Kuala Lumpur prime office rents up 1.7% in Q3

Leasing was selective and quality-focused.

In a recent report, Knight Frank revealed that prime office rents in Kuala Lumpur averaged MYR 6.02 per sq ft per month, up 1.7% year-on-year and flat quarter-on-quarter, underscoring selective, quality-focused leasing concentrated in ESG-aligned Grade A assets. Vacancy eased slightly to 23.1% in Q3 from 23.4% in Q2, reflecting ongoing flight-to-quality momentum.

“Kuala Lumpur’s office pipeline is projected to expand total stock by 2.4% in 2025, reinforcing a tenant-favoured environment as landlords compete for high-quality occupiers,” the report said.

Here’s more from Knight Frank:

“Occupier priorities have continued to evolve amid ongoing geopolitical and technological shifts. In this dynamic environment, organisations are prioritising space solutions that support higher density and maximise strategic value. The sustained demand for premium spaces is closely tied to broader business transformation agendas. In a climate defined by uncertainty, flexibility and resilience have become non-negotiable. Corporates are committing to new spaces, but with a clear emphasis on agility, embedding flexible lease terms and pre-let options to maintain responsiveness and mitigate risk,” said Tim Armstrong, Global Head, Occupier Strategy and Solutions, Knight Frank.

“Kuala Lumpur’s cost-to-quality advantage continues to attract occupiers towards premium transit-linked and ESG-ready assets. With competitive rents and ongoing infrastructure upgrades, the city is well-positioned as a long-term base in Asia-Pacific,” said Keith Ooi, Group Managing Director of Knight Frank Malaysia.

“Although occupier markets in the region remained cautious, demand for new spaces has remained resilient as occupiers strive towards creating agile, data-informed ecosystems that flex with evolving needs. Technology is accelerating these evolving expectations, while the clustering of strategic functions in select districts continues to reinforce the divide between best-in-class assets and the rest. While this dynamic will continue to anchor resilient demand for high-quality office environments, occupiers must remain vigilant in anticipating market shifts and exploring pre-leasing opportunities in under-construction projects to secure future-ready spaces,” said Christine Li, Head of Research, Asia-Pacific at Knight Frank.

Locally, landlords are sharpening their focus on retention and lifecycle asset performance, as occupiers persistently gravitate towards newer Grade A buildings with sustainability features and transit adjacency.

“Prime office within integrated development in Kuala Lumpur are experiencing good demand in the market with limited choices for large space requirement,” said Young Khean Teh, Senior Executive Director of Office Strategy and Solutions at Knight Frank Malaysia. “With no major new supply completing this year, vacancy in the top-tier segment is stabilising, reinforcing the flight-to-quality trend expected to continue into 2026.”