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- Speaking at the launch of JLL Malaysia’s 2Q2024 Greater Kuala Lumpur (KL) Property Market Monitor on Wednesday, JLL Malaysia managing director Jamie Tan said that the upward price trend for both primary and secondary markets is due to inflation, as well as the rising of construction cost and building material prices.
KUALA LUMPUR (Aug 7): Greater Kuala Lumpur’s residential market experienced an upward trend in 2Q2024, recording higher average transacted prices than the pre-pandemic year in 2019. The trend is expected to continue through the end of the year, according to JLL Malaysia managing director Jamie Tan.
Speaking at the launch of JLL Malaysia’s 2Q2024 Greater Kuala Lumpur (KL) Property Market Monitor on Wednesday, Tan said that the upward price trend for both primary and secondary markets is due to inflation, as well as the rising of construction cost and building material prices.
For apartments and condominiums, the highest price per square feet (psf) was recorded in Batu at RM499.93 psf in 1Q2024, compared to RM483.27 in 2019. The overall average price psf for all the districts was RM397.40 psf in 1Q2024, compared to RM380.18 psf in 2019.
For two-storey terraced houses, the highest price psf was recorded in KL and Batu, whereby KL recorded RM622.87 psf in 1Q2024, compared to RM578.51 in 2019, while Batu recorded RM521.54 psf in 1Q2024, compared to RM493.93 psf in 2019. The overall price psf for all the districts was RM473.42 psf in 1Q2024, compared to RM381.97 psf in 2023.
For context, Greater KL refers to the area that stretches from Kampung Datuk Keramat in the east, Subang Jaya in the south, Shah Alam in the west and Sungai Buloh in the north, while JLL Malaysia’s data cover the old and new stocks of secondary and primary markets. The team segregates the transacted prices according to the different districts, including Petaling, Batu, Damansara, Klang, Bandar Shah Alam, Ampang, KL, Setapak, Subang Jaya and Cheras.
Meanwhile, JLL Malaysia chief growth officer Christophe Vicic said Malaysia’s data centre trend has also witnessed a boom in 2Q2024, following several land acquisition deals made by local and global investors. Vicic added that Johor and Greater KL have witnessed a continued increase in data centre investments in 1H2024.
“In Johor, we have the highest concentration of data centres. We are currently having projects already being built and coming into the market by the end of next year. These projects have a combined total of about 900MW (Megawatts)(of capacity), comprising global operators. An estimated 95% of these capacities already have ready tenants,” he noted.
Vicic added that Johor has done very well, as it has started to think about developing and housing data centres in the long run. “Some of the data centres that are being built now are using the latest technologies, for example, transitioning from using air cooling to liquid cooling, as it is much more efficient. Also, like office buildings, there are a whole array of sustainable features like having a rainwater harvesting system to reuse water, reducing heat transfer for cooling, and using power management systems. Some of the newer data centres also use something called adiabatic cooling.”
Although data centre investors are still looking for land in Johor, Vicic said there is also interest in the Klang Valley. “These investors [in the Klang Valley] are what we call the big boys, where they don’t only build a data centre but an ecosystem. Recent news have reported that these companies are looking to build campuses like a Google city or Amazon city, with data centres, laboratories, training centres, research and development centres, and more. These investments, in the long run, would translate to Malaysia’s development in terms of the economy and job opportunities.”
For the country’s northern areas, Vicic said it is still early to predict their performance in attracting data centre investors. “There are questions such as land availability and requirements by the clients. Speed of transmission, latency, land and power availability are all trends that push the end of technology, where you want to be closer to your customers. Hence why Malaysia is so successful, in addition to having a good talent pool, stronger government incentives and increased initiatives to move towards green energy.”
For the office sub-sector, JLL Malaysia office leasing advisory Quiny Lee said the overall market trend in KL is experiencing a positive demand.
“There has been a significant increase in net absorption this quarter, indicating a growing interest in leasing office spaces. It reflects the growing awareness of ESG (environmental, social, and governance) and opportunities in the confidence in the local economy, and showcases a thriving business environment. Positive market demand in the Kuala Lumpur City, Kuala Lumpur Fringe and decentralised areas reflects the steady growth of the local economy, and increasing business confidence.”
Lee added that rental rates in KL city have experienced the most significant increase in the current quarter, followed by the decentralised areas and KL fringe. The average rental growth in all three areas recorded an increase of 8.8% year-on-year from 2Q2023 to 2Q2024.
“The rise in rental rates can be attributed to the strong market demand for high-quality and sustainable office spaces. Landlords recognise the value of green-certified buildings and are willing to raise rental rates to align with the growing preference for quality and sustainability,” she added.
For the industrial subsector, JLL Malaysia logistics and industrial division team leader Derek Yap said the market saw a slowdown in demand in 2Q2024. “This is due to an increase in operational costs and cautious expansion strategies. Despite that, there is still demand for high-quality and sustainable warehouse spaces. The ongoing China Plus One strategy has also encouraged international companies to expand their operations in Malaysia.”
He added that the outlook for the industrial sector remains positive, with strong demand expected from the electronics and electrical, automotive, as well as oil and gas companies.
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