JLL Research Report. A new CBD in the making

Transcription

1 JLL Research Report A new CBD in the making

2 Introduction Globalisation and the economic expansion of Malaysia attracted many international businesses, especially in the service sector, to Malaysia. This white paper discusses the traditional CBD; how the Petronas Twin Towers changed the city s landscape and explores how PNB 118 will change the city with its offerings. 2 JLL

3 Traditional CBD Before the iconic Petronas Twin Towers were built, the 1995 Kuala Lumpur City Centre Master Plan saw the transformation of the old Kuala Lumpur into a worldrenowned sub-market. The transformation of the KLCC sub-market by the Petronas Twin Towers into a prestigious address, and one of the most prominent addresses, in Malaysia has attracted demand for commercial space, especially Grade A office buildings, in this sub-market to serve local and foreign MNCs in the oil and gas industry as well as the financial industry. Limited supply of Grade A office buildings and the scarcity of land within the city during that time stimulated the growth of skyscrapers in the vicinity, as evidenced by the emergence of high-rise skyscrapers in the past decade. 1 The KLCC development has induced the growth of other skyscrapers in close proximity and will continue to be the catalyst for growth in the city. Petronas Twin Towers officially opened in , built to house the headquarters of Petronas, the national petroleum company of Malaysia. The twin towers are identical, with an eight-lobed circular structure that contains 88 storeys of occupied space and a pyramid-shaped pinnacle topped by a slender steel spire. Each of the buildings is supported by 16 large columns around its perimeter. The rest of the frame is made of high-strength, steel-reinforced concrete. Aside from that, the exterior façade consists of stainless steel and glass. Linking the two towers together on the 41st and 42nd floors is a two-storey sky bridge that provides a spectacular view of the city centre. 3 Prior to the construction of the world s tallest tower, the CBD had a much lower skyline largely comprising a financial district occupied by banks, insurance companies, shopping areas and hotels. Once built, the Petronas Twin Towers became home to oil and gas companies and their vendors, an industry that contributed more than 40% of Malaysia s GDP prior to There are currently 16 high-end mega skyscrapers slated for completion by 2020, with the most prominent being the Exchange 106 and PNB 118. The Exchange 106 will be one of the tallest buildings in Kuala Lumpur on completion while PNB 118 will overtake the height ranking of KLCC, making it the tallest building in Malaysia A new CBD in the making 3

4 PNB 118 KLCC has been the star of Malaysia for almost 20 years. It is about time for a new star to make its debut. Eclipsing the height of the Petronas Twin Towers will be a new tower built by the owner, Permodalan Nasional Berhad (PNB), called PNB 118. The 118-storey tower stands at 635 m tall with an estimated gross development value of MYR 3.5 billion. The height will make PNB 118 the third tallest building in the world on completion. This project sits on a 19-acre plot of land about 4 km from the Petronas Twin Towers. The Merdeka 118 Project was announced back in 2016 and is divided into three phases. The first phase of the project will involve PNB 118, major infrastructure improvements and roadworks to improve accessibility for the vicinity and a retail mall, scheduled to be completed in 4Q Built to house PNB s headquarters, its subsidiaries and other prestigious companies, the tower consists of a reinforced concrete core with eight mega-columns. A structural steel system comprising six belt truss zones, three outrigger zones, composite floor decks and extensive roof framing make up the main structure. The superstructure is supported by a 4-m-thick raft foundation slab and 137 cast-in-place bored piles, each 2.2 m in diameter and extending 60 m in length. There are 936 cast-in-place bored piles that serve as the foundation for the car park and podium structure. 5 This project is being constructed beside two historical stadiums (Stadium Merdeka and Stadium Negara). Stadium Merdeka was where Malaysia s independence from Britain was announced on 31 August The PNB 118 tower, on completion, will add about 1.8 million sq ft of office space into the market. PNB 118 will be the headquarters for PNB, with about 77% of the office floors occupied by PNB and its subsidiaries. The consolidation of PNB and its subsidiaries into a single location may simulate the same effect as that in KLCC with oil and gas companies and their vendors, driving the main vendors of PNB and its subsidiary companies to relocate there. From the tourism aspect, PNB 118 will be the new iconic building of Malaysia that will redefine the Kuala Lumpur skyline, so one would expect the development to feature unrivalled specifications. Like Menara KL and the Petronas Twin Towers, the upper levels of PNB 118 will include an observation deck the highest in South East Asia. A sky lobby, restaurants, podium and amenities will be developed to offer unparalleled views of the Malaysian capital city. To get closer to the promised Kuala Lumpur panorama, the lift will allow a unique experience from the ground. Made of glass and steel, visitors will have the opportunity to see the Kuala Lumpur skyline extend as the lift elevates them closer to the sky. The birth of yet another iconic building will definitely attract investors and tourists, which will further boost the economy of Malaysia. 5 Merdeka PNB 118 Case Study Adding value to the growing city CTBUH Research Paper 4 JLL

5 Connectivity and accessibility KLCC The KLCC area is easily accessible by public transport and has excellent connectivity even if you drive. For rail commuters, the area is served by the Kelana Jaya Light Rail Transit (LRT) line that connects directly to the KLCC LRT station. KLCC is also bordered by several main roads, namely Jalan Ampang, Jalan Sultan Ismail and the Ampang-Kuala Lumpur Elevated Expressway (AKLEH). In addition, KLCC has built an underground tunnel to connect the area to Jalan Ampang directly. These transportation options aid in bringing the tourists, residents and office crowd to Suria, the shopping mall in KLCC. Suria KLCC is served by the LRT line, with the KLCC station directly below the 1,187,000 sq ft mall. The 95%-occupied retail mall situated below the Petronas Twin Towers serves as the main shopping attraction within the city centre. In March 2017, Suria KLCC recorded gross sales exceeding MYR 2.5 billion, more than 10% growth in the retail segment s moving annual turnover year on year. 6 Since completion, the Petronas Twin Towers have become the main tourist spot in Kuala Lumpur, with visitors flocking into the development to get a glimpse of the world s tallest twin towers. The Kelana Jaya LRT that passes through KLCC has been operating since 1999 and records a daily ridership of 229,000 commuters. 6 A new CBD in the making 5

6 Connectivity and accessibility PNB 118 The construction of PNB 118 will have well-planned access, especially by rail. The PNB development is backed by two rail lines, the Mass Rapid Transit (MRT) 1 Sungai Buluh-Kajang line (SBK) and the MRT 2 Sungai Buluh-Serdang-Putrajaya line. The accessibility provided by both new MRT lines and the existing rail lines into PNB 118 will drive demand for office space at PNB 118 as it would attract talents to the submarket. Aided by the connectivity from the rail lines and infrastructure improvements by road and the right tenant Q 2Q 3Q 4Q LALUAN MRT SBK 1,505,856 1,161,218 9,318,373 10,365,061 According to Suruhanjaya Pengangkutan Awam Darat (SPAD) data on the ridership of MRT 1, which has been fully operational since July 2017, there were a total of 9.3 million passengers and 10.4 million passengers in 3Q17 and 4Q17, respectively. 7 Upon the full completion of the MRT in 3Q17, a ninefold increase in ridership was observed. MRT 2 will serve a corridor with a population of around 2 million stretching from Sungai Buluh via the CBD of Kuala Lumpur to Bandar Malaysia, Kuchai Lama and Serdang before ending at Putrajaya. The 52.2-km line is expected to have a ridership of 529,000 passengers per day. 8 Aside from the MRT 1 and MRT 2 lines that connect directly into the development, PNB 118 is only a short walk from existing established rail lines. The KL Monorail line, Kelana Jaya line and Sri Petaling line offer connectivity to the development, with the nearest stations being Maharajalela, Pasar Seni and Plaza Rakyat, respectively. mix of the 1 million sq ft retail mall supporting the PNB 118 tower tenants, PNB 118 will be positioned to be the upcoming iconic location in Kuala Lumpur. We have seen the success of some of the integrated concepts with convenient amenities and good connectivity in the fringe areas of Kuala Lumpur and we believe that the same is likely to hold true for PNB, which has an added locational advantage of being nearer to KLCC (both by MRT and by vehicle). The high visibility of the country s tallest tower will also work in the favour of office tenants who are highly brand-conscious and place visibility as their top priority when locating in the CBD. 7 Statistik%20Rel%20%20Excel/Data%20Rel%20Q1%20-%20Q4%20 Tahun% xlsx&Source=http%3A%2F%2Fwww%2Emot%2Ego v%2emy%2fen%2fresources%2frail-statistic JLL

7 Conclusion Skyscrapers have a powerful role in revamping the physical landscape of a city, transforming the skyline and catalysing urban growth. The birth of yet another iconic building, PNB 118, is set to regenerate the older part of the city centre and bring the real estate landscape in Kuala Lumpur to new heights. The development will bring in office and retail space as well as residential developments. All of these components, which enable people to live, work and play, further strengthened by the well-planned accessibility and connections, are in line with the lifestyle expectations of the millennial workforce generation and the nation s ambition to enhance the city s liveability. We are currently witnessing the rise of the next CBD, the imminent success of PNB 118. Author Gregory Wong Assistant Manager Research and Consultancy Department A new CBD in the making 7

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