Bursa Malaysia mulling move to TRX
This article first appeared in The Edge Malaysia Weekly on June 17, 2024 - June 23, 2024
BURSA Malaysia Bhd (KL:BURSA) is contemplating moving its headquarters to The Exchange 106 at the Tun Razak Exchange (TRX) in Kuala Lumpur.
The bourse operator and Mulia Property Development Sdn Bhd are in the final stages of negotiations on the move which, if it materialises, will likely see Bursa Malaysia occupying two storeys of the superstructure, say sources. It is also likely to take up part of the lobby area for the listing ceremonies of companies making their debut on the exchange.
Bursa Malaysia confirmed that discussions on the move to TRX are still ongoing. “We have been approached and are in discussions. However, it is too preliminary to share any comment at this juncture,” the stock exchange operator tells The Edge in an email reply.
Mulia Property is majority-owned by Minister of Finance (Incorporated) (MoF Inc).
“It has always been the plan to have Bursa Malaysia at the TRX development.When The Exchange 106 tower was being built, part of the lobby was designed for Bursa Malaysia to undertake initial public offerings (IPOs),” says a source.
“The TRX development was to create a new financial and business hub, which made Bursa Malaysia one of the important components of the development,” another source says about The Exchange 106, which is the centrepiece of TRX.
TRX, which has a gross development value of RM40 billion, was conceptualised as the financial and business hub of the Klang Valley.
The listing ceremonies of companies making their debut on the stock exchange are currently held at the Bursa Malaysia building at Exchange Square in Bukit Kewangan, Kuala Lumpur.
In 2018, MoF Inc, via its unit MKD Signature Sdn Bhd, bought a 51% stake in Mulia Property from Indonesia-based Mulia Group and jointly developed The Exchange 106. The remaining 49% stake is owned by Mulia Group. Three years earlier in 2015, Mulia Property bought 3.42 acres of TRX land for RM665 million from TRX City Sdn Bhd.
Should Bursa Malaysia move its headquarters to The Exchange 106, its building in Bukit Kewangan could be up for sale. One of the sources says the stock exchange operator in the past had put up its current building and adjacent land for sale.
“This was before the Covid-19 period — before 2020. The building and the land are in a prime location in Kuala Lumpur. It remains to be seen if Bursa Malaysia will sell the land if it moves its operation to TRX,” he adds.
According to Bursa Malaysia’s 2023 annual report, the 16-storey building in Bukit Kewangan, which spans more than 17.63 acres, had a net book value of RM91.85 million as at Dec 31, 2023. The 26-year-old building was acquired in 1997. The stock exchange operator also owns a two-storey building next to the main building, known as the annexe building, that spans more than 9.54 acres and had a net book value of RM31.99 million as at Dec 31, 2023.
Completed in 2019, The Exchange 106 has about 2.5 million sq ft of net lettable area (NLA). The huge capacity makes it unlikely for the tower to have an anchor tenant. The tower boasts 92 column-free office floors, each averaging 34,000 sq ft.
Mulia Property says the Exchange 106 will have an occupancy rate of 57% when Ant International commences operation at the end of this year. This means there is another one million sq ft of NLA for rent at the tower.
According to news reports, the other key tenants include Huawei (its regional office), Accenture, Agoda and Principal Asset Management Bhd.
Within TRX, both Affin Bank and HSBC Malaysia have moved their headquarters to their own designated office buildings, Menara Affin and Menara IQ respectively.
The asking rent for the second-tallest building in Malaysia is estimated to be between RM10 and RM14 per sq ft (psf), making it the highest in the country for office space, according to Knight Frank Malaysia’s Real Estate Highlights 2H2023 report. The report says the asking rent for Prime A+ and Grade A office space in KL City ranges from RM5 to RM14 psf per month depending on the location (see table).
Some online property listings have the monthly asking rent for offices at The Exchange 106 at RM12.80 to RM14 psf.
Several large companies are also moving their headquarters to new buildings, including the country’s largest banking group by assets, Malayan Banking Bhd (KL:MAYBANK). It was reported that Maybank will be moving its headquarters to Menara Merdeka 118, an upcoming skyscraper owned by the bank’s largest shareholder, Permodalan Nasional Bhd (PNB).
Maybank entered into a 21-year tenancy agreement with PNB to occupy 33 floors of Menara Merdeka 118 and has been offered the naming and signage rights for the building. All existing offices in Menara Maybank will relocate to the new building on a staggered basis starting in the first quarter of 2025.
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