Knight Frank, the independent global property consultancy, has released its Asia-Pacific Prime Office Rental Index for Q1 2022.
The index is up 0.8% quarter-on-quarter (QoQ), after rising by 0.3% in the preceding quarter, indicating that economic recovery is sustained from Q4 2021, despite a turbulent Q1 with accelerating inflation and the Russian invasion of Ukraine weighing down on market sentiment. The overall index is up 0.2% year-on-year.
According to Teh Young Khean, executive director of office strategy and solutions, Knight Frank Malaysia, “The pace of recovery in the office sector will continue to pick up this year in tandem with the uptick in economic activities and improved business sentiments.
He said that the demand for space is expected to increase with more workers returning to the office and as organizations firm up their physical workplace planning. “Endemic trends indicate that organizations opting for hybrid work models are likely to see several advantages, hence having good infrastructure and facilities to support the new way of working is crucial,” he said.
Judy Ong, executive director of research and consultancy, Knight Frank Malaysia, further elaborated, “the office market, however, remains tenant-led as existing and incoming supply continue to outpace demand.
She said that an estimated 495,850 sq m of space is scheduled to enter the Kuala Lumpur market by the end of 2022 and this will continue to exert pressure on rentals. Notable upcoming completions include Merdeka 118 Tower, PNB 1194, Felcra Tower, Aspire Tower @ KL Eco City, and The MET Corporate Towers.”
Tim Armstrong, global head of occupier strategy and solutions, Knight Frank, said: “Optimism at the start of the year was tempered by multiple resurgences of COVID-19 which resulted in Hong Kong and several tier-1 Chinese Mainland markets re-tightening movement restrictions.
