By Sharen Kaur - August 8, 2023, Publised in NST Business
bt@nst.com.my
KUALA LUMPUR: Will Menara Merdeka 118, the third-tallest tower in the world and a high-performance, energy-efficient green building in Kuala Lumpur, be fully occupied by the end of 2024?
Industry insiders raised doubt on the take-up rate for Merdeka 118, given the unfavourable market conditions and challenging global background.
"In the wake of the pandemic, some businesses went hybrid, cutting their office space by 30 to 40 per cent. Furthermore, we are aware that Kuala Lumpur has an estimated 30 million square feet of unoccupied office space, which is 10 times the Merdeka 118 tower's total floor size.
"However, given the economy's growth and the influx of new investments, I think high-value sites will continue to thrive," he told NST Property.
Meanwhile, vacant space made up 29 per cent of the 115 million square feet of office space in the city core, according to Kashif Ansari, chief executive officer (CEO) of Juwai IQI.
He said the empty spaces were situated in Kuala Lumpur's central business district, surrounding neighbourhoods, and metro area.
Kashif said that overall occupancy of office space had improved through 2022, after COVID-19 lockdowns ended.
According to KGV International Property Consultants executive director Samuel Tan, Merdeka 118 is an iconic building that is government-owned and the relevant parties will make sure it is fully occupied.
"The key tenants will attract the downlines to ensure convenience and complete the ecosystem," he told NST Property.
Merdeka 118, owned by Permodalan Nasional Bhd (PNB) via its wholly-owned subsidiary, PNB Merdeka Ventures Sdn Bhd, will be fully ready this year.
The 678.9-metre-tall Merdeka 118 skyscraper, which was designed by the Australian firm Fender Katsalidis, was formally recognised as the second-tallest structure in the world and the tallest in Southeast Asia at the Council on Tall Buildings and Urban Habitat (CTBUH) Conference 2022 in Chicago, the United States.
With a height of 632 metres, the Shanghai Tower, which was created by Gensler in China, loses its title as the second-tallest skyscraper in the world to Merdeka 118.
The title of the world's tallest building is held by the Burj Khalifa in Dubai, which measures 828 metres in height.
The development on Merdeka 118 began in 2016 on a site that looks over Stadium Merdeka, a historically significant structure created for Malaysia's declaration of independence in 1957.
The skyscraper hit a milestone this year as the final panel was securely fitted. The installation of the final panel brings Merdeka 118's crystalline façade, which is made up of about 18,000 glass panels, to 95 per cent completion.
In addition to offices, the incredibly tall skyscraper will also include a range of hospitality, retail, and residential amenities, with the intention of developing into a significant tourist attraction.
PNB will occupy 17 floors of the skyscraper. It is relocating to the skyscraper from its current location in Menara PNB, Jalan Tun Razak, which has been its home since 1985.
The relocation to Merdeka 118 will start in the fourth quarter of 2023, PNB president and group chief executive Ahmad Zulqarnain Onn said in the company's latest annual report.
"We will be fully operational in the new office by the end of the year," he said.
Ahmad Zulqarnain said KL118 is expected to attract tenants from a wide range of industries, including multinational corporations, financial institutions, technology firms, and prominent local companies that seek prestigious addresses to reinforce their brand presence.
He also said that companies looking to consolidate multiple offices or upgrade their existing spaces might also be interested in leasing at KL118.
Malayan Banking Bhd (Maybank), Malaysia's largest banking group, has announced that it will be relocating its Menara Maybank corporate headquarters in the first quarter of 2025.
Maybank will occupy 33 floors, or 650,000 square feet, in Merdeka 118.
Zerin Properties founder and group CEO Previndran Singhe said in an interview that the full occupancy of Merdeka 118 by the end of 2024 largely depends on several factors.
He said while PNB and Maybank's commitment is significant, the success of full occupancy will also require securing additional tenants from various industries.
"Aggressive marketing strategies, competitive rental rates, and outstanding building features will help attract a diverse range of tenants," he said.
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