Kuala Lumpur office vacancy forecast to reach 17.3% in 2026

Over 2.6 million sq ft of new supply is expected to be completed.

Kuala Lumpur's office market recorded stronger leasing momentum in Q1 2026 as occupiers pursued relocation strategies focused on higher-quality space, according to JLL.

The property consultancy said net absorption reached 488,000 square feet, led by demand from finance, technology and business services firms. Significant pre-leasing activity was also reported, particularly among major tenants in the DC submarket.

With no new completions delivered during the quarter, overall vacancy improved by 0.76 percentage points to 15.2%. However, JLL cautioned that approximately 2.64 million square feet of new supply due in 2026 could push vacancy above 17%.

Average rents increased to MYR6.86 per square foot from MYR6.81 per square foot, reflecting growing competition for well-located, high-quality buildings. Landlords have continued to balance rental growth with incentives aimed at securing long-term occupiers.

JLL expects vacancy to rise to around 17.3% as new projects complete, but said premium Grade A assets should continue to benefit from flight-to-quality demand and growing interest in sustainable, future-ready office space.