By Stephanie Jacob
Over the years, Tiger has had to come to terms with the ever decreasing size of its territory with trees chopped down to make way for a very different jungle of steel and glass. Certain areas such as the wonderful Kuala Lumpur had been surrendered long ago to the construction of a modern, shiny metropolis. These jungles are eminently suitable for the many corporations, local and international which were supposed to fill its halls.
But over the past few months Tiger has been hearing worrying rumours about an oversupply of office space in KL. Could it be that Tiger and his jungle companions have given the development hungry humans too a free hand to build and build?
Kuala Lumpur, fully or almost fully occupied, worryingly low occupancy rates.
Looking around Kuala Lumpur, Tiger cannot help but feel the answer to that question might be yes. After sniffing around, Tiger found that while some buildings such as the iconic Petronas Twin Towers were fully or almost fully occupied, others had worryingly low occupancy rates.
Real estate and property insiders say yes, too. These experts, while stopping short of calling it a glut, have gone with the slightly amusing term ‘overhang’. Not an expert herself, Tiger will have to accept that it is the best way to describe the situation.
A little more digging shows that the problem buildings appear to be the older ones, which were losing their tenants to the flashier, newer ones that kept sprouting up. The reasoning on the part of the tenants was simple, the newer buildings are modern and more suitable for the running of business… they are a sight more appealing too.
Some might say that this is fair enough, but Tiger asks what happens to all the empty buildings and points out the city is already pretty darn congested. It seems that nowadays every little piece of empty space or plot of land is seized upon, making a nice green area to laze or play about as rare as Tiger!
What’s worrying is that there is no end in sight. Earlier this month the controversy over yet another mega development project was re-ignited. The Warisan Merdeka development which is located in the vicinity of the historic Merdeka Park is back on the cards after City Hall (DBKL) said the developers, government-linked firm Permodalan Nasional Bhd (PNB) had met the necessary criteria.
Of course ‘criteria’ solely means that PNB has shown that it is abiding with all the by laws of the land. PNB has no obligation to show that they will be able to fill the building up, or how the development will enhance the area, which by the way is gazetted as People’s Reserved Land given its proximity to many heritage and historical sites.
While many NGOs and heritage groups are condemning the project as unnecessary, several other bigwigs, like the Prime Minister and KL Mayor have begged to differ saying that Warisan Merdeka will help create a business hub.
However the seemingly blatant disregard for the significance of this area (curious since DBKL is usually so concerned about protecting historical sites… or maybe its just the squares they worry about) is another matter on its own, and Tiger will have to growl about that some other time.
For now, Tiger is concerned about the building spree going on, because Warisan Merdeka is not a unique project. There is Naza’s KL Metropolis project with its 100 story tower, Naza’s mixed development in Kampung Baru with 40 floors of office space, and SP Setia’s KL Eco City mixed development.
1MDB Tun Razak Exchange
Don’t forget the massive 1MDB Tun Razak Exchange as well, to be built in the Jalan Tun Razak and Jalan Sultan Ismail area. A development which is of course necessary as it will create a financial district.
(If anyone has been keeping count as Tiger has, that’s two financial districts in KL alone. How many other countries have two financial districts just in its federal capital, Tiger wonders)
While nobody is calling it a glut just yet, if DBKL continues to let developers build in every nook and cranny, we will get there pretty soon and there is going to be an oversupply in the market.
So Tiger wants to suggest an alternative to always building from scratch, what about starting a process of redevelopment or regeneration?
Instead of always starting greenfield projects, companies and developers should be encouraged to take on the redevelopment of existing brownfield projects which need a facelift and can be modernised. That way old buildings are not left derelict and the land it is on is put to good use.
For instance instead of spending billions on creating the Warisan Merdeka project, could PNB perhaps use the money to take over an existing older buildings or developments and work on that instead?
To mitigate the higher cost that might be incurred due to having to tear down the existing structure on site, perhaps DBKL could offer the company incentives with regards to taxes and longer lease lengths.
Talking about local authorities, Tiger says that its time for them to be a little more territorial with the city’s land. Instead of just allowing development after development, they should work to establish a system where developers have to show that their developments will in fact have a good take-up rate and a multiplier effect on the surrounding neighbourhood.
If feeling particularly bold and up for a challenge, they might want to consider working to pair owners of old or unused buildings with developers looking for opportunities in the city. They should allow the owners (who ultimately lose out to newer developments) a chance to either cash in or work with these developers to refurbish and recreate their buildings to meet the needs of a modern corporation or business.
One final thing, Tiger really does not think that any city needs more than one financial district or hub or whatever. One focal area is more than sufficient. What is important is ensuring that this is complemented by an extensive integrated transportation system and a high speed telecommunications system which connects it with the rest of the city and the country.
That way when Tiger does ramble into town, there will still be some greenery to relax and rest in after taking in the sights…somewhere around the old Merdeka Park area perhaps?
GRRRRR!
You must be logged in to post a comment.