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Pelan Struktur Kuala Lumpur 2020 office rental rate at the UOA building in Jalan Pinang was recently transacted at RM3.80 per sq ft Star Monday July 30, 2007

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Page 1: Rental KL

Pelan Struktur Kuala Lumpur2020

office rental rate at the UOA building in Jalan Pinang was recently transacted at RM3.80 per sq ftStarMonday July 30, 2007

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Kuala Lumpur• Office demand in the CBD and Suburban areas like Petaling Jaya, Damansara Heights,KL Sentral saw dramatic growth, thus resulting a surge in rentals during 3Q 2007.

• A number of second-tier office buildings including Menara Hap Seng and Plaza SeeHoy Chan, have been refurbished by landlord to meet the current booming demandfor offices in 3Q 2007.

• Office demand continued to be underpinned by oil and gas companies and the financialsector. Meanwhile, the Government continues to encourage foreign companies toinvest in its Southern and Northern Corridor which is going to be the new ICT Hubin Malaysia.

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Kuala LumpurThe quality office buildings in Kuala Lumpur are located in the central business district (CBD).

Rents are commonly quoted in Ringgit per sq ft per month on net floor area basis, which are inclusive of service charges but exclusive of government taxes. Capital values are quoted in Ringgit per sq ft.

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there was a lack of Grade A office buildings in the city with most quality buildings recording

tenancy in excess of 90% while rental rates have also climbed to between RM6 and RM9 per

sq ft.

Most quality buildings in Kuala Lumpur are recording tenancy in excess of 90% while rental rates have climbed to between RM6 and RM9 per sq ft

Regroup's latest survey revealed that Grade A office buildings in KL were now 94.5%

occupied with very little space available to accommodate large companies.

“Rental rates are also approaching record levels with the better buildings commanding over

RM7 per sq ft.

“New office supply may not meet demand over the next three years and rents are likely to

continue to rise. If this scenario does not improve, Malaysia is in danger of losing its

competitive edge to other regional cities,” he cautioned.

“The service sector is growing at 9.7% a year, and 200,000 new graduates emerge annually

to find employment. It would be ironic if Malaysia lost out in attracting multinational regional

operations simply through having insufficient quality office space,” he added.

Quah said there was a lot of excitement in the market with a growing foreign and local

interest in the local office market.

The driving forces for the office market include the country's strong economic growth of 6.3%

last year, robust growth of the services sector and a growing demand for prime office space

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by companies in the oil and gas sector, financial institutions and information technology


The City Hall head of urban planning department Mahadi Ngah said the City Hall had since

2005 relaxed the ruling that the development of new office building would only be allowed if it

was meant for own occupancy and now allow up to 50% of the space to be sold or leased

out to other parties.

“There is no blanket freeze on new office buildings now but we look at the application on a

case by case basis. Quality projects that are located in areas zoned for office buildings and

have pent up demand will be allowed.”

StarMonday April 21, 2008

Higher demand for prime office buildings

“Traditionally, yield rates for office space in the Klang Valley are between 6.5% and 6.7%. But in 4Q2007, we saw yield compression rates at 5.05%,” says Sarkunan, referring to the sale of Menara Commerce on Jalan Raja Laut. “The reason for this is simply because investors are willing to take lower returns on their property.”

Lower yield compression means the rental is not moving as fast as the capital value but the current rate of between 5% and 6% is a natural phenomenon in the Klang Valley office space sector, according to Sarkunan. “While the outlook and prospects are positive this year, the lack of premium office space contributes to various movements in selling price and rental rates,” he says.

“More corporate expansions and the country’s strong economic fundamentals are expected to drive the demand for office space the next couple of years, setting the stage for an exciting period, once several new developments, which are currently under construction, are completed.

Glomac Bhd first set the benchmark price of RM1,120 psf late last year when it sold off en bloc its Glomac Tower on Jalan P Ramlee to Prestige Scale Sdn Bhd, a company linked to Kuwait Finance House (KFH), for RM577 million.

A few days later, Mah Sing Bhd’s East Wing of The Icon on Jalan Tun Razak was sold en bloc to KFH-linked Prompt Symphony Sdn Bhd, for RM237 million, or RM899 psf. Then in early January this year, YNH Property Bhd set the highest benchmark price of RM1,230 psf for the sale of its Menara YNH on Jalan Perak, to KFH for RM920 million. The 45-storey office building will have a net lettable area (NLA) of 741,935 sq ft.A local developer, TTDI Development Sdn Bhd, launched and sold en bloc its first tower in the prestigious Platinum Park project in KLCC for RM640.7 million to the Federal

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Land Development Authority, at RM930 psf. The 50-storey building will have a NLA of 689,000 sq ft when completed within the next five years.

After the ground-breaking ceremony on Jan 22, Deputy Prime Minister Datuk Seri Najib Tun Razak disclosed at a press conference that there were offers for the tower at RM1,250 psf.

That itself shows the direction of price movement for prime office space and we can only guess how much TTDI Development is going to lock in for two other Grade A office towers in its development parcel, says Sarkunan.

TTDI Development group managing director Datuk Johan Ariffin disclosed recently that they are having strategic talks with a few parties on en bloc sales for the office towers.“While the KLCC is a preferred choice, there are other sought-after addresses and more competitive locations,” says Sarkunan.

“These include Damansara Heights, Mid Valley Centre and KL Sentral. These alternatives are close enough to the city and are by no means secondary choices.“Newer buildings, better locations with a lesser degree of congestion, and the establishment of supporting infrastructures are some of their attractions.”

For example, KL Sentral is desirable because it’s a transportation hub. Based on the data sampled, Sarkunan says the overall supply of office space in KL city stood at 39.9 million sq ft while decentralised KL had 10.9 million sq ft. Newly-completed UOA Damansara II in Damansara Heights has 400,000 sq ft. Average occupancy rate (AOR) is generally increasing with office space in the central business district (CBD) recording the highest growth rate of 11%, jumping to 88% from 77% within a period of one year, q-o-q.

Golden Triangle properties saw an increase of 8%, up 96% from 88%, while office space in Damansara Heights recorded a 7% jump to 96% from 89% q-o-q. Overall, AOR for all Prime A offices in the data sampled rose 8% to an average of 93% from 85% q-o-q.In terms of average rental rate psf, prime office space in Damansara Heights recorded a jump of 23.4% q-o-q. From the data, average rental is RM5 psf, a 95 sen increase, in Damansara Heights.

Second highest was Prime A offices in Golden Triangle which saw rates increasing 14.2% or 71 sen over a period of one year.

Offices in CBD rose 12.9% or 50 sen while Prime A+ offices went up 12.3% or 95 sen q-o-q.

“While rental rates have consistently gone up, they moved rather slowly compared to capital values,” says Sarkunan.

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Among the buildings in the data sampled in the Golden Triangle (Prime A+) were Menara Citibank, Menara Maxis and Petronas Twin Towers, while Menara IMC, Kenanga International, Kompleks Antarabangsa and Menara Standard Chartered came under the Prime A category.

In CBD, the buildings were Menara Multipurpose, TH Perdana, and Wisma Hamzah-Kwong Hing, while Prime A buildings in Damansara Heights include UOA Damansara II and HP Tower, and Setia One and Wisma Chase Perdana for secondary grade.Sarkunan says secondary office space’s AOR improved steadily quarterly from 83% to 91% (Golden Triangle), 66% to 80% (CBD), and 86% to 92% over the period of one year.

He adds that rental rates for secondary office spaces are also on an upward pressure.“Investment demand will continue to drive the increased interest for prime office buildings in KL city and decentralised KL,” says Sarkunan.

“Yield will be compressed as investors compete for good quality investment grade offices.”

This entry was posted on Monday, March 10th, 2008 at 9:37 pm

1. on 07 Apr 2008 at 15: 32.19   kansai

To All Those Concerned,

It was really surprising to note that there are such ignorant people living in Malaysia who thinks that they are so well versed in Islam.

Islam by itself is a very tolerant and diverse religion. I have been living in the Arab Emirates for the past 2 years and was really surprise to reveal that the Muslims here are more libereal than most in Malaysia.

For example, there was one occassion when I was dining at a Japanese Restaurant in Abu Dhabi. When I was browsing through the menu I was shocked to see Pork in its menu. So I rudely asked the Arab guys sitting next to me; “Is it ok for you guys to eat here? reason being, they serve pork on its menu”. To my surprise, they answered; “yes. why not. they serve pork but I am not eating pork”. So I rebuted and said; “but its cooked and cut along with the same utensils”. And they reconfirmed that it is ok as long as they are not eating it.

I hope the Muslims in Malaysia are not trying to imply that they are better Muslims than those in the Arabs.

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Let’s not play up such issues and be more focus in rebuilding this wrecked nation. YAB Teresa, I urge you to ignore such comments by shallow minded individuals.

Once again, congratulations to your victory in the GE 2008 and all the best in your endeavour.

Global Real Estate Market : Annual Review & Forecast 2008 – Newark Knight Krank

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CB Richard Ellis Research Q3 2006

Research Rahim & Co. 2008

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Malaysia's Paos Buys Kompleks Selangor, Hotel Block in KL

KUALA LUMPUR, Oct 17 Asia Pulse - Paos Holdings Berhad (KLSE:5022) is acquiring Kompleks Selangor, a 16-storey

hotel block previously known as Hotel Furama, and a single level basement car park in the heart of Kuala lumpur for

RM48 million (US$14.2 million) cash.

On Oct 12, Alpine Legacy (M) Sdn Bhd (ALSB), a wholly-owned subsidiary of PAOS, signed an agreement to acquire the

assets from Prestige Realty Sdn Bhd, Paos said in a statement to Bursa Malaysia.

It said the acquisition will be financed through internally-generated funds and/or bank borrowings, if required.

Kompleks Selangor comprises a 3-storey podium block of retail space together with a 13-storey office block. It has a net

lettable floor area of about 46,104 sq ft and 21,872 sq ft for the 13-storey office block and 3-storey retail podium,


The amount of lettable space still available for letting for the office block and retail podium are 14,628 and 920 sq ft,


Paos said the occupancy rate for the office block and retail podium is 68.27 per cent and 95.79 per cent as at 10 October

2007, respectively.

The rental income for the office block and retail podium per month is about RM156,312 as at 10 October 2007.

The hotel block, which was previously operated and known as Hotel Furama, consists of 101 saleable guest rooms with

facilities such as functions room and a cafeteria. It has ceased operations since 2005.

There are about 48 car park bays located at the basement level and 10 car parks bays sited at the rear portion of the


The rental income for the car park based on nine months average period from January to September 2007 is about RM


Paos said the purchase consideration was arrived at on a willing-buyer willing-seller basis after taking into consideration

the fair value of the property of RM50 million as valued by Messrs Rahim & Co Chartered Surveyors Sdn Bhd.

Paos said the board does not expect to undertake any major renovation and/or refurbishment work on the property, or to

revive the hotel business, after the acquisition by the current financial year ending 31 May 2008.

The statement said the acquisition of the prime hotel cum office block will provide the PAOS group with a steady stream of

rental income, which will strengthen and broaden its earnings base.

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"It is envisaged that with the strategic location of the Property and the demand for strategic office space, ALSB will be

able to enjoy favourable rental rates which are expected to contribute positively to the future earnings and cash flow of the