WELL-LOCATED ASSETS TO DRIVE KLANG VALLEY PROPERTY MARKET IN 2026 -- CBRE WTW

KUALA LUMPUR, Jan 7 (Bernama) -- Klang Valley property market performance for this year will be mainly driven by well-located, high-quality assets that meet changing work, shopping and travel needs, according to CBRE WTW Valuation and Advisory Sdn Bhd.

Its research and consulting director Mary Kurien said assets with strong visibility, accessibility, and operational efficiency will continue to perform better.

“As an outlook looking ahead, over five million square feet (sq ft) of prime offices are coming on stream, and this will make competition even more intensified, putting greater pressure on non-prime office buildings.

“As a result, these underperforming non-offices are likely to be repurposed. This follows recent trends, such as office to hotel conversions,” said Kurien, adding that non-prime offices continue to see a decline in demand.

She said this at the CBRE WTW Malaysia Real Estate Market Outlook briefing here today.

CBRE WTW also expects more commercial properties to be converted to residential use, supported by the tax incentives announced under Budget 2026 that encourage the repurposing of commercial buildings.

Meanwhile, Kurien noted that the retail sector continues to record resilient performance, led by prime shopping malls, despite uneven conditions across the broader market.

Prime malls such as Suria KLCC, Pavilion Kuala Lumpur and Mid Valley Megamall continue to perform strongly, with occupancy rates exceeding 90 per cent amid sustained tenant demand.

“In contrast, non-prime malls remain under pressure, grappling with persistently high vacancy levels. As part of market repositioning efforts, some older malls are being recommissioned,” she said.

Additionally, Kurien said Visit Malaysia 2026 will strongly support the performance of Malaysia’s hotel segment this year, as tourist arrivals are expected to increase by 50 per cent.

She said an additional 2,000 new rooms, currently under construction and over 70 per cent of which are in the luxury category, will strengthen Klang Valley’s appeal as a premium destination.

However, she said this will also put short-term pressure on both occupancy rates and room rates. 

“Overall, the market is expected to stay resilient, supported by the high tourist arrivals, as well as the continued demand for well-located, strong-branded hotels with strong brands,” she said.

-- BERNAMA