Reading Malaysia’s office and shopping centre supply, occupancy and rental indices into 2025—what’s stabilising, what’s bifurcating, and how landlords and tenants can negotiate smarter.
Offices & Malls: Occupancy and Rent Signals Into 2025
Malaysia’s office and retail landscape is evolving as 2024 patterns roll into Q1 2025. The official snapshots track Purpose-Built Office (PBO) and Shopping Centre (SC) supply and occupancy alongside rental indices, giving landlords and occupiers a clearer view of where pricing power sits. Note that starting Q1 2025, there is a property-type reclassification affecting PBO/SC space totals—keep this in mind for year-on-year comparisons.
Office (PBO): Flight to Quality, Transit & Spec
- Bifurcation continues: Demand concentrates in better-specified, well-managed buildings—especially those near MRT/LRT and with strong parking ratios.
- Benchmark smarter: Use the PBO Rental Index and city-level growth boards to gauge negotiation ranges across Kuala Lumpur, Petaling Jaya/Subang Jaya, Johor Bahru and George Town.
- Landlord plays: Capex on lobbies, lifts, air-conditioning and end-of-trip facilities helps compress lease-up time and supports headline rents.
Shopping Centres: Curation Over Pure Footfall
- Where rents stabilise: Transit-linked and suburban centres with strong F&B and daily-needs anchors typically recover faster than CBD assets that rely on destination retail.
- Track the index: The Klang Valley Shopping Centre Rental Index (KV SC-RI) gives directional rent signals—pair this with on-ground vacancy checks (upper floors vs. prime ground-frontage).
- Repositioning levers: Curate experiential anchors, rotate underperforming categories, and redesign upper-floor circulation to lift conversion.
Reading the Data Without the Noise
- Mind the reclassification: When comparing 2024 vs Q1 2025 PBO/SC figures, adjust for the property-type changes noted by the statisticians.
- Triangulate indices with fieldwork: Use PBO-RI/KV SC-RI as guides, but validate with current incentives, fit-out periods, and effective rents after rebates.
- Watch the broader pipeline: Construction starts outpaced completions through late-2024 into Q1 2025—implications for space delivery and backfilling vary by corridor.
Negotiation Tips (2025)
- For landlords: Offer structured fit-out packages and step-ups; link green retrofits (e.g., HVAC upgrades, solar-ready roofs on retail podiums) to longer terms.
- For tenants: Seek rent-free aligned to actual fit-out timelines, cap service-charge escalations, and negotiate expansion/downsizing options.
