Despite hybrid work trends, rising interest rates, and overall economic uncertainty continuing to cloud the future of commercial buildings, The demand for commercial property (e.g. retail and office space) is expected to increase this year.
Chan Wai Seen, CCO & Associates (KL) Sdn Bhd ED said the overall occupancy rate is estimated to be about 71% and 75% respectively, for purpose-built offices and shopping complexes.
Occupancy rates of the commercial buildings records the WORST during the Covid-19 pandemic
Occupancy rates of the commercial buildings were at their worst during the Covid-19 pandemic and many commercial buildings are recovering with the easing of the Covid-19 standard operating procedures and reopening of the economic sectors, Chan Wai Seen added.
Barring any unforeseen circumstances, commercial buildings located at strategic locations and are well-maintained should record improvements in 2023.
Occupancy rates of the commercial buildings will RISE after the Covid-19 pandemic
Meanwhile, Dr Consilz Tan from Centre for Market Education research said there is a continuous increase of total office space from the first half of 2019 (1H19) to 1H22 but with steady growth of occupied space in the same period of time.
She noted that this has made the occupancy rate drop from 82.4% in 1H19 to 77.6% in 1H22.
However, we have seen increase in occupancy rate for purpose-built office from 70.8% to 71.1% from the second quarter of 2022 (2Q22) to 3Q22, but a slight drop in occupancy rate for shopping complex from 75.7% to 75.2% from 2Q22 to 3Q22.
This might be a good sign of economic recovery from the Covid-19 pandemic where the market is picking up,” said Dr Consilz Tan.
Tan also opined that most old, vacated buildings can be converted into green buildings to attract big corporations who are willing to pay higher rent for green buildings.
Read more: The Malaysian Reserve
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