ACCORDING to the Valuation and Property Services Department's third quarter 2007 (3Q07) commercial property stock report, the total existing stock of purpose-built offices in Kuala Lumpur stood at 372 properties with 65.04 million sq ft of space and an 83% occupancy rate.

The report noted that with the completion of one building with 272,434 sq ft of space in 3Q, there was a further 17 properties with 8.02 million sq ft of space that were under construction. Planned supply for the quarter stood at 14 properties with about 12.36 million sq ft of space.

In the Golden Triangle area that encompasses those streets nearest KLCC, there were a total of 44 properties with about 9.40 million sq ft of space and an occupancy rate of 82.1% while in the Jalan Ampang area comprising those streets neighbouring KLCC, there were 23 properties with 8.28 million sq ft of space. The occupancy rate for the area was 88.9%.

One property with 106,778 sq ft was under construction in the Golden Triangle while planned supply for the area stood at two properties with a total of 692,560 sq ft.
CH Williams Talhar & Wong Sdn Bhd noted in its 3Q report last year that a number of properties would be completed in the KLCC area next year and in 2010.

These purpose-built offices include The Icon along Jalan Tun Razak, Goldis Tower in a corner of Jalan Ampang and Jalan Tun Razak, Glomac Tower along Jalan P. Ramlee, Menara Yu Neh Huat along Jalan Sultan Ismail, the office component of Lot C in KLCC and the office components of Platinum Park along Jalan Stonor.

The property consultancy said the healthy demand coupled with tight supply would augur well for the prime office market in the short term. It added that “interest from foreign investors and institutions continue to be strong for investment-grade offices.”

In its property market review for the first half of 2007, Regroup Associates Sdn Bhd said: “KL is experiencing an unprecedented level of interest from local and overseas investors for good quality office investments to buy.”

It said the reasons for this were the Securities Commission's revised guidelines for the establishment of REITs, a policy shift in which government institutions such as the Employees Provident Fund could invest in commercial property, and demand from opportunistic funds and foreign REITs.

At that time, the property consultancy had said that based on its subjective view, the value of Grade A office space would probably rise to some RM900 psf over the next two years.

Certain yet-to-be-completed properties in the area have already surpassed this figure at the end of last year. Glomac Tower was sold by Glomac Bhd to Kuwait Finance House (M) Bhd for RM577mil or RM1,120 psf while part of Menara Yu Neh Huat, which is located further away from the KLCC area, was sold to the same company by YNH Property Bhd for RM920mil or RM1,230 psf