Malaysia's sluggish commercial property market, which had RM9.9 billion (US$2.63 billion) worth of office space vacant late last year, has improved slightly, international property consultants said today.

The general occupancy rate in the capital Kuala Lumpur grew from 73.3 percent to 75.5 percent, CH Williams Talhar and Wong said in its property market outlook for 2003.

"If you look at the vacancy rate, there was an improvement from last year despite some new space coming into the market," director Goh Tian Sui said.

Three new buildings comprising 95,410 square metres entered the market in the capital's top business district, called the "Golden Triangle", bringing the total supply to 4.7 million square metres of office space.

Low rentals

However, a large portion of the new space was immediately taken up by government offices and other business establishments upgrading to better premises, he said.

A survey by CB Richard Ellis in July 2002 showed Malaysia enjoyed o­ne of the lowest office rental rates in the Asia Pacific region, second o­nly to Bangkok, at RM50 (US$13.3) per square foot compared with Tokyo, the most expensive at RMRM516 (US$136).

The vacancy rate in the Golden Triangle is currently o­nly about 16.3 percent, Goh said pointing out that the overhang was generally outside the district.

"The KL Metropolitan area (immediate area surrounding the Golden Triangle) is seeing a vacancy rate of around 50 percent," he said.

The market's not likely to see any fantastic changes. There's still uncertainty in the marketplace." AFP