SHAH ALAM, July 26 — Recurring flash floods in Petaling Jaya are starting to present a lasting impact to the city’s commercial property market, with industry players warning that more such incidents could spark devaluation and affect investor confidence.
The Malaysian Institute of Estate Agents (MIEA) expressed concern that frequent severe flooding is reshaping the value of commercial real estate in the city, as reported by Free Malaysia Today.
MIEA president Kelvin Yip said commercial properties that have been repeatedly affected by floods are already recording lower capital values as prospective buyers consider repair costs and rising insurance premiums.
“This is no longer a freak occurrence but a seasonal risk factor. PJ’s reputation as a prime commercial hub is being affected.
“The current infrastructure is clearly overwhelmed, and we urge local authorities to prioritise upgrades to drainage master plans and enforce stricter development guidelines.
“High-ground and flood-resilient properties will command a ‘safety premium’ and low-lying assets will face gradual depreciation each year until infrastructure improvements catch up,” he said.
Yip said recurring floods could gradually erode commercial property values over the long term, especially if financial institutions tighten lending requirements for buildings located in flood-prone areas.
He added that multinational corporations may start requesting flood-risk clauses in tenancy agreements, potentially weakening landlords’ negotiating leverage.
Yip said tenant preferences are also shifting, with food and beverage operators and retailers increasingly avoiding ground-floor premises in flood-prone locations in favour of areas with better drainage infrastructure.
He also said investors are showing a preference for properties equipped with elevated loading bays and flood-free access roads, while assets lacking such features face longer vacancy periods.
MIEA’s statement follows flash floods in several parts of Petaling Jaya on Tuesday after hours of heavy rain.
Meanwhile, Juwai IQI co-founder and group chief executive officer Kashif Ansari echoed similar concerns.
“Most property buyers rely on financing, making banks the ultimate arbiters of property value — and banks are typically cautious about properties located in flood zones.
“Repeated flooding is a red flag for potential commercial property buyers. Floods increase expenses, reduce rental income and erode the value of property investments,” Kashif said.
