MARKET OVERVIEW

Strata offices are commercial developments subdivided into units, floors, and provisional blocks for sale. Each strata unit parcel and block comes with its own strata title, granting owners indefeasible ownership of the stratified property. Apart from instilling a sense of ownership, stratified offices also offer various benefits to owners. These advantages include naming rights for provisional blocks, the opportunity to establish a highly secure workspace through enhanced security systems, and the flexibility of space usage. Owners can occupy or lease the strata office space for rental income. This model also provides a lower entry point for small and medium-sized enterprises (SMEs) to own office space. In contrast, strata units commonly face challenges in controlling the building’s tenant pool, management, and maintenance activities.

In Malaysia, the management and maintenance of common properties, such as shared facilities and amenities in strata commercial buildings, are regulated by the Strata Management Act 2013. This Act outlines the duties of the Management Corporation, consisting of elected owners, formed upon subdivision of the building.

Historically, the first wave of strata office developments in Greater KL, constructed between the 1970s and 1990s, had an average net lettable area of 200,000 sq ft, with a relatively subpar management and maintenance quality. This can be attributed to the strata parcel owners’ lack of appreciation for building upkeep and maintenance, as well as the absence of legal provisions to regulate and enforce building management duties. Consequently, this led to a concentration of older Grade B and C strata office buildings in Greater KL.