This article first appeared in The Edge Malaysia Weekly on February 14, 2022 - February 20, 2022

An advert on the sale of Telekom Malaysia Bhd’s iconic Menara TM is an indication that purpose-built buildings may have served their purpose.

The building is one of the three buildings to be sold by Menara ABS Bhd, a special purpose vehicle sponsored by TM to facilitate the securitisation of four of its properties — Menara TM, Menara Celcom, TM Taman Desa and TM Cyberjaya — via a sale and leaseback or master ijarah arrangement back in 2008.

The assets were securitised against a RM1 billion sukuk programme that will mature in early 2023. At the same time, the master lease for the buildings will also expire.

TM has decided it does not need to own three of the buildings and hence will not be exercising its right to buy them back.

According to RAM Rating Services Bhd, Menara ABS appointed real estate adviser WTW Real Estate Sdn Bhd (CBRE) in early June 2021 to plan and drive the asset leasing process and to dispose of the properties on the open market.

Reports say TM’s decision to not buy back its own headquarters was due to the pandemic, which emptied out offices amid rolling lockdowns.

TM’s Feb 9 statement confirmed this. It said it was in the process of relocating the majority of its corporate offices to TM-owned properties, namely TM Annexe 1 and TM Annexe 2 as well as its properties in Cyberjaya, as part of its “optimisation programme to enable greater efficiency and agility, and to accommodate hybrid working conditions”.

With other iconic commercial developments opening up in the Kuala Lumpur city centre, the office supply will be further disrupted and it could take a while before a new equilibrium is reached.

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