Malaysia Commercial Property Market Outlook 2025

The commercial property sector in Malaysia—comprising shoplots, shop offices, retail spaces, and purpose-built offices—continues its slow recovery in 2025. Based on NAPIC’s Q1, H1, and Q3 2025 Snapshot Reports, the market shows gradual stabilisation as businesses reopen, tourism improves, and domestic spending strengthens.

Commercial Market Overview: Still Challenging, But Improving

Malaysia’s commercial segment has been under pressure in the last few years, but NAPIC data for 2025 shows signs of stabilisation:

• Retail occupancy in Klang Valley is maintaining steady levels.
• Purpose-built office space remains oversupplied but vacancy rates are slowing.
• Shoplots and shop offices remain the most active commercial subsector.
• Tourism growth and domestic SME expansion are supporting the recovery.

Office Market: High Supply, Slow Absorption, but Segment Is Stabilising

NAPIC’s Purpose-Built Office (PBO) data for 2025 indicates:

• Large supply in KL and PJ/Subang, with occupancy improving slightly.
• New office completions are slowing, reducing future supply pressure.
• Tenants prefer Grade A offices with modern green features.
• Older buildings face competition but remain attractive due to lower rent.

Many businesses are also shifting towards hybrid work models, keeping rental demand moderate but consistent.

Retail & Shopping Complexes: Consumer Recovery Drives Performance

Klang Valley Shopping Complex Rental Index (KV SC-RI) shows:

• Steady rental performance across shopping malls.
• Prime malls (Mid Valley, Sunway Pyramid, Pavilion) showing strong occupancy.
• Neighbourhood malls continue to attract F&B, convenience stores, and pharmacies.
• Tourism growth boosts malls in KLCC, Bukit Bintang, Genting, and Penang.

Retail remains a resilient commercial segment especially in high-density residential areas.

Shoplots & Shop Offices: The Best Performing Commercial Subsector

Across H1 & Q3 2025, NAPIC reports show that traditional commercial units (shoplots, 2–4 storey shop offices) remain the most actively transacted due to:

• Demand from SMEs (F&B, clinics, logistics, tuition centres, offices).
• Located in high-growth suburbs like Puchong, Setia Alam, Rawang, Bangi, Seremban.
• Low entry price compared to retail malls and offices.
• Stable rental income with strong Walk-In traffic.

New townships such as Bandar Saujana Putra, Kota Warisan, Bukit Jalil, Shah Alam, and Kota Kemuning continue to attract small business tenants.

Unsold Commercial Units: Manageable Compared to Residential

Based on NAPIC H1 2025 unsold data:

• Unsold commercial stock is significantly lower than residential and serviced apartments.
• Most unsold units are located in developing towns with slower business demand.
• Established locations such as Subang, SS2, Puchong Jaya enjoy fast absorption.

This suggests commercial property is not facing an oversupply crisis.

Construction Activity: Controlled and Sustainable Supply

Construction activity for commercial subsectors remains moderate. NAPIC’s Q1–Q3 2025 figures suggest:

• New planned supply is consistent but not excessive.
• New completions are stable, avoiding oversupply pressure.
• More boutique commercial developments (low-density shop offices) coming up.

This supports better long-term price stability for investors.

Commercial Investment Outlook: Who Should Buy in 2025?

Commercial property in Malaysia is suitable for:

• Investors seeking passive rental income
• F&B operators, clinics, tuition centres expanding operations
• Corporate buyers relocating to decentralised business districts
• Long-term investors targeting appreciation in new townships

Investors should focus on:

• Townships with strong residential density
• Mature areas with consistent demand
• Corner units with visibility & frontage
• Near LRT/MRT or highways (SKVE, LDP, WCE, ELITE)

Start Your Search for Agricultural, Industrial, or Land Investment

• Explore Agricultural and Development Land for Sale
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For personalised guidance on commercial property investments, contact Terra Group anytime.