KL118 to be built by Samsung and UEM – RM2.12 Billion.

I like KL118. Regardless of what the comments may be, I still like KL118. It’s like those who debated so much about Petronas Twin Towers’s disadvantages and yet today, Petronas Twin Towers is already an icon of Malaysia. Thus, I was waiting for more news about it and today I read in The Star that someone has won the tender to build it! The consortium of South Korea-listed Samsung C&T Corp and its local partner UEM Group Bhd is said to have won the RM2.12 billion (US$505 million) construction job. As usual, the news article mentioned that KL has a glut in office space and a soft property market. Seriously, should this be built only during boom times? So that when it completes, it will be duing a slow period? Haha.

According to the article, there were initially six parties bidding for the construction portion of the skyscraper including Samsung-UEM. These other bidders include familiar local names together with their partners. They include IJM Corp-Norwest Holdings Sdn Bhd-Shimizu Corp, Malaysian Resources Corp Bhd-China State Construction Engineering Corp, WCT Bhd-Arabtec Construction LLC, TSR Capital Bhd-Daewoo Group and Seacera Group Bhd-Spaz Sdn Bhd-China’s Sinohydro Corp-Shanghai Construction Group. By the time its completed in 2019, KL118 would be Malaysia’s tallest building at over 500 metres tall. It’s taller than the Petronas Tin Towers too but it is okay, our twin tower would remain tallest TWIN TOWERS for a very long time more to come.

The whole development would have a gross development value of over RM6 billion and will be owned by Permodalan Nasional Berhad. Total net lettable area for office space alone is 150,000 sq m. This excludes the hotel portion. As expected for any major development these days, it will be conncted to a MRT station. The 20 floors allocated for a 250-room hotel would be operated by an international luxury hotel group. The winner Samsung C&T has past experience with the construction of skyscrapers, which include the Petronas Twin Towers and the Burj Khalifa in Dubai which at a height of 828 metres is the tallest building in the world.

Seriously I think those with landbanks nearby KL118 have better keep it for a while. Those properties with a great view of the future KL118 may also want to start renovating their homes and continue staying there. There is little need to look too far, just look at the examples from Petronas Twin Towers and how KLCC as an area has changed many developments beside, around and overlooking it. More offices does not mean glut of office. More office space simply meant the not good enough ones just have to change or be changed. In fact the only sign that I would accept for the argument of an office glut is an ever reducing office rental rates. If rental rates remain the same or even increasing for some office buildings, it’s a very funny situation. There’s a glut and offices refuse to move and is willing to pay more year after year? Happy reading.

written on 28 Oct 2015

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