PETALING JAYA (July 3): There will be a need for bigger offices – not shrinking – in a post-pandemic environment. This is the view of IGB Bhd Group CEO Datuk Seri Robert Tan Chung Meng (pictured).
“Employers still have the same space needs and even need more employee space for social distancing. Even though all people are vaccinated, it does not mean that they will not be infected. We have a lot of businesses that are asking for more space.
“If the rental rate is right, I think they’ll still take our properties,” Tan told The Edge Malaysia.
Tan also believes there will be changes in office density in the new normal. “For example, occupants who have reduced their space density to 70 to 80 square feet / person may be forced to reconsider the standard and increase the density to 100 square feet / person in the long run.”
“As companies seek to redesign the current and future workplace while respecting physical distancing measures, we anticipate that the space required per workforce will increase and effectively offset the impact of office downsizing,” said he explained.
It was reported that a recent survey by CBRE Research found that remote working is unlikely to dampen the demand for office space in Asia Pacific, as over 70% of executives prefer staff to work from the office. .
IGB Commercial REIT’s portfolio assets include Menara IGB and IGB Annex, Centrepoint South, Centrepoint North, Boulevard Properties, Gardens South Tower, Gardens North Tower, Southpoint Properties, Menara Tan & Tan, G Tower and Hampshire Place Office. The REIT has 3.4 million square feet of net leasable area (NLA).
According to The Edge report, in June the average occupancy rate of IGB Commercial REIT was 73.4% compared to 76.3% in 2020.
The weekly also said that while “the pandemic has resulted in the downsizing of business operations for some office tenants, this has been mitigated by the expansion of office needs by other lines of business, from which the REIT has benefited. , because of its diverse portfolio. mixture of commercial properties ”.
For example, G Tower, which is located in the Golden Triangle area, generated the highest gross rental income of RM31.66 million in 2020 among REIT properties, with an occupancy rate of 85.5%, “the trade publication added.
Tan said that with IGB Commercial REIT’s competitive rental prices, he believes the company will be able to easily overcome the current glut of office supplies.
“We survived [over the years]. If the buildings in the city are rented at my rental rate, they will lose money. When the Tun Razak exchange opened, the rent offered was RM16 per square foot (psf), but it was RM6 psf for Tower G, ”he said.
Read the full report in this week The Edge Malaysia
Get the latest news @ www.EdgeProp.my
Subscribe to our Telegram channel for the latest stories and updates
Click here for more property stories