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KUALA LUMPUR (April 16): With Grade A office supply in prime locations experiencing high demand and occupancy rates, businesses are advised to adopt a more forward-looking and strategic approach when securing workspaces.
Occupiers now need to plan earlier, PropNex Malaysia head of capital markets Victor Lim says.
“In today’s market, especially for Grade A offices in the central business districts (CBDs), companies can no longer wait until the last year of their lease to start planning. With limited supply and strong demand, the right space often needs to be secured around 18 months in advance,” Lim tells Edgeprop in an exclusive interview.
“What we usually advise occupiers is to look at office space as part of their overall business strategy. Start early — review your future headcount, how you want your workplace to function, and also how your office reflects your brand.
“From there, we can explore options together, whether it’s securing space in upcoming developments or planning a relocation ahead of time,” says the real estate consultancy expert.
He also points out that tenants who secure leases ahead of project completions “tend to enjoy better rental rates and longer rent-free periods, as landlords tend to be more flexible at that early stage”.
While a CBD address is sought after for its prestige, affluent urban hubs are also commanding comparable rates, says Lim.
"Today, we’re seeing strong demand not just in [CBD addresses like] Tun Razak Exchange, but also in key regional hubs like Bangsar South, Damansara Heights, and Petaling Jaya.
“In terms of building quality, many of these areas are actually on par with CBD offices, sometimes even better, especially when it comes to parking, accessibility, and overall convenience for staff,” he points out.
That said, a CBD address continues to carry a distinct level of branding and prestige, which remains particularly significant for multinational corporations (MNCs) and financial institutions.
“So at the end of the day, it really comes down to the company’s strategy whether they prioritise brand positioning, talent attraction, cost efficiency, or day-to-day operational convenience,” Lim says.
Securing deals strategically
In premium developments, landlords often prioritise large multinational corporations as anchor tenants.
However, Lim says many mid-sized companies are now growing very fast, and they are also seeking high-quality office addresses to support their branding and expansion needs.
“So what we do is we position these companies a bit differently. Instead of seeing them as just smaller tenants, we present them as strategic occupiers for the building.
“For example, if a company is willing to take up a larger space, commit to a longer lease, or has a strong industry profile, we highlight how its presence can actually enhance the overall tenant mix and add value to the development,” says Lim.
“At the end of the day, our role is really to bridge the gap between growing companies and premium buildings, and structure the deal so it works for both sides.”
Lim also points out that rent rates are not the only considerations in securing leases in high-demand spaces. The terms should also give room for businesses to grow and adapt over time.
“In a landlord-favourable market, rent is only one part of the negotiation. What I usually focus on is how to protect the tenant’s flexibility moving forward,” he says.
“First is the right of first refusal on adjacent space, so if the business grows, they get priority to take up the next available unit.
“Second is an early termination or break clause. This gives the company an option to exit earlier if their direction changes.
“Third is the right to sublease, so they can manage any excess space or adjust their setup if needed,” Lim elaborates.
Green certifications and fit-out costs
On sustainability accreditations, Lim agrees that it is “increasingly shaping tenant demand, rental performance, and long-term asset value”.
“Green building certification has become quite an important factor nowadays, especially for MNCs that are focused on ESG and net-zero goals.
Certifications like GBI (Green Building Index), GreenRE, or LEED (Leadership in Energy and Environmental Design) give tenants that added confidence that the building meets proper sustainability and energy efficiency standards,” he says.
Nevertheless, “Buildings without these certifications can still attract tenants, mainly because of location, but over time, landlords may need to look into upgrading or retrofitting to stay competitive,” he adds.
At the same time, rising fit-out costs and inflation are prompting companies to reassess how they structure their occupancy expenses. The choice between bare shell units and fully fitted, plug-and-play offices reflects a broader capital allocation strategy.
“For bare shell space, the initial cost is definitely higher because you need to spend on renovation, furniture, and all the setup before you can even start operating. But the upside is full flexibility. You can design the space exactly how you want it, which usually makes more sense if you’re planning to stay long term.
“On the other hand, plug-and-play offices are much faster to move into. Most of the fit-out is already done, so companies can reduce that upfront capital outlay and treat the cost more as part of their monthly operating expenses. That’s quite helpful for cash flow.”
Ultimately, Lim says flexibility is key: “Many companies prefer to stay asset-light and adaptable, especially given the current economic uncertainty, where business needs can change quite quickly”.
Meanwhile, the definition of office space itself is expanding. There is growing interest in non-traditional workplaces, including converted shophouses and heritage buildings.
“Many companies today want a workspace that reflects their brand and culture, not just a standard office floor,” Lim says
“These kinds of spaces tend to attract creative agencies, design firms, boutique consultancies, wellness brands, even certain showrooms where the space itself becomes part of the overall experience,” he adds.
However, such spaces require careful consideration of practical constraints, including zoning regulations, infrastructure capacity, parking, power supply, and renovation limitations.
Advanced technology integration shaping future demand
In today’s market, Lim says location or rent are not the only determiners.
Businesses are placing greater emphasis on robust digital infrastructure, reliable connectivity and resilient power supply, including dual-source systems, to support data-driven and AI-enabled operations.
As a result, high-specification, Tier-1 buildings with good infrastructure, flexible layouts and sustainable features are emerging as preferred choices, offering occupiers the adaptability to remain competitive well beyond 2030.
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