By Sharen Kaur - Published in NST Property, July 16, 2021
The overall activity for new take-up in Malaysia's office market is expected to be slower in the next three years as companies readjust their plans for the short-term, says Knight Frank Malaysia executive director of corporate services Teh Young Khean.
Teh also said this would vary depending on industries.
"Businesses related to e-commerce, hygiene and healthcare, technology and business process outsourcing are active and we foresee more take up will be coming from these sectors," he said.
Teh said despite the current market condition in Malaysia, the firm has seen an increase in enquiries on workplace consultancy from organisations to assist in developing strategies on future workplace arrangements.
According to Knight Frank's global (Y)OUR SPACE survey, businesses headquartered in Asia-Pacific (APAC) are less likely to feel the long-term impacts of Covid-19 on their real estate portfolios, with only 14 per cent expecting the pandemic to permanently alter their real estate strategies.
The survey features findings of almost 400 international businesses with a combined headcount of over 10 million and provides a unique insight into the workplace strategies and real estate needs of global companies.
The findings show there is a contrast between APAC and overall global corporate real estate attitudes, with 17 per cent more APAC businesses likely to increase real estate portfolios and 18 per cent fewer APAC businesses likely to decrease their global portfolios compared to their global counterparts.
However, for those expecting to increase or decrease their portfolios, the proportion of those seeking to make substantial changes of more than 20 per cent is greater than that of global levels.
Teh said other areas where APAC responses diverged from the global average is the likelihood of shifting headquarters (HQ).
Some 51 per cent of APAC respondents said a move is likely to happen in the next three years, which is 13 per cent higher than the proportion of global respondents who answered similarly.
"With the double whammy effects resulting from the current oversupply and weak market sentiment in Malaysia, certain occupiers may take this opportunity to relocate their office spaces for a building that offers better value propositions especially for an option that could provide better savings opportunity," said Teh.
He said while cost savings is the main driver globally for influencing this decision, the second key driver for relocation for APAC HQ is the ability to access different talent pools.
According to the survey, a significant portion of APAC corporates are looking to move HQ facilities and are doing so to achieve their goals of talent attraction and access to different talent pools.
"The question remains on where exactly they are going and how does this affect existing real estate strategies," said Teh.
Meanwhile, the survey revealed the top three types of amenities that will be demanded by employees in APAC. They are food and beverage offerings, healthcare facilities, and gym facilities.
'We are witnessing the shift towards mixed-use development that boasts a diverse mix of residential, commercial, and recreation spaces all in one area," said Teh.
He expects occupiers are likely to gravitate towards spaces that provide more amenity options, and landlords could consider implementing a long-term mixed-use strategy across their real estate portfolios.
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