KL’s prime office market continued to improve in 1Q2025 — Knight Frank

• Moving forward, Knight Frank said Malaysia’s office sector is projected to remain stable over the next 12 months, with the tenant-favourable market environment expected to persist, as businesses reassess long-term space needs and embrace more flexible, future-ready office strategies.

KUALA LUMPUR (April 29): Kuala Lumpur’s prime office market continued to improve in the first quarter of 2025 (1Q2025), with prime office rents holding steady at RM6.01 per square foot per month, said global property consultancy Knight Frank.

In a statement, it said that prime office demand is supported by ongoing flight-to-quality leasing and expansion by tech firms and multinational corporations. 

Knight Frank senior executive director of office strategy and solutions Teh Young Khean said the decreasing vacancy rates since 4Q2023 imply that the office market is getting better and more resilient.

“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).

“The stable political and economic environment is one of the main catalysts for business expansion, especially in the services sector,” he said.

Moving forward, Knight Frank said Malaysia’s office sector is projected to remain stable over the next 12 months, with the tenant-favourable market environment expected to persist, as businesses reassess long-term space needs and embrace more flexible, future-ready office strategies.

With an annual change of 2.6% and a quarterly increase of 0.8%, Kuala Lumpur’s office market is showing signs of steady and measured recovery, it said.

“However, high supply levels and evolving workplace expectations may continue to weigh on 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,” it said.

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