KUALA LUMPUR: The prime residential market in Kuala Lumpur saw a four per cent improvement in 2023 and is expected to stay dynamic this year, given Malaysia's positive macroeconomic drivers.

JLL Malaysia managing director and head of Value and Risk Advisory, Jamie Tan said the property market is expected to continue its positive trajectory barring external shocks backed by strong fundamentals for all market sectors.

This is evident in the rising launches across various segments, including prime and luxury properties.

"Capital values or price per square foot remained unchanged in 2023 to the first quarter (1Q) 2024.

"However, we anticipate a slight appreciation of selling prices in the prime segment, considering the anticipated growth in demand, decrease in overhang and increase in construction costs," he said in a media briefing following JLL's 1Q 2024 Greater Kuala Lumpur Property Market Monitor here, today.

Tan said the ongoing demographic trend and the rising preference for renting among locals are opportunities for investors to capitalise given the growing rental yields in the prime segment.

Notably, Tan said four out of seven submarkets in the prime market, including Mid Valley City-Brickfields-Seputeh, Damansara Heights-Kenny Heights-Bukit Tunku, Ampang Hilir followed by KLCC, saw improved asking rents in 1Q 2024.

The rising number of incoming tourists supports these trends, coupled with the relaxed requirements for the Malaysia My Second Home (MM2H) programme, which is expected to see foreign buyers stimulate demand and drive prices up for prime properties.

Meanwhile, in the officer market segment, JLL Malaysia's Office Leasing Advisory team member Quiny Lee said the Kuala Lumpur City submarket is the preferred location for the financial sector such as banks, insurance companies, and oil and gas.

Combined, they occupy almost three-quarters of occupied stock, while the technology and business services came in below 10 per cent.

"Companies value the Kuala Lumpur City submarket for its location, proximity to business partners and accessibility via public and personal transport while the KL fringe offers facilities and food and beverages (F&B) options," she said.

Lee further said high-quality green-certified buildings are also in high demand in KL City and fringe submarkets due to favourable transportation options and alignment with corporate environment, social and governance policies.

Interest from large multinational investors and sovereign funds considering participation in large-scale development schemes could also be a positive signal for other investors.

On the demand for co-working spaces, Lee said this continues to gain popularity among startups and entrepreneurs seeking supportive community and network, due to its flexibility and convenience.

With the ability to expand as needed, co-working spaces offer a cost-effective alternative to traditional office spaces.

JLL is a leading professional services firm specialising in real estate and investment management.