Kota Kinabalu’s residential, office properties uptick in 2H

KUCHING (Jan 8): Kota Kinabalu’s property market saw its share of progress in the second half of 2023 (2H23), based on Knight Frank’s latest real estate highlights.

As of the third quarter of 2023 (3Q23), the report showed that the existing supply of residential units in Greater Kota Kinabalu (districts of Kota Kinabalu, Penampang, Tuaran, Putatan and Papar) totalled 136,332 units.

The condominium/apartment segment as a singular property type represented majority of the existing stock with circa 54,119 units (39.7 per cent share).

“Within Greater Kota Kinabalu, there was a slowdown in the residential property market during 1H23, registering 1,227 transactions worth RM573 million respectively.

“All selected residential property categories as tabulated below registered lower sales volume and sales value in 1H23 when compared to 1H22.

“The terraced house and condominium/apartment categories dominate the overall volume and value of residential transactions with 81.6 per cent and 66.7 per cent share respectively.”

As of 3Q23, Knight Frank said the existing supply of privately-owned purpose built office space in Kota Kinabalu stood at 5.2 million square feet (sq ft) with an average occupancy rate of 88.8 per cent.

It added that monthly asking gross rentals of selected privately-owned central business district (CBD) office space range from RM2 per sq ft to RM5.50 per sq ft.

The residential sub-sector is expected to see more launches of high-rises in the mature localities of Kota Kinabalu and Penampang, as well as of landed schemes in Greater Kota Kinabalu.

“In view of the new and impending supply from recently launched and incoming schemes, potential buyers and investors continue to be spoilt for choice.

“In terms of demand, the market continues to adapt as the Standardised Base Rate (SBR) normalises at three per cent, hovering at a pre-pandemic level.”

The supply of privately-owned purpose-built offices is expected to be constant in the near future due to a mismatch in high development costs and slow rental growth.

Overall, rental and occupancy levels of existing supply are likely to remain stable, with landlords continuing to explore space compartmentalisation, which may lead to shorter vacancy periods and possibly better rental yields.

This can benefit startups and smaller companies seeking to occupy space in central locations, whilst maintaining cost viability.