This article first appeared in City & Country, The Edge Malaysia Weekly on July 29, 2024 - August 4, 2024

It is a challenge to manage and maintain an old office building, especially post-pandemic where flexible working arrangements have become the trend and with the growing emphasis on green features. Nevertheless, AmREIT Managers Sdn Bhd, the manager of AmFIRST Real Estate Investment Trust, is unfazed in the case of Menara AmBank on Jalan Yap Kwan Seng.

One of the efforts the trust manager has been working on with its property manager Knight Frank Property Management Sdn Bhd (KFPM) is incorporating green features in the building. AmREIT Managers CEO Chong Hong Chuon says its green journey began when it applied for a grant from the Sustainable Energy Development Authority in 2022.

“We were the very first few batches to get this grant, and a green consultant was appointed to carry out a building energy audit. A gap analysis was done and recommendations were made. The gap analysis tells us that we are sitting at a very comfortable level to get accreditation from a green body. We would like to see where this building stands in terms of ESG (environmental, social and governance),” Chong says.

“Of course, we also want to be a responsible asset owner. Hopefully, with this effort, we can showcase and improve the marketability of this building, especially with tenants who are environmentally concious or want to be in a building that complies with ESG components.”

Menara AmBank has gone through several upgrading works, including the adoption of green building practices and energy-efficient initiatives, to offer a sustainable working environment. These works include major LED lighting replacement and air-conditioning duct cleaning; staggering of air-conditioning operation time to reduce maximum demand; rescheduling of water pump operation hours to after office hours; turning off some of the lifts during off-peak hours; and implementing motion sensors for the lighting of common washrooms.

For its efforts, it was recently awarded the Energy Management Gold Standard (EMGS) of 2-star certificate by Malaysian Green Technology and Climate Change Corp, which recognises excellence in energy management of a building.

It is currently retrofitting the air-conditioning system from a water cooled packaged unit system to a chiller system to achieve higher energy efficiency and reduce carbon emissions, while addressing occupants’ concerns on the system’s performance.

Chong says the cost of retrofitting a building into a more sustainable one is expensive but as energy costs rise, green proposals become more feasible, and building owners are taking a long-term view on the return on investment.

KFPM managing director (property management) Kuruvilla Abraham applauds the move. “That’s a testament to AmREIT Managers, because most people look at older buildings and say there’s no hope of getting any green accreditation or it’s too expensive to do it. But their commitment shows that they are heading towards getting some level of recognition.

“It gives hope to the market, especially for the older buildings, that there is a way to get some recognition. You can own an older building and just let it run down or run as it is … but improving it helps increase the asset’s value, making the building more marketable. It’s not just about the whole ESG agenda.”

Menara AmBank receives Special Mention in the 10 Years And Above — Non-strata Office category of The Edge Malaysia Best Managed & Sustainable Property Awards 2024.

A stone’s throw away from the Petronas Twin Towers, the 49-storey Menara AmBank was completed in 1996 and boasts a total net lettable area (NLA) of 458,450 sq ft. KFPM has been the property manager since August 2016. The occupancy rate is 71%, with AmBank Group being the anchor tenant, occupying about 64% of the total NLA. Other tenants are clinics, dental services, a café, food court and convenience stores.

Kuruvilla notes that a challenge in the early days was managing underperforming service providers. This led to numerous Performance Improvement Plans (PIPs) that were in line with its vendor management policy and many sessions were carried out in the presence of AmREIT Managers to improve their performance.

He says: “For certain service providers that still failed to meet the building’s expectation despite undergoing PIPs, we initiated the termination processes and subsequently procured new service providers via our procurement process. Our procurement function also encompasses the evaluation and monitoring of vendors appointed for Menara AmBank. The site team conducts regular performance evaluations and we had previously replaced pest control and firefighting service providers.”

Works undertaken included water pump upgrading in 2018; lift modernisation in 2019; upgrading of undersized filter driers of the air-conditioning system in 2020; repainting of car park levels in 2021; and high-tension system upgrading in 2023.

Chong believes collaboration between the asset owner, property manager and tenants is important in making the building a desirable and successful location. One of the best examples is obtaining the EMGS of 2-star certificate, whereby the anchor tenant AmBank Group has also put in place green practices within the company.

To draw a wider range of tenants, AmREIT Managers is now in advanced talks with a co-working operator to take up a floor in Menara AmBank. Chong says: “We feel that probably there is demand for this kind of short-term, flexible office space; so, why not we tap the demand. [If the deal goes through,] this operator will take up one full floor, which is about 12,000 sq ft, or 2% to 3% of total NLA.”

Other than the upgrading of the air-conditioning system, he is looking to further expand its green building certifications and sustainability initiatives, as well as strengthening tenant engagement and communication to better understand and meet their needs.

Kuruvilla adds that, while continuously seeking other opportunities to enhance Menara AmBank, there will be enhancement of building façade lighting and replacement of the water piping system to improve the building’s performance.

“In line with AmREIT’s direction, we steer ourselves towards enhancing the building’s energy efficiency as well as procurement of green certifications to further unlock the building’s potential and secure a placement in the market with a growing consciousness in environmental sustainability,” he says.

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