MALAYSIA’S property sector is quite mundane these days due to COVID-19. However, Kuala Lumpur’s real estate industry was shocked to the core a fortnight ago when The Star ran an ad with the headlines “Menara TM up for sale”.
Naturally, the news became viral with numerous questions popping up. For example, is the national telecommunication giant Telekom Malaysia Bhd (TM) in financial trouble so much so that it has to give up its headquarters?
Perhaps, what is even more shocking is the fact that Menara TM was not even owned by Telekom Malaysia in the first place.
Instead, the bamboo shoot-shaped 55-storey skyscraper located in Jalan Pantai Baharu, Kuala Lumpur is owned by a proxy acting for three government-linked companies which are the Employees Provident Fund (EPF), Kumpulan Wang Amanah Pencen (KWAP) and Lembaga Tabung Haji.
This revelation naturally mystified and stumped many. However, as the dust eventually settled, the iconic tower – dubbed as the home of the “Ironman” in social media – now begs another question: What’s next for Menara TM?
For starters, the New Straits Times had on Feb 10 reported that the entire Menara TM development in is up for sale at a price tag of about RM700 mil which is indeed a gargantuan sum.
This immediately suggests that it’s never going to be child’s play to transact a property at that value amid the current state of pandemic-stricken economy. Instead, common sense dictates that property prices are soft right now while buyers with deep pockets are hard to come by.
“The fact that Menara TM has found bidders demonstrate the rosy long term valuation of Menara TM,” a property manager told FocusM.
Meanwhile, a property analyst ruled out the likelihood of the Menara TM’s sale ruining Telekom Malaysia’s long-term image whatsoever.
“TM is the owner of our country’s broadband satellite and cable. That is their core business and the sale will not change anything … its business will go on as usual without any disruption.”
As the Government has since opened up the telecommunications industry, the analyst contended that Telekom Malaysia is now forced to share its potential revenue streams with other telcos, notably DiGi.Com Bhd, Maxis Bhd and Axiata Group Bhd, to name a few industry big names.
“The bottom line is that TM needs to be cost competitive otherwise they can no longer afford to pay high rental to EPF under their sale & leaseback agreement.”
Time consuming process?
A fund manager at Permodalan Nasional Bhd said Telekom Malaysia will be scouting for cheap properties now – either through owning or renting them – to house their business operations.
On the sale of Menara TM, it will take some time before the EPF and the others can actually find a buyer, according to the fund manager.
A property agent further noted that interested buyers must first submit an expression of interest by March prior to submitting a tender.
“But for now, we don’t even know when is the tender date,” he pointed out. “Nevertheless, there are bound to be interested parties given that Menara TM is located at a prime location in the heart of Kuala Lumpur,” he projected.
“The real issue now is how much the selling price will be or whether the price is too cheap or expensive? If it’s cheap, then EPF, KWAP and TH will make losses. Secondly, who is the buyer? Could it be foreigner or local?”
The property agent nevertheless reiterated that it is never a good time to sell property during a pandemic as fetching a high price can be an issue. Likewise, even if the property is rented out, finding tenants or securing handsome rental can be tough.
However, another fund manager said how quick the sale transaction can be competed will not be an issue for Telekom Malaysia given it owns many parcels of land.
“As such, it will not be a problem for TM to set up a new headquarters as it can just build a new one at the location it deems fittest.”
Meanwhile, a Telekom Malaysia source said although the telco owns tracts of land in Cyberjaya, not all of its operations will be moved there.
“For example, TM also owns the TM Annexe which connects Menara TM with the Pullman Hotel in Bangsar. TM owns the annexe and so some staff will move there,” added the TM source.
Given that there are so many unanswered questions pertaining to Menara TM’s future at this moment in time, the guessing game will surely rage on indefinitely until an official announcement is out. – Feb 18, 2022
