Merdeka PNB 118 to offer new redevelopment opportunities

The completion of the country’s tallest building is expected to see the relocation of several PNB offices

By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

PERMODALAN Nasional Bhd (PNB) is mulling over the options of redeveloping some of its properties which would be affected by its eventual shift to the new corporate headquarters, Merdeka PNB 118.

The completion of the country’s tallest building is expected to see the relocation of several PNB-affiliated work- places into the multibillion ringgit skyscraper, leaving various office lots vacant.

Group chairman Tan Sri Abdul Wahid Omar (picture) said there were plans to redevelop some of the commercial blocks, pending on the completion of the mega-tower in 2021.

“We will allocate some buildings for redevelopment, depending on its location, but we still have another four years before that happens,” Abdul Wahid told a media briefing in Putrajaya last Friday.

With a floor space of over 400,000 sq m, the corporate tower — formerly known as Menara Warisan Merdeka or KL118 — is set to house offices of PNB and its group of companies.

Meanwhile, a total of 20 floors have been designated for a 250-room international luxury hotel. This leaves about 20% of total space open for leasing.

PNB group CEO and president Datuk Abdul Rahman Ahmad said the company is confident in attracting partners for its net lettable area, despite the overcapacity of office spaces in Kuala Lumpur.

Worries of oversupply had hit the office and commercial space segment, with more developments expected to come on stream — especially with the development of key projects such as Bandar Malaysia and the Tun Razak Exchange.

“There will always be demand for properties that are iconic. This is going to be the fifth-tallest tower in the world. We hope by the fourth quarter we will be able to announce the hotel.

“It’s a brand that has not been introduced here yet, so that would further enhance the value of the building,” Abdul Rahman said.

Merdeka PNB 118 has an estimated gross development value of RM6 billion. The major construction contract for the project was awarded to a joint venture between UEM Group Bhd and South Korea’s Samsung Construction and Trading Corp last year.

On a separate note, PNB said its plan to divest two of its property assets in the UK was to take advantage of continuing strong demand for UK properties despite concerns over Brexit.

Based on existing market value of the properties, PNB said it stands to realise equity investment gains of more than 20% internal rate of return per annum benefitting from capital appreciation, effective financing structure and foreign-exchange gain.

“This strategy, however, is subjected to PNB receiving offers that are attractive and that meet our expectation. This is especially since PNB would be happy to retain the properties, given they continue to provide attractive cash dividend yield to PNB,” the company said.

The proposed disposal of its office blocks it bought in 2012 at One Silk Street and 90 High Holborn in London had attracted flak from certain quarters who queried the need to profit on the buildings after the hassle of acquiring a US$1 billion (RM4.2 billion) for the purchases.