This is not an analysis from property guru pundits but actual transaction data from NAPIC (National Property Information Centre). Let’s dive in!
If you have no time to read, here’s your takeaway. IT IS GOOD!
Here are the key points from The Edge, 5 Dec 2024 (Upswing in KL’s 1H2024 commercial property performance — Napic data) regarding the performance of Kuala Lumpur’s commercial property market in the first half of 2024:
- Overall Market Growth:
- Transaction volume in Kuala Lumpur (KL) for all commercial properties increased by 45.9% year-on-year (y-o-y), from 2,396 units in 1H2023 to 3,500 units in 1H2024.
- Total transaction value rose dramatically by 103.6%, from RM2,541.54 million to RM5,173.6 million.
- KL Town Centre Performance:
- KL town center saw the highest y-o-y increase in transaction volume at 81.9%, from 765 units to 1,392 units.
- Transaction value in the town center surged by 191.2%, from RM981 million to RM2,859.3 million, driven by high-value transactions in premium office spaces and retail outlets.
- Performance in Other Districts:
- The broader KL area (excluding town center) had a 48.8% increase in transaction volume and over 50% in value.
- Setapak showed a 48.3% growth in transaction volume and a 123.9% jump in transaction value.
- Petaling experienced a 35.1% increase in transaction volume with a 28.5% rise in value.
- Batu was the only district to see a slight decrease in transaction volume by 1.5%, but value increased by 34.8%.
- Pricing Insights by Property Type and Location:
- Office lots are least expensive in the wider KL area at RM482.6 per square foot (psf).
- Small-office home-office (SoHo) units are most affordable in Setapak at RM464.5 psf.
- Retail lots in Petaling are the cheapest at RM499 psf, offering value for businesses needing larger spaces.
- For 2-2.5-storey shops, Setapak offers the lowest price at RM935.1 psf.
- KL town centre is the priciest for most property types but offers high visibility and premium location benefits.
This data reflects a robust recovery and growth in KL’s commercial real estate, particularly highlighting the strategic importance of location and pricing for different business needs.
Over the years, there has been a general neglect of commercial development in Kuala Lumpur, with relatively more resources directed toward housing and shopping mall projects (and, of course, near-zero industrial development in KL). However, with rapid and continuous population growth, active new housing developments over the past decade and beyond, and improved connectivity via rail transport (easy moving people around), commercial properties—especially shoplots and premium office spaces in the city center—have become highly sought after compared to retail spaces in shopping malls.
Just take a look at the rising rental rates over the years. Commercial property owners, your patience has finally paid off!
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