This article first appeared in The Edge Malaysia Weekly on March 21, 2022 - March 27, 2022

THE facility management (FM) arm of UDA Holdings Bhd, UDA Dayaurus Sdn Bhd, has set a goal of carrying out an initial public offering within five years. To achieve this, the FM firm is looking to expand its customer base and move up the value chain, aiming to offer more than just “commodity” services.

COO Azrudyn Rashid says UDA Dayaurus intends to focus on higher margin jobs such as energy performance contracts (EPC). While commodity services — cleaning, landscaping and maintenance of electrical components — are essential to an FM company, he says the margins for these services are rather low at between 5% and 8%.

For an FM company to grow, it has to take on niche services such as EPC, as well as employ the Internet of Things in its solutions — such as in traffic management within a mall — and computer software to maximise the service it provides its clients while reducing wastage.

“If you talk about the bottom line for commodity services, you really need to be smart and creative about it as the margins are low, but these services are required for every facility, so they have to be provided.

“But with the employment of technology in those services, you would be able to achieve slightly higher margins. Your clients would also save a lot of money because the lifespan of their assets would be increased when you use technology to maximise the period of maintenance,” says Azrudyn.

Not many may know that UDA Dayaurus is one of the pioneers of the FM industry. The unit was set up in 1981 to manage Menara Dayabumi — once the tallest building in Kuala Lumpur — which was built by UDA in the 1980s.

Thus, UDA Dayaurus boasts of over 40 years of experience in the FM industry.

Apart from Menara Dayabumi, the company provides FM services to most of UDA’s buildings and facilities, including eight malls in Johor Baru, Ipoh and Seremban, as well as UDA’s headquarters in Pertama Complex in downtown Kuala Lumpur.

In total, UDA Dayaurus manages and maintains over 20 buildings, facilities and complexes owned by UDA.

The FM company has also ventured outside the group and secured jobs from government agencies and government-linked companies, such as the maintenance of government hospitals in Klang and Selayang in Selangor, Pahang, Kelantan and Terengganu, as well as Pos Malaysia Bhd’s headquarters.

However, the feather in UDA Dayaurus’ cap is its work at the Petronas Twin Towers. “We have more than 40 people working under the Petronas Twin Towers contract, which was secured in 2015. We do mainly mechanical and electrical works for them, but from time to time, they (KLCC Property Holdings Bhd) would ask us to do some landscaping work as well.

“It (the FM contract with KLCC Property) is quite a sizeable contract. The ‘ad hoc’ contracts also contribute a lot to the overall revenue — as much as 50% to 60% of revenue,” says Azrudyn.

Each Petronas Twin Towers contract runs for three years, and the contracts have been renewed twice so far.

Azrudyn is confident that the FM company would be able to continue to provide value to KLCC Property and secure another renewal of the contract. Nevertheless, it has developed a pipeline of possible contracts to keep growing its business, he says. “The challenge is to continue building sizeable pipelines, and you need to focus on certain key pipelines that you are working on. We must focus on those that we can win, as well as niche contracts that would give us higher value.”

Apart from bidding for tenders from the commercial sector, office buildings and hospitals, Azrudyn says the company is also looking at the education sector.

It is also working on implementing rooftop solar panels on the facilities that it maintains as part of the EPC contracts. Under such contracts, UDA Dayaurus would retrofit chillers and all the lighting systems with appliances or parts that are more energy efficient. In some cases, the company has been able to help its clients save between 40% and 50% on their electricity bills.

“We focus on EPC because it is a big win for the clients if we can do it well. We are also proposing to our clients to implement in-building network services to improve the telecommunications network reception within their buildings,” says Azrudyn.

He reveals that UDA Dayaurus has been awarded a contract to manage the entertainment hub of the Bukit Bintang City Centre (BBCC) development. The BBCC is a partnership between UDA, the Employees Provident Fund and Eco World Development Group Bhd.

Established as the Urban Development Authority (UDA) by the federal government in 1971 to advance the nation’s planned urban development of commercial and residential projects, it was incorporated as UDA Holdings Sdn Bhd in 1996 and adopted its current name in 1999. UDA is held under the Minister of Finance Inc and overseen by the Ministry of Entrepreneur Development and Cooperatives. It was publicly listed between 2000 and 2007.

Besides Menara Dayabumi, iconic buildings built by UDA include Dataran Maybank, which was the tallest building in the capital city when it was completed; Menara UBN; and the interstate bus terminal Pudu Sentral, formerly known as Puduraya Terminal.

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