Foreign businesses fuel demand for prime locations in Kuala Lumpur

An influx of newcomers into some of the Malaysian capital’s most sought-after neighbourhoods is boosting commercial activity and changing the retail landscape.

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11 Sep 2026 09:53AM

KUALA LUMPUR: In the upscale neighbourhood of Solaris Mont Kiara on the northwestern edge of Kuala Lumpur, Korean-owned businesses – from restaurants and premium grocery stores to beauty clinics and hair salons – line the streets.

The area, home to a sizeable Korean expatriate community, is often referred to as “Little Korea”.

Before the COVID-19 pandemic, more than 25,000 Koreans were living in Malaysia, many of them from the business community and their families. 

Others included students who had come to Malaysia to learn English or pursue further studies.

That number fell to about 15,000 following the pandemic, although the Korean population has been gradually recovering.

Malaysia’s familiarity with Korean culture is among the factors attracting Korean businesses to the country, said Han Yong Jae, commercial attache at the Embassy of the Republic of Korea in Malaysia.

“Malaysian people enjoy K-drama and K-pop, so this familiarity can attract Korean people to Malaysia,” he said.

Korean companies are also looking to introduce products such as halal food and cosmetics to the Malaysian market, he added.

“Korean companies believe that if they succeed in Malaysia, then they can also succeed in other ASEAN countries.”

FOREIGN DEMAND RESHAPES RENTAL MARKET

For years, the arrival of foreign residents with greater spending power in Solaris Mont Kiara and the surrounding Mont Kiara and Sri Hartamas areas has fuelled demand for commercial space, reshaping the local property and rental market.

Malaysian business owner Ken Wong has operated his hair salon, No21 Salon, in Solaris Mont Kiara for the past 15 years.

He said competition for prime locations has intensified with a new wave of affluent foreign businesses, including those from China.

According to Wong, some newcomers are willing to pay substantially above prevailing rents to secure desirable shop lots.

“Landlords would double rents to push tenants out and charge newcomers more,” he said.

“Locals can’t compete when newcomers willingly offer RM15,000 (US$3,712) for a RM10,000 rental."

The higher offers can be attractive to landlords, but local businesses are crying foul.

LOCAL BUSINESSES FEEL THE PRESSURE

Competition from businesses willing to pay higher rents has raised landlords’ expectations of how much their properties can fetch, said William Ng, president of the Small and Medium Enterprises Association of Malaysia.

“For the landlords, why not? If you are willing to pay more, I would prefer you to local players,” he said.

“This has caused (an) unrealistic expectation from landlords as to how much a local SME would pay, pushing up the price of real estate unnecessarily.”

The impact is particularly acute for ground-floor shop lots, which businesses often prize for their visibility and pedestrian footfall.

As rents for such spaces have risen, some Malaysian tenants were forced to look for cheaper premises on upper floors, while others had to vacate their premises altogether.

The changing tenant mix highlights a broader dilemma for Kuala Lumpur as it seeks to attract foreign businesses and investment. 

At the same time, growing competition could encourage businesses to expand beyond the capital, potentially spreading investment and creating growth opportunities in other states, said the Korean embassy's Han.

For long-time local operators in Kuala Lumpur’s most sought-after neighbourhoods, the challenge is finding the staying power to keep their businesses going.