KUALA LUMPUR, Sept 12 — Malayan Banking Bhd (Maybank) has inked a 21-year tenancy agreement with Permodalan Nasional Bhd (PNB) to move its corporate head office from Menara Maybank to the iconic Menara Merdeka 118 — a move which is expected to be carried out in the first quarter of 2025.

Group president and chief executive officer Datuk Khairussaleh Ramli said the decision to move came after thorough, extensive and rigorous deliberations at the highest levels in Maybank since 2019.

"We had weighed many key considerations, including workspace requirements that support the new normal and fulfil the bank’s sustainability ambitions.

"As we progressively embrace hybrid work arrangements and virtual office setups, we consciously want to occupy optimal workspaces in buildings that are supported by modern technology infrastructure and are environmentally progressive, in line with new global standards of sustainability in buildings,” he told reporters after the signing ceremony here today.

The agreement was signed by Khairussaleh and PNB’s president and group CEO Ahmad Zulqarnain Onn. Maybank chairman Tan Sri Zamzamzairani Mohd Isa and PNB group chairman Tun Arifin Zakaria were also present at the event.

Khairussaleh said Maybank will occupy 33 floors to house some 5,900 employees. It will occupy 650,000 square feet (sq ft), which will be less than its current net lettable area of 1.09 million sq ft at Menara Bank.

Also relocating to Menara 118 are selected Maybank subsidiaries currently based in Dataran Maybank including Maybank Islamic, Maybank Investment Bank and Maybank Asset Management.

He also said that Maybank was offered the naming and signage rights over the building being the anchor tenant, enhancing its brand visibility on one of the tallest buildings in the world.

Maybank will pay an initial monthly gross rent of RM10.60 per square foot (psf) for the first six years, with subsequent adjustments for inflationary costs. The translates to an effective rental rate of RM8.92 psf, which is lower than the gross rent and within the fair market rates of RM8.48 psf and RM8.93 psf as assessed by independent valuers. The net effective rental rate is commonly used as a measure of expected income from a tenant.

Meanwhile, Khairussaleh said as for Menara Maybank which it owns which will be largely vacant with the move, both parties have also entered into a lease agreement for a period of 10 years on a triple net basis, concurrently with the tenancy agreement for Menara Merdeka 118.

"The lease agreement for Menara Maybank will commence in the last quarter of 2025. Under the triple net basis, PNB will be the master lessor, and bear all expenses related to the building including maintenance, insurance and taxes.

"This arrangement would allow Maybank to realise rental income while deferring the disposal of the building to a later date when the real estate market recovers further, allowing the bank to maximise the value of the building,” he said.

Commenting on the agreement, Ahmad Zulqarnain said Menara Merdeka 118 will be completed by end of this year and it will be the first building in Malaysia targeted to achieve triple green platinum certification in Leadership in Energy and Environmental Design (LEED), Green Building Index (GBI) and Green Real Estate (GreenRE).

"The leasing of Menara Maybank is win-win solution for both parties. Maybank is able to transition from an owner-occupied property and relocate to Merdeka118 while PNB will be asset-managing Menara Maybank as part of its domestic core property portfolio, currently totalling 40 assets in Malaysia and 13 assets internationally,” he added. — Bernama