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Paper eres2008_318:
Tenants Renewal Decision for Occupation at Purpose Built Office Buildings within the Central Business District (CBD), Kuala Lumpur, Malaysia

id eres2008_318
authors Mohd Adnan, Yasmin
year 2008
title Tenants Renewal Decision for Occupation at Purpose Built Office Buildings within the Central Business District (CBD), Kuala Lumpur, Malaysia
source Book of Abstracts: 15th Annual European Real Estate Society Conference in Kraków, Poland
summary As the country progresses to achieve 50 years of independence, the initial central area of business activities of Kuala Lumpur, Malaysia located between the two rivers, Klang River and Gombak River (the city early formation business area) has undergone tremendous changes. Business activities that have transformed from pure market and commodity transactions to service oriented ones, have seen a shift of business occupation from shophouses and shop offices to purpose built office buildings. The various identification of the office buildings location in Kuala Lumpur which have been adopted by the National Property Information Centre (NAPIC) are Central Business District (CBD), Golden Triangle (GT), Within City Centre (WCC) and Suburban area. The Central Business District (CBD) identified as the older part of Kuala Lumpur city was gazetted in accordance with the Comprehensive Plan No 1039 in 1970. The office buildings located within the area shall be identified for the purposes of this study. While older office buildings located in secondary location or on the fringe of Central Business District (CBD) area are said to be more susceptible to being left vacant due to its unpopular office addresses and poor building images, similar buildings located close by the Kuala Lumpur City Centre (KLCC), an area within the Golden Triangle area gained from the strategic location and continued to enjoy sustainable occupancy rates. In a research report entitled “Why rent in Kuala Lumpur” by the National Institute of Valuation (INSPEN), Malaysia in 1993, examines the key selection criteria for office space occupation in Kuala Lumpur. Key factors used as guidelines for classification of office buildings were location, building design, building services, rental rates and building image. The study has also revealed that majority of the building are managed in-house. It was also generally observed that the tenants in the Golden Triangle Area were more maintenance conscious than their counterparts in the CBD area, possibly due to their derived expectation of the better quality services to correspond with the comparatively higher service charge levied to them. The study however did not specifically rank the importance of the facilities accordingly or gauge the level of tenant satisfaction in terms of expectation and performance towards the factors identified. Various studies on the tenants’ occupation within office buildings have been examined. Axlander and Muhlebach (1990) had observed that tenants require supporting system to manage their business. Moreover, Kotler (1997) has identified the main factors to be considered in facilities selection such as rental, access to public transportation, and environment. In another study, Dean, Lee (2000) had stated that a survey of tenant satisfaction should include willingness to receive suggestions and implement them, appearance and property conditions, the quality of service management, contract agreement, tenant relationship, renew objectives, property characteristics and readiness to solve problems. Asser (2004) has indicated in her study that amongst other factors that influence the renewal decision include the size of the occupied space, the level of employment in the market, as well as location. Logical building characteristics such as age of the space and the size of the buildings did not appear to have a large impact. A study by a local property consultant firm, Rahim & Co Research Sdn Bhd in 2005, revealed that the majority of the tenants are looking for following factors in making their decision to relocate; they are namely location, office address, convenience accessibility, rental rates, building specification and facilities, building condition, age and maintenance. It is interesting to note that various factors has been identified to solicit tenants’ requirements from previous studies and it would be another additional information to find out whether these factors are still relevant in the current market office and business scenario in Kuala Lumpur. A specific focus on the CBD of Kuala Lumpur as an area (the study area) which is considered no longer a choice area for the location serves to examine whether other improvements could suggest in overcoming the situation.
series ERES:conference
email yasmin_alambina@um.edu.my
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session Doctoral presentations
last changed 2008/11/26 14:05
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