KUALA LUMPUR’S prime office market continued to strengthen in the first quarter of 2025, with rents holding steady at RM6.01 per square foot per month, supported by resilient demand from technology companies and multinational corporations, according to global property consultancy Knight Frank.
In its latest update, Knight Frank attributed the market’s improved performance to a sustained “flight-to-quality” trend, with occupiers seeking higher-grade office spaces in well-located and modern buildings.
Teh Young Khean, Senior Executive Director of Office Strategy and Solutions at Knight Frank, noted that falling vacancy rates since the fourth quarter of 2023 indicate improving resilience in the sector.
“Healthy take-up in the market has enhanced the performance of prime office buildings. The Kuala Lumpur office market has performed better and no longer has the highest vacancy rate in Asia-Pacific (APAC),” he said.
“The stable political and economic environment is one of the main catalysts for business expansion, especially in the services sector,” Teh added.
Looking ahead, Knight Frank projects continued stability in the Malaysian office sector over the next 12 months. The firm expects the current tenant-favourable conditions to persist as companies reassess their long-term space requirements and adopt more flexible and future-ready workplace strategies.
Kuala Lumpur's office market recorded a 2.6 per cent year-on-year increase in rents and a 0.8 per cent rise quarter-on-quarter, signalling a measured and steady recovery, the report said.
However, Knight Frank cautioned that a high level of new supply and shifting workplace expectations could continue to limit rental growth.
“Occupiers are likely to prioritise flight-to-quality strategies while landlords may focus on improving building specs and sustainability features to remain competitive in an increasingly discerning market,” the firm added. - April 29, 2025
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