TRX City Sdn Bhd, master developer of the 70-acre Tun Razak Exchange (TRX), is going to build another office tower, which is expected to have a net lettable area (NLA) of 800,000 sq ft. The new building will be on Lot C7-10, which is adjacent to HSBC Malaysia’s headquarters, Menara IQ.

The project has raised eyebrows, given the ample vacant office space within TRX itself and Greater Kuala Lumpur. Indeed, it has been challenging for Mulia Property Development Sdn Bhd to fill The Exchange 106.

The iconic office tower was completed in 2019 with a total NLA of 2.6 million sq ft. It still has an NLA of about 1.2 million sq ft.

Furthermore, the 35-storey Menara Affin is said to have an occupancy of 65%, with a remaining NLA of 300,000 sq ft.

However, according to sources, TRX City has already secured a long-term anchor tenant for the new office building.

PricewaterhouseCoopers Malaysia Holdings Sdn Bhd (PwC Malaysia) recently signed a lease with TRX City for 200,000 sq ft, or 25% of the NLA of the new office building that is scheduled for completion in 2027, a source familiar with the development tells The Edge.

It is understood that PwC’s current tenancy in Menara TH 1 Sentral in KL Sentral will expire in May 2027. The Edge understands that the lease on TRX City’s Lot C7-10 is priced at around RM8.50 psf for a duration of 12 years at the minimum.

For comparison, Menara Prudential in TRX is said to have a rental rate of roughly RM8 psf.

According to a listing online for 17,000 sq ft of office space in Menara TH1 Sentral, the asking rent is RM6.50 psf.

PwC was not available for comment when contacted, while TRX City had not responded to The Edge’s questions at press time.

Knight Frank Malaysia is the agent handling the deal but when contacted, the spokesman declined to comment.

This will be TRX City’s second office block there. Its first was Menara Prudential.

According to industry sources, PwC was initially looking at another office building known as The Exchange TRX Campus Office, which is owned by Lendlease. It is a smaller office block with about 200,000 sq ft, to which PwC could have secured the naming rights. However, it was a no-go for PwC because of the lack of space for future expansion.

The Edge reported on Dec 2 that Ant International is taking up 62,000 sq ft, or three floors, in Exchange 106. The financial technology giant is expected to move in around the first half of next year. The latest tenant will help to raise the skyscraper’s occupancy rate to 52%, according to sources.

Aside from Ant International, the Bin Zayed International Group of Companies (BZI) of the United Arab Emirates is also setting up a local outpost in Exchange 106, occupying 29,000 sq ft, one floor of the office tower.

Mulia Property expects Exchange 106’s occupancy to reach 70% by the end of 2025. Citing Knight Frank Malaysia’s real estate report for 1H2024, the asking monthly gross rent for the tower is the highest in the country for office space, at an estimated rate between RM10 and RM15 psf.

Mulia Property is 51%-owned by the Ministry of Finance and 49%-owned by Indonesia-based Mulia Group. To recap, Mulia Property signed a lease and purchase agreement for the development rights of the land back in May 2015 for The Exchange 106, then known as the TRX Signature Tower.

Source: The Edge Malaysia, December 16, 2024