This article first appeared in City & Country, The Edge Malaysia Weekly on July 17, 2023 - July 23, 2023

The Malaysian office property market is undergoing a challenging period. Not only is there more incoming supply while the absorption rate remains slow amid the market recovery from the pandemic, but shifting market behaviour and office space preferences have also put pressure on many building owners in town.

Nonetheless, Pelaburan Hartanah Bhd (PHB), owner of Menara 1 Sentrum in Kuala Lumpur, seems unperturbed as rental and occupancy rates for the building rose organically throughout the pandemic.

“We were affected by the pandemic like everyone else, but we are grateful that the impact on Menara 1 Sentrum has not been as severe for us. In the past five years, we have only had two tenants move out due to business rationalisation. Other than that, our occupancy rate actually improved to 97% currently from 87% in 2020,” PHB group managing director and CEO Mohamad Damshal Awang Damit tells City & Country.

Menara 1 Sentrum won Silver in the Below 10 Years — Single-owned Office in a Mixed Strata Development category for The Edge Malaysia Best Managed & Sustainable Property Awards 2023.

Menara 1 Sentrum is a purpose-built, Grade-A commercial office building located within the KL Sentral central business district on the pivotal point along Jalan Tun Sambanthan. The building is connected to NU Sentral Shopping Mall and KL Sentral Station with multiple connectivity options, such as MRT and LRT access, KL Monorail and KLIA Express.

Completed in 2013, Menara 1 Sentrum boasts a net floor area of approximately 425,000 sq ft and a large floor plate of column-free office space with built-ups ranging from 16,000 to 18,000 sq ft. The office floors start from Levels 6 to 31, while Levels 1 to 5 make up the mall. There are also four levels of basement parking. The office component is divided into low and high zones, offering common facilities such as a sky lounge lobby on Level 6, 24-hour security, a programmable destination cased pro-logic lift system and an integrated smart card access system.

“The building is slightly under 10 years old, but we take pride in its fairly well-maintained condition. [Therefore,] we didn’t have much upgrading work in the past. However, as some of the fixtures and facilities are at the end of their lifespan after 10 years, we foresee there will be more upgrading projects, for which we’ve already planned in terms of execution and budget allocation,” Mohamad Damshal shares.

He adds that with the assistance of the appointed building management company — Knight Frank Property Management Sdn Bhd (KFPM) — Menara 1 Sentrum is maintained under a planned operating expense budget and always has a five-year capital expenditure budget plan.

Established in 2016, KFPM currently manages a portfolio of office, retail and residential properties in excess of 32 million sq ft of net lettable area across Malaysia. Although it only took over the building management role for Menara 1 Sentrum in 2020, PHB is satisfied with its high standard of services, good industry experience and well-established, professional management system.

“Many of our tenants are MNCs [multinational corporations], which expect an international standard of building management service. This is also why, when we were selecting our building manager, we benchmarked our criteria against the international standard,” Mohamad Damshal explains. “We believe quality speaks for itself; only a well-managed building will attract quality tenants and continue to win their loyalty. This is evident from our list of MNC tenants, some of whom have been with us for many years and keep expanding their space here in Menara 1 Sentrum.”

Though he declines to disclose the key MNC tenant in Menara 1 Sentrum due to security concerns and a non-disclosure agreement between the building owner and its tenants, Mohamad Damshal shares that office space in the building has always been in high demand and that some potential tenants have waited months to secure a lease.

Apart from the strategic location, Mohamad Damshal attributes the “happy problem” to the overall package of the building: tight security; Malaysia Digital status (formerly known as MSC status); in accordance with Leadership in Energy and Environmental Design standards and Malaysia Green Building Index requirements; practical layout; and tip-top property management service.

“It is never an easy task to upkeep a building. Aside from the day-to-day building maintenance, tenants count on immediate action or measures when the unexpected happens,” Mohamad Damshal notes.

For example, during the Covid-19 outbreak, PHB reacted quickly to further improve ventilation and indoor air quality to mitigate airborne transmission of the virus and other diseases within the building. In addition to adopting guidelines issued by the Ministry of Health, KFPM also went the extra mile to ensure the hygiene and safety of all building occupants, such as by installing air ionisers in common areas and scheduling maintenance and servicing of the air-conditioning and mechanical ventilation system.

The heart of this operation, which comes from the building control system, has also been closely monitored, especially the CO2 level in the air handling unit and fresh air intake reading. KFPM ensures the data is properly recorded and the settings of each operation system are accurate as per the specification.

“PHB is quite generous in terms of expenditure to upkeep the building because we see the value in upgrading and enhancing projects that benefit our tenants and us in the long run. Of course, we have a yearly capex budget but are not afraid to commit ourselves for the comfort and safety of our tenants, who have entrusted and stayed with us for many years,” Mohamad Damshal says.

He adds that the office property segment is having a trying time with more supply than demand. “It is true that there are more incoming new office spaces with attractive lease packages and smarter building technologies; hence, we have to constantly review and enhance our capabilities, be it in software or hardware.”

PHB plans to enhance the green features of Menara 1 Sentrum, such as by installing solar panels and a rain harvesting system, to reflect its commitment to the environment and stay relevant in the current competitive office market. Apart from that, it realises the importance of ensuring cost efficiency and optimisation, particularly when economic conditions are adverse.

“While cost-cutting is solely focused on reducing expenditure, cost optimisation is broader in scope. As well as cutting costs, cost optimisation activities can include the reallocation of funds so that investment in one area leads to even greater savings in another area,” Mohamad Damshal says.

There are several initiatives implemented in Menara 1 Sentrum to ensure cost optimisation is achieved, such as the adoption of the building automation system, motion sensor lighting within washrooms, a centralised air-conditioning system with variable refrigerant volume and the use of energy-saving lights.

Apart from that, every element of Menara 1 Sentrum’s design has been carefully considered, right down to the external metal louvre screens, which provides a unique aesthetic feature and sun shading system. This ultimately makes the indoor environment better for occupants as it balances the temperature, humidity and intensity of light. All these render Menara 1 Sentrum an energy-saving building where less electricity is consumed by offices due to proper sun shading around the building.

“Though Menara 1 Sentrum is not the latest, newest offering in the market, we take pride in it. What’s more important to us are the satisfaction level of our tenants and management quality, which has been reflected positively in our yearly tenant satisfaction survey,” says Mohamad Damshal.

He adds that winning the award is another recognition for the team, which has been working hard to meet the expectations of tenants. It is also an affirmation of PHB’s strategy to provide only the best to its tenants.

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