Big tenants for Exchange 106
Thursday, 11 Jan 2018
About half of 106-storey building’s floor space taken up
KUALA LUMPUR: The Exchange 106 has signed up some large institutions to be its tenants as it populates the floors of the country’s tallest tower, which will be completed by the end of this year.
All of the prospective tenants who signed up are “big space users” and are predominantly from the local financial and lending sector, a source said.
They will take up between two and eight floors, with each level having a floor space of about 34,000 square feet, the largest column-less floor space in the country.
Those who need 5,000 sq ft or less are expected to be “fitted in” later on, the source said.
The source said up to 47% of the 2.6 million sq ft of the floor area of Exchange 106 has been formally signed, and 9% under negotiation.
The 106-storey building is being constructed by one of Indonesia’s largest commercial property developers Mulia Group and has an asking rent of RM17 per square foot (psf) despite current concerns of the oversupply of office space in the Klang Valley.
Such a rental would put Exchange 106 ahead of the RM13 psf sought by Menara 3 Petronas, which is part of the Petronas Twin Towers development.
Exchange 106, the 15th tallest building in the world upon completion, will top Kuala Lumpur’s league of super prime office buildings, namely, the Twin Towers, Maxis Tower and Permodalan Nasional Bhd’s Menara 118.
Although the asking rent is RM17 psf, according to Savills Malaysia executive chairman Christopher Boyd, the various incentives and favourable tax practices given to Exchange 106 are equivalent to about RM2 psf.
This means the effective rental is lower than RM17 psf.
“Mulia is benchmarking itself against some of the most famed developments around the world, the glass and steel structures in London’s Canary Wharf, The Shard, also of London, New York’s Freedom Tower which is also known as 1 World Trade Centre and Shanghai’s International Finance Centre,” a source said.
At RM17 psf, those who have taken up leases at Exchange 106 will be able to “appreciate the quality and value of that building” and the integrated development that it will be a part of, the source said.
Leasing is open from level 62 currently. The building opened for lease about a year ago.
Australian developer and infrastructure group Landlease is developing 17 acres on the Tun Razak Exchange (TRX).
TRX will also house Kuala Lumpur’s largest underground MRT station.
Mulia will be managing the building itself, from the glass cleaners on gondolas to the technicians “except the lift technicians”, a source said.
Separately, on the Ministry of Finance Inc (MoF) having a 51% stake in Mulia Property Development Sdn Bhd, the source said “that is what the documents show”.
It was reported that MoF had bought the stake from Mulia International Ltd, a unit of Mulia Group.
The Mulia Group bought the 3.42 acres in 2015 for RM665mil from the-then 1MDB Real Estate Sdn Bhd, now known as TRX City Sdn Bhd.
When completed this year, The Exchange 106, at 492 metres, will be about 40 metres higher than the Petronas Twin Towers.
The speed the building has been developed at has also been the talk of the town, averaging a floor every three days, compared with the normal eight and nine days per floor. Work is done around the clock, a difficult act to follow among the other structures in TRX.
Nonetheless, Boyd said The Exchange 106 will be ready for occupation. Exchange 106 is Mulia’s only investment in Malaysia to date.