Economy

On the back of a global pandemic, political uncertainty in Malaysia, oil price volatility and the US-China trade war, many business sectors have taken a heavy toll. The country’s GDP fell by 2.7% in Q3/2020, after a double-digit contraction of 17.1% in Q2/2020, with unemployment hitting an all-time high of 5.7% in May 2020. Conditions have improved somewhat since, as employment declined to 4.7% in Q3/2020 when the government gradually relaxed movement restrictions, with most businesses resuming at least partial operations since early June 2020, guided by the standard operating procedures (SOPs) mandated by the government. At time of writing, most companies are still practicing flexible work arrangements, given that offices are only able to accommodate fewer employees due to physical distancing rules. 

New Supply

Office stock in Greater KL expanded to 132.9 million sq ft, while the cumulative supply in Kuala Lumpur (a subset of the Greater KL market) totaled 89.2 million sq ft in Q3/2020. This is marked by the completion of four medium-scale office buildings (of NLA <300,000 sq ft), totaling approximately 0.86 million sq ft, of which only one, Menara Hap Seng 3, is within Kuala Lumpur. The others, namely Sumurwang Tower, Menara Star 2 and Beta Office Suites at Pacific Star Commercial Hub in Petaling Jaya, are all in Selangor (another subset of the Greater KL market).