Local office space take-up to slow as firms tweak plans
Businesses related to e-commerce, hygiene and healthcare, technology and business process outsourcing will lead activity, says expert
PETALING JAYA: Overall activity for new take-up in Malaysia’s office market will generally be slower in the next three years as companies are readjusting their plans for the short term, said Knight Frank Malaysia executive director of corporate services Teh Young Khean (pix).
“However, this varies 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. Despite the current market condition in Malaysia, we have also seen an increase in enquiries on workplace consultancy from organisations to assist in developing strategies on future workplace arrangements.
“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 to a building that offers better value propositions, especially for an option that could provide better savings opportunity,” Teh said in a statement yesterday.
The most sought-after amenities for Malaysian workers to make a better workplace environment will be a building’s safety and security features, facilities within the development, amenity-rich office and wellness programmes and staff wellbeing.
Meanwhile, businesses headquartered in the Asia-Pacific (Apac) are less likely to feel the long-term impacts of Covid-19 on their real estate portfolios, with only 14% expecting the pandemic to permanently alter their real estate strategies, according to Knight Frank’s global (Y)our Space publication.
The survey features findings of almost 400 international businesses
with a combined headcount of over 10 million, providing a unique insight into the workplace strategies and real estate needs of global companies.
The survey results show a contrast between Apac and overall global corporate real estate attitudes, with 17% more Apac businesses likely to increase real estate portfolios and 18% 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% is greater
than that of global levels.
The other area where Apac responses diverged from the global average is the likelihood of shifting headquarters. In the (Y)our Space 2021 survey, 51% of Apac respondents said a move is likely to happen in the next three years, which is 13% higher than the proportion of global respondents who answered similarly.
While cost savings is the main driver globally for influencing this decision, the second key driver for relocation for Apac headquarters (HQ) is the ability to access different talent pools. 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. However, the questions remain – where exactly are they going and how does this affect existing real estate strategies?
Some Apac cities are facing a new type of problem – long commute times. Particularly, in some developing and emerging countries, traffic congestion and a lack of parking space run rampant. According to a study conducted by Boston Consulting Group), three developing markets see average commuters spend more than an hour in traffic congestion or in search for parking lots per day, with Kuala Lumpur coming up in the sixth placement in terms of congestions, especially during the peak hours.
In contrast, only 22% of global respondents found this important, giving priority to a change of work styles, business restructuring, and business transformation before considering this factor.
According to Knight Frank’s (Y)our Space survey, the top three types of amenities that will be demanded by employees in Apac are food & beverage offerings, healthcare facilities and gym facilities. Hence, there is the shift towards mixed-use development that boasts a diverse mix of residential, commercial and recreation spaces all in one area. 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.