected additions to the sector only after 2015.”
In Bintulu, WTWY noted that the shop office sector remained stable with most developments concentrated in suburban areas such as the Kidurong area.
It further noted that the average price of shop offices is RM1.1 million, and the rental rate has increased slightly to RM3,800 per month.
As for Miri, WTWY said that sales of existing shophouses/offices was slow.
“However, a number of upcoming developments are under construction,” it added.
On the other hand, WTWY noted that Sibu saw no significant improvement in demand for shophouses in secondary locations.
“Generally, the oversupply of shophouse/shopoffice has become obvious as take up rates for new launches and occupancy rates for existing shop offices were low.
“This has driven developers to delay their new launches and slow down construction of ongoing projects,” it said.
It further noted that alternatively, developers also reduced sale targets but maintained their selling prices for new
launches.