Malaysia seen to face office space glut<\/p>\n
KUALA LUMPUR (AFP): The Malaysian property market is expected
\nto face a glut in the office and retail sectors following the
\ncompletion of some major projects this year, analysts said
\nyesterday.<\/p>\n
\"The office sub-sector is set for an oversupply situation,
\nwith more than 10.5 million square feet (900,000 square meters)
\nof new office space flooding Kuala Lumpur this year,\" Victor Wan,
\nproperty analyst with South Johor Securities, told AFP.<\/p>\n
The mammoth Kuala Lumpur City Center project will be the
\nlargest office space supplier offering four million square feet
\n(360,000 square meters), Wan said.<\/p>\n
The project's landmark 88-story Petronas Twin Towers owned by
\nstate oil company Petroliam Nasional Bhd. is slated to be ready
\nby the third quarter of this year.<\/p>\n
Another 8.7 million square feet (783,000 square meters) of
\noffice space will be made available next year, increasing total
\noffice space in 1998 to 70. 5 million square feet (6.35 million
\nsquare meters), he added.<\/p>\n
Rentals are expected to ease, with rates for prime office
\nspace moderating from six ringgit (US$2.4) to around four ringgit
\n($1.6 dollar) per square foot (0.09 square meters), Wan said.<\/p>\n
The retail property market in Kuala Lumpur is witnessing a
\nshift to suburban development with a focus on leisure, said Zaki
\nSaid, executive chairman of property consultant Raine and Horne
\nInternational Zaki and Partners.<\/p>\n
Supply of retail space in the city center is expected to
\nalmost triple to 9.528 million square feet (857,520 square
\nmeters) by 1999 from 3.34 million square feet (300,600 square
\nmeters) this year, Zaki told a seminar on the property outlook
\nfor 1997.<\/p>\n
The bigger supply will lead to lower or more competitive
\nrentals, he said.<\/p>\n
\"Large volume of foreign tourists to Malaysia and increased
\nspending in the Malaysian market will be the antidote towards the
\nimpending glut of shopping centers,\" he added.<\/p>\n
Zaki dispelled fears of a slowdown in the property market
\nafter the end of the 1998 Commonwealth Games here as the sector
\nhad defied the norms by recording eight straight years of
\ncontinuous growth.<\/p>\n
\"The property market is the last to suffer during hiccups of
\nthe economy,\" he added. Builders are rushing to complete some
\nmajor projects to tie up with the 1998 Commonwealth Games to be
\nhosted by Kuala Lumpur.<\/p>\n
\"Overall, we expect the property sector to be mixed this year
\nas buyers become more selective and more affluent,\" another
\nanalyst said.<\/p>\n
With the moderating interest rates, low-to-medium cost housing
\ndevelopers with projects in well located areas will benefit the
\nmost, he said.<\/p>\n
But demand for high-rise residential units and \"lifestyle\"
\nproperties would remain lukewarm due to increasing supply.<\/p>\n
Chief executive officers (CEOs) polled by property consultant
\nCH Williams, Talhar and Wong (WTW) said the overall Malaysian
\nproperty market was likely to consolidate this year.<\/p>\n
A \"majority of the CEOs believe the property market in 1997
\nwill be stable, except for concerns over a surplus in the
\noffices, apartments, country homes, hotels and golf resort sub-
\nsectors,\" said John Loh, managing director of WTW.<\/p>\n
Most of the chief executives ranked interest in the
\nconventional housing sector including bungalows first among local
\ninvestors while the industrial sector was ranked top among
\nforeign investors, Loh said.<\/p>",
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