The 100-storey tower that forms part of Warisan Merdeka will be the new headquarters of Permodalan Nasional Bhd (PNB) as the fund manager is already thinking about redeveloping its existing head office.
Come 2016, its main building on Jalan Tun Razak, Kuala Lumpur, will be 30 years old. It is already fully occupied by PNB and its companies.
"We have to ensure we have occupancy. We need to move to this place. It will be mainly used by us and our investee companies," group chief executive officer Tan Sri Hamad Kama Piah Che Othman said at a briefing in Kuala Lumpur yesterday.
Warisan Merdeka, a 10-year mixed-development project estimated to cost RM5 billion, will be PNB's single biggest property project to date. Its construction is set to create some 5,000 jobs.
The tower alone, of about 525 metres, makes up half of the cost. The project will be done by PNB's wholly-owned PNB Merdeka Ventures Sdn Bhd, but it is open to having partners.
It may also sell part of the 14.6ha site, but this has yet to be finalised as it also wants to have recurring income from the properties.
"We must make sure returns prevail," Hamad Kama Piah said, adding that 8-10 per cent a year would be a good rate.
More importantly, Warisan Merdeka will boost the prices of residential, office and retail properties in the Golden Triangle, especially the Jalan Hang Tuah area, Pudu and Imbi, said Zerin Properties founder and chief executive officer Previn Singhe.
Property valuers said property prices shot up when the Petronas Twin Towers was built in 1985. Some foresee Warisan Merdeka to be the next KLCC.
"We need to look at the project very objectively. New York had five tallest towers in the world at any one time and they are all doing well," Previn said.
The land price in the Golden Triangle area is currently around RM2,000 per sq ft, while the net lettable area of a top office building is about RM800 per sq ft.
But valuers who were not so bullish said the key challenge is how to deal with traffic flow.
"You must look at the project site. It is very dense and road access and public transportation is limited. If the government can improve that, then we will have a different price outlook," said a valuer who declined to be named.
This was acknowledged by Hamad Kama Piah, who stressed that PNB has consultants working on the traffic issue. The cost of improving infrastructure in the area has also been factored into the overall RM5 billion cost, he explained.
By Business Times
