ASIA PACIFIC OUTLOOK 2025

KUALA LUMPUR

KEY MESSAGES

Supply

Demand

Rents

Key Outlook

Greater Kuala Lumpur is expected to see continued upward pressure on vacancy rates due to the substantial pipeline of new office space.

Greater Kuala Lumpur's total office supply stands at approximately 145.75 million sq ft, with a significant addition of around 2 million sq ft expected by 2025 via five new projects. Major new developments present opportunities for occupiers considering relocations or leverage for renewals. A steady flow of new supply since 2021 has outpaced demand, intensifying competition among landlords, but is now forecast to decline after 2026.

Demand continues to shift towards high-quality and sustainable buildings, with a marked preference for properties certified by the Malaysian Green Technology Corporation. The market shows a flight-to quality trend as tenants move from older properties to newer, well-located buildings with modern amenities. As a result of strong demand being offset by large volumes of new supply, vacancy is expected to remain stable at 27% by the end of 2025 and then to largely track sideways.

Grade A office rents remain stable, with an average of RM6.06 per sq ft per month and a year-on-year change of 0.5–1.5%. Rising operational costs and abundant new supply are causing landlords to adopt a cautious approach to rent increases. Rental trends reflect stable rates with increased competition among prime office spaces, especially those offering green certifications.

Tenants' focus on sustainable, quality buildings will likely drive demand in well-located submarkets.

The market’s trajectory points to ongoing competitive landlord incentives as they adapt to meet evolving demands for quality and flexibility.

Cushman & Wakefield

ASIA PACIFIC OUTLOOK 2025