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The Office Space Market in Ipoh : A Glut
 
The office space market in Ipoh is seriously in access and it is obvious that there is a mismatch between supply and demand. Try taking a drive around Ipoh and one would notice a lot of empty office space available for rental especially in Pengkalan, Old Town, Bangunan Mayban Trust, Bangunan M & A, Bandar Ipoh Raya, etc.

Since the completion of the Greentown Business Centre, a lot of businesses, large corporations and even a few government departments had moved to this area making it the most strategic business location in Ipoh. It is now the location for banks, the Federal Building, KWSP Building, City Council, hotels and securities firms among others.

Many of these businesses and corporations were previously maintained in Old Town and Bangunan Mayban Trust. For instance, the income tax office and the office of the Employees’ Provident Fund or KWSP were previously located at Bangunan Mayban Trust. After their move to their own buildings in Ipoh Garden and Green Town Business Centre respectively, Bangunan Mayban Trust took a dive in its occupancy rate and at the present moment, it only has a 20 percent occupancy rate while the rest of the building is empty. This in turn leads to a decrease in rental value to the rate of RM1.30 per square foot. Other buildings that suffer from a similar fate are the Bangunan Tabung Haji and Bank Islam with their rental value at RM1.80 per square foot and RM1.60 per square foot respectively.

Meanwhile, a new building is under construction in the Jelapang area, owned by the Kementerian Dalam Negeri and once completed, it is rumoured that the Jabatan Imigresen and Jabatan Pendaftaran Negara will be moving there. The Jabatan Imigresen is located at Wisma Kinta at the present moment while the Jabatan Pendaftaran Negara is at Greentown Business Centre. Will Wisma Kinta suffer the same fate as Bangunan Mayban Trust once the Jabatan Imigresen moves to its new Jelapang office?

The glut of office space available for sale or rental in Ipoh is in a dire situation and something needs to be done before it gives outsiders an impression of a ghost town – lots of empty buildings minus the presence of humans. The only party benefiting from this over supply is the one renting as it has a host of choices to choose from.

Developers should shift their focus and concentrate on the types of projects that are in demand such as low and medium cost houses. The state government through the Majlis Bandarya Ipoh should play a significant role in overcoming the over supply of office space by not approving any more of such projects in the coming future. Also the owners of existing available office space should be more flexible in their choice of tenants and if possible, cater to a more diverse market rather than leaving it empty.

To fill up the empty office space means getting companies or businesses to rent it and there is only one solution – increasing the business activities in the state of Perak. Instead of depending on the federal government to promote Perak as an investment potential, the state government should play a pivotal role in attracting investors, both local and foreign. It should emulate the efforts made by the Malacca and Selangor state governments by frequently sending delegations abroad to promote Perak as a profitable investment destination.
 

 

 

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