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PETALING JAYA: The Kuala Lumpur office property market is facing a period of adjustment in rental rates for Grade A office space in the city’s Golden Triangle. It will also experience a period of consolidation and stabilisation of average asking rents, which may well last until 2013.
Retail and office property owners should therefore strive to maintain their properties’ capital values in the long term, said Regroup Associates chairman Christopher Boyd.
Office building owners can achieve this by “’locking in” tenants to preserve cash flow, he said at a forum entitled “Outlook for Retail and Commercial Sectors: Are We Becoming Overbuilt?” at the National Property and Housing Summit 2009 organised by the Asian Strategy and Leadership Institute on Oct 20.
“Office building owners should try to look after their tenants by negotiating longer tenancies at reduced rents,” said Boyd, adding that owners should also offer better building management.
As for the retail sector, Regroup Associates managing director Allan Soo said the general market outlook in 2010 will be poor as tenant demand for space will be weak in the face of a saturated market in terms of new supply, he said.
Established shopping centres, however, will fare better with firmer rent values and stable occupancy rates of above 90%.
According to Soo, retail centres should differentiate themselves to counter the growing disinterest from consumers facing homogenous retail offerings. “Developers of newer projects should also consider more innovative projects,” he said.
He recommended that retail centre owners should give older buildings a facelift, spend more on consumer behavioural research, find richer tenants, have more tenant meetings and improve their advertising and promotions.
