This article first appeared in The Edge Malaysia Weekly on June 16, 2025 - June 22, 2025
PERMODALAN Nasional Bhd (PNB) is putting its long-delayed Project 1194 on the market, with industry sources estimating the mixed-use development — comprising a 50-storey, 481-room luxury hotel and a redeveloped 35-storey office tower — could fetch about RM1.4 billion. The former site of the Malaysia Airline System Bhd (MAS) headquarters in Jalan Sultan Ismail, Kuala Lumpur, was acquired for RM130 million in 2006.
When contacted by The Edge for confirmation of the sale, PNB says in an email reply that the building is expected to receive a Certificate of Completion and Compliance in the last quarter of 2025. “Following that, the hotel operator will be able to commence its pre-opening preparations.”
It has taken almost two decades for PNB Project 1194 to be completed. It is understood that work on the project began in 2012. According to reports dating back to 2019, PNB signed a management agreement with Hilton Hotels and Resorts to open Conrad Kuala Lumpur, making it the first Conrad Hotel & Resort, Hilton’s global luxury brand, in the country. Conrad Kuala Lumpur will be part of Hilton Honors, the award-winning guest loyalty programme for Hilton’s 17 distinct hotel brands.
PNB told The Edge last year that Menara 1194, the 35-storey office tower, would comprise 25 floors of office space with a total net lettable area (NLA) of about 170,000 sq ft. In the adjoining 50-storey hotel would be 481 rooms with amenities, including a banquet hall that can accommodate 500 guests, gym, 25m infinity pool, four dining outlets and 12 multifunctional rooms. The development was expected to open its doors in August last year. The cause of the delay is unknown.
The main contractor of the project — Ahmad Zaki Sdn Bhd, a wholly-owned subsidiary of Ahmad Zaki Resources Bhd (KL:AZRB) — has faced financial challenges in recent years. As at Dec 31 last year, AZRB’s loans and borrowings stood at RM2.79 billion, including current borrowings of RM311.28 million. Of the current borrowings, RM132.58 million was the outstanding balance under a high-interest revolving credit facility.
The strata offices in Project 1194 could be priced at about RM1,300 psf, according to a local agent. For the hotel, bearing in mind that 481 keys is a significant deal size, the agent cited the 55-room Banyan Tree Kuala Lumpur, at RM2.5 million per key, and 150-room W Kuala Lumpur at about RM1.8 million per key, as possible benchmarks.
Pavilion Real Estate Investment Trust (KL:PAVREIT) acquired Banyan Tree Kuala Lumpur (RM140 million) and Pavilion Hotel Kuala Lumpur (RM340 million) at the end of last year. IOI Properties Group Bhd (KL:IOIPG) acquired W Kuala Lumpur from Tropicana Corp Bhd (KL:TROP) for RM270 million at the end of 2023. Asked about the selling price of Project 1194, PNB said in its email that it is the group policy not to comment on the valuation or pricing of assets.
On why Project 1194 is being put on the market now, the fund management company says, “As part of PNB’s routine operations as an investment manager, we regularly evaluate opportunities to buy and sell assets to achieve target returns and maintain a healthy portfolio. Therefore, any consideration of acquiring or divesting assets such as PNB Project 1194 will be carefully assessed to align with our investment objectives.”
The Edge understands that Knight Frank Malaysia is the exclusive marketing agent for the sale of the project. Knight Frank declined to comment.
Insurance provider Generali Malaysia recently moved its headquarters to Menara Generali, which is located beside PNB Project 1194, to consolidate its general and life insurance operations under one roof. Generali Malaysia’s move involved the relocation of more than 1,000 employees from four premises to the new headquarters, which was formerly Menara Dion, a 37-storey office building with a NLA of 400,000 sq ft that was completed in 1997.
Just across the road from PNB Project 1194 is the PNB-owned CIMB Hub, a 22-storey office building and a four-level podium block with six levels of parking. CIMB Hub, which has a total NLA of 360,000 sq ft, was refurbished in 2021. PNB itself relocated from the 40-storey Menara PNB in Jalan Tun Razak, which it occupied since 1985, to the iconic Merdeka 118, where it occupies 17 floors, at the end of 2023.
In its 2024 integrated report, PNB says Malayan Banking Bhd (KL:MAYBANK) will move its corporate headquarters from Menara Maybank to Merdeka 118 in the first half of 2026 and occupy 33 floors, or almost 650,000 sq ft.
PNB, via its wholly-owned subsidiary PNB Merdeka Ventures Sdn Bhd, is the developer of Merdeka 118. It is also the owner and sole custodian of Stadium Merdeka and Stadium Negara. The iconic Stadium Merdeka reopened to the public in August last year after restoration works were completed.
After Maybank moves out of Menara Maybank early next year, according to PNB’s president and group chief executive Datuk Abdul Rahman Ahmad, PNB will take over the leasing of the building for 10 years, effectively becoming its asset manager. Ultimately, the expectation is that PNB will help Maybank lease out the building. The asset manager will also try to look for a potential buyer over time, Abdul Rahman told The Edge in an interview in February.
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