Survey: Cost of KL office space still competitive


  • Business
  • Wednesday, 07 Jan 2004

By ANGIE NG

KUALA Lumpur continues to remain competitive, ranking 107th globally in terms of office accommodation costs per workstation, according to an annual survey compiled by international property advisers DTZ Debenham Tie Leung. 

The global office occupancy costs by DTZ Research are a guide to accommodation costs in major prime office locations. The 2004 report covers 111 business districts in 43 countries worldwide, with additional prime office locations such as Philadelphia, San Diego, Dubai and Bangalore. 

Kuala Lumpur's overall occupancy cost was stable at US$2,025 per workstation per annum, the fifth cheapest in the Asia-Pacific, while Singapore was listed as the 16th most expensive location in the region. 

Globally, Singapore was ranked 86th, and Kuala Lumpur 107th compared with 106th last year.  

DTZ Nawawi Tie Leung Sdn Bhd executive director Brian Koh said Kuala Lumpur's office occupancy costs ranking continued to make it attractive as a low-cost base for regional headquarters to tap opportunities in Asia. 

“This affordability, together with the pool of English speakers and excellent infrastructure, should be attractive for multinational corporations to base their regional headquarters in Malaysia to enhance their presence in the region,” he said. 

The report said while the US economy continued to show signs of recovery, the performance of the European economies remained subdued.  

“Supply continues to exceed demand in many locations and leasing activities are dominated by relocations, with firms taking advantage of attractive leasing incentives and lower occupancy costs in prime areas. 

“The general outlook across most global office markets in 2004 remains cautious, with nearly 55% of the 111 locations in the survey forecasting costs to stabilise and 24% expecting further cost reductions,” it added. 

Based on the survey, London (West End) and Paris remained the top two most expensive locations with accommodation costs of US$16,700 and US$15,700 per workstation per annum, respectively. 

Joining the ranks of this year's Top 10 list are Toronto, ranked 9th, and Dublin, ranked 10th, with year-on-year occupancy costs increase of 16.3% and 24.5%, respectively.  

The only Asia-Pacific city to make it to the top 10 list is Tokyo (Central 5 wards), ranking as the 5th most expensive location at US$12,900 per workstation per annum. 

In the Asia-Pacific, markets posted mixed results with positive sentiments noted in Australia, New Zealand, Thailand, India, Vietnam and the Philippines. 

In India, Bangalore experienced an unprecedented growth in demand from the information technology (IT) and IT-enabled service sector. The trend is expected to continue in 2004. 

Tokyo (Central 5 Wards) was ranked as the top most expensive location in the region, followed by Sydney, Seoul, Tokyo (Outer Ward) and Hong Kong.  

The report said the uncertain political situation pre- and post-2004 general election in Indonesia and the Philippines was likely to affect occupiers’ expansionary decisions.  

Accommodation costs in Hanoi, Ho Chi Minh City, and Bangkok were likely to increase with the positive business outlook in those cities. 

In China, Beijing and Guangzhou registered a decline in costs of 10% and 9.9%, respectively. Occupancy costs in Shanghai (Pudong), Tianjin and Dalian were expected to remain stable in 2004.  

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