The Exchange 106 (formerly TRX Signature Tower) was bogged down in the 1MDB scandal; but now, Malaysia’s tallest office tower is finally complete. And the developer’s making clear that 1MDB is behind them:
(Featured image by Nimal Skandhakumar, Creative Commons)
What is The Exchange 106?
It’s currently the tallest skyscraper in the Tun Razak Exchange (TRX), a planned financial hub in Kuala Lumpur. The building is 106 storeys, reaching 492-metres (yes, it’s taller than the Petronas Towers). The entire office development has a net lettable area of around 2.6 million square feet.
The development has a troubled past. Remember the 1MDB fund, which saw a few billion dollars go missing? Well the whole of the TRX district had been under 1MDB. And back in July 2017, the Malaysian government – under then Prime Minister Najib Razak – bought a 51 per cent share in Mulia Property Development. This deal included the joint development of The Exchange 106 with Mulia Group.
Just two months after acquiring the 51 per cent stake, the former Prime Minister was ousted in a general election. You could probably see the surge in high blood pressure pills being prescribed to everyone involved, not least the financiers.
Anyway, all of that’s over now – Mulia Group has mentioned that the “spectre of 1MDB” is behind them; and Malaysia’s current Minister of Finance, Lim Guan Eng, said in February that TRX has been cleaned of the “taint” of 1MDB.
Who’s moving in?
We understand that tenants were picking offices early, with about half the floor space already taken up in January 2018. Most of these are from banks, one of which is supposed to be taking up eight floors.
Mulia says that at present, a fifth of the total space (520,000 square feet) is already booked by tenants, who will start moving in between this December and June of next year. Mulia is expecting a take-up of about 1.3 million square feet by end 2020.
Besides banks, it’s been revealed that incoming tenants could include a co-working space, a serviced office provider, several ecommerce companies, a Hong-Kong based personal care company, and an un-named Fortune 500 company.
Will this be of interest to Singaporean companies?
Singapore’s major financial institutions will definitely be interested, by virtue of it being in the heart of KL’s new financial district. There’s an added appeal in that KL office rents are cheap at the moment, having come under pressure from oversupply since early this year.
Conversely, office rental rates in Singapore are at a record high (a 10-year high in July in fact); this is on the back of more tech companies moving in, and increased take-up from co-working space sector. While it’s hard to see rental rates going any higher, the momentum could be sustained with initiatives like Tech@SG, which expedites work passes for some foreigners. The Tech@SG pilot will commence in end 2019.
What do you think of The Exchange 106? Voice your thoughts in our comments section or on our Facebook community page.
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