Occupancy Certificates issue for old government buildings to be resolved
The Local Government and Housing Ministry is currently taking steps to resolve the issue of OC
Concerns over elevated office vacancy rates persisted as new supply continued to outpace demand.
The total stock of office space in the Klang Valley rose to 121.7 million square feet in the fourth quarter (Q4 2024: 121 million square feet).
Continued observations of preferences for more flexible tenancy contracts and hybrid work arrangements suggest that adjustments in supply still have some way to go.
As at Q4 2024, the central bank said vacancy rates in the office space segment remained elevated at 28.3 per cent (Q3 2024: 28.4 per cent; Q2 2024: 28.4 per cent).
Meanwhile, the shopping complex segment improved slightly during the period, as reflected in the marginal decline in vacancy rates amid higher footfall and favourable demand conditions.
Risks to financial stability arising from the longstanding weaknesses observed in the OSSC segment are assessed to remain contained.
The banking system's exposure to the OSSC segments is limited, representing only a small share of total banking system loans (2.5 per cent; June 2024: 2.6 per cent).
The asset quality of OSSC loans remained stable, with an impairment ratio of two per cent as at end-December 2024 (June 2024: 2.1 per cent).
The median outstanding loan-to-value ratio for the OSSC segment also remained prudent (December 2024: 59.5 per cent; June 2024: 58.9 per cent).
Bank Negara said the short-term outlook for the OSSC segment remains cautious given existing weaknesses in the segment.
