Leasing activity surges, signaling robust rebound in demand

• With tech and finance sectors driving demand, leading companies explore renewals and new building options as financial institutions are gravitating towards the TRX area, fostering a new financial district and attracting businesses to this prime location.
• Flexi-space momentum grows as operators expand. Collaborations between operators and building owners increased, featuring profit sharing and shared capital expenditures. These partnerships meet tenants’ needs, offering adaptable solutions in a changing work environment.

One new completion was offset by strong demand, leading to improved vacancy rates

• The newly completed Sunway Square Tower 2 is positioned to meet the high demand in Bandar Sunway, leveraging excellent BRT public transportation networks. This development further cements Bandar Sunway’s status as an established office cluster.
• Landlords adopt innovative strategies in a tenant’s market. The MET Corporate Tower exemplifies this, reimagining workspaces as third spaces, blending work, leisure and lifestyle. This creates versatile areas, appealing to tenants seeking more than traditional offices.

Capital value holds steady, despite improvement in rents

• Rents showed mixed trends across submarkets. Higher-spec buildings increased rates, while unoccupied and aged buildings in less established areas maintained or adjusted rates. This diverse approach aims to establish market presence and enhance competitiveness.
• Capital value held steady as investor appetite remains cautious with a measured approach to new investments. Investment volume remains low as local investors have demonstrated a clear shift towards owner-occupied assets, rather than as an investment.

Outlook: Quality, sustainability and flexibility will lead the way

• A sustainability focus drives demand for green buildings with strong ESG credentials, which raises rents. Workspaces evolve with rapid tech innovation, emphasising eco-friendly design and adaptability to meet changing business needs.
• Continuous repurposing of aged stock and significant Asset Enhancement Initiatives (AEI) to remain competitive in the market. Investors will remain selective, focusing on prime assets with strong occupancy and income stability.