Kuala lumpur: Klang Valley's property market performance for this year is expected to be primarily driven by well-located, high-quality assets that cater to changing work, shopping, and travel needs.
According to BERNAMA News Agency, CBRE WTW Valuation and Advisory Sdn Bhd's research and consulting director, Mary Kurien, emphasized that assets with strong visibility, accessibility, and operational efficiency are likely to maintain superior performance. Kurien highlighted that over five million square feet of prime office space are set to enter the market, intensifying competition and increasing pressure on non-prime office buildings. Consequently, it is anticipated that underperforming non-prime offices will be repurposed, following recent trends like office-to-hotel conversions. This shift is attributed to a decline in demand for non-prime office spaces.
Kurien shared these insights at the CBRE WTW Malaysia Real Estate Market Outlook briefing. The firm anticipates more commercial properties will be converted to residential use, bolstered by the tax incentives introduced under Budget 2026, which encourage the repurposing of commercial buildings.
In the retail sector, Kurien noted that prime shopping malls are leading a resilient performance despite uneven conditions in the broader market. Shopping centers such as Suria KLCC, Pavilion Kuala Lumpur, and Mid Valley Megamall are experiencing strong occupancy rates exceeding 90 percent, driven by sustained tenant demand. In contrast, non-prime malls are facing ongoing challenges with high vacancy levels, prompting some older malls to undergo recommissioning as part of market repositioning efforts.
Furthermore, Kurien remarked that Visit Malaysia 2026 will significantly bolster Malaysia's hotel segment performance this year, with tourist arrivals expected to rise by 50 percent. The introduction of 2,000 new rooms, predominantly in the luxury category, will enhance Klang Valley's image as a premium destination. However, this expansion may exert short-term pressure on both occupancy rates and room rates. Overall, the market is projected to remain resilient, supported by high tourist arrivals and continued demand for well-located, strong-branded hotels.