Merdeka 118: Discussion on Surrounding Property Market

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Merdeka 118: Background

Merdeka 118 is a 644-meter mega tall skyscraper currently under construction in Kuala Lumpur, Malaysia. The skyscraper is developed by Permodalan Nasional Berhad (PNB), one of the largest fund management companies in Malaysia, at the cost of RM5B (USD 1.22B). Scheduled for completion in 2022 following delays due to the Covid-19 pandemic, Merdeka 118 is the tallest building currently under construction on the entire planet.

Upon completion, the skyscraper will become the 2nd-tallest building in the world behind Dubai’s Burj Khalifa, the tallest building in South East Asia, surpassing Ho Chi Minh City’s Landmark 81, and the tallest building in Malaysia, surpassing the iconic Petronas Twin Towers.

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Artist impression of a completed Merdeka 118 in day and night

 

Merdeka 118: Composition

As the name suggests, Merdeka 118 features 118 floors, the first building in South East Asia with a floor count exceeding 100 floors. The net leasable area of the skyscraper is 400,000 sq m (4,300,000 sq ft). Out of the 118 floors, 100 floors are rentable space, with 80 floors serving as office space. 60 of such office space floors will be occupied by the building’s developer, PNB, and its subsidiaries.

The podium of Merdeka 118 will be home to the upcoming Warisan Merdeka Mall. Hyatt Group, known for its luxury hotel chains, will occupy the top 17 floors of the remaining upper floors. The hotel chain will introduce their top-tier luxury hotel brand, Park Hyatt, offering 12 floors of hotel and five floors of hotel residences, with 232 units in total.

Other than that, the 113th floor of Merdeka 118 will feature one of the highest restaurants in the world. The 114th to 117th floors will become home to the 5th highest observation deck in the world at 489.58m. The top floor will be turned into a VIP lounge. Merdeka 118 would feature a 36-floor atrium with district cooling systems, dual-use exhaust and cooling tower fans, and a unique HVAC strategy to facilitate temperature and humidity control in the atrium, as well as the entire building.

 

Merdeka 118: Location

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Merdeka 118 is being constructed at Petaling Hill, a low-density hill in southeast Kuala Lumpur. Petaling Hill is rich in history as Tunku Abdul Rahman declared Malaya’s independence in Stadium Merdeka in 1957. Petaling Hill is also home to other historic structures of Malaysia such as Stadium Negara, Stadium Chin Woo, Victoria’s Institution, Methodist Boys School and the stalled Plaza Rakyat development.

 

Merdeka 118: Connectivity

Located between Jalan Maharajalela and Jalan Hang Jebat, Merdeka 118 is within easy access to major roads in Kuala Lumpur such as Jalan Syed Putra, Jalan Hang Tuah, Jalan Pudu, Jalan Tun Tan Cheng Lock, Jalan Loke Yew and Jalan Tun Razak.

Of course, the 21st century is more focused on public transportation over automobiles. Eight different train stations served by seven separate lines can be used to reach Merdeka 118. The stations and lines are as following: –

  • Merdeka MRT Station (dedicated station for Merdeka 118), served by the Kajang Line
  • Hang Tuah LRT Station, served by Ampang and Sri Petaling Lines
  • Hang Tuah Monorail Station, served by the KL Monorail Line
  • Maharajalela Monorail Station, served by the KL Monorail Line
  • Plaza Rakyat LRT Station, served by Ampang and Sri Petaling Lines
  • Pasar Seni MRT Station, served by the Kajang Line
  • Pasar Seni LRT Station, served by the Kelana Jaya Line
  • Kuala Lumpur KTM Station, served by Seremban and Port Klang Lines

 

Merdeka 118: Design & Construction

A building of such immense scale calls for big players, and Merdeka 118 is no different. The design of the building stemmed from the joint effort by RSP Architects Sdn. Bhd and Melbourne-based Fender Katsalidis Architects. The design took inspiration from the raised right hand of Tunku Abdul Rahman when he chanted ‘Merdeka’ seven times on 31st August 1957. This inspiration led to the off-centre 160m spire that will bring the total height of Merdeka 118 to 644m. Songket patterns inspired the multi façade of the building. More than 8km of LED will be fitted onto every corner of the building, illuminating the building throughout the night.

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Tunku Abdul Rahman’s raised hand inspired Merdeka 118’s design

Construction of the skyscraper began in 2014 with piling works undertaken by Pintaras Geotechnic Sdn. Bhd. 137 concrete piles measuring 60m and with a diameter of 2.2m each were embedded into the ground to support the structure and maintain the integrity of surrounding buildings. Upon completing the piling works, above-ground constructions began in 2016, and the contract was awarded to Samsung C&T Corporation-UEM Group collaboration. Samsung C&T Corporation has an illustrious profile with the company involved in the construction of Tower 2 of Petronas Twin Towers, Burj Khalifa in Dubai, Riyadh Metro in Riyadh, Mersey Gateway Bridge in England.

As of February 2021, construction has reached the 116th floor, and exterior façade works are on the 96th floor. New York City-based Turner International LLC plays the role of project management consultant for the entire development.

 

Merdeka 118: The Controversies

Like any mega-project, Merdeka 118 has its fair share of controversies.

Foundation works

A report by Malaysiakini on 13th September this year stated that the foundation and piling work needed to be rectified. Thankfully, this issue has since been rectified, and construction works resumed normally.

 

Price tag

Many have criticised the RM5B budget needed to complete Merdeka 118. Such an enormous amount of funding could be channelled into other means, most notably improving the healthcare and education systems of the country. Then-Prime Minister Dato’ Sri Najib Tun Razak answered the criticisms and claimed that the project would generate more benefits through economic opportunities.

 

The need for such tall buildings

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NST Online, on 8th March 2021, published an article that touched on the subject of the need for a skyscraper of such a large scale. The report referred to the YouTube video ‘Why Shanghai Tower Failed’ by B1M, a YouTube channel focusing on constructions and buildings. The video mentioned that Shanghai Tower, the 2nd tallest building in the world at 632m, is mainly empty and is struggling to attract tenants to fill its 380,000 sq m (4,090,300 sq ft) floor space.

Considering Merdeka 118 has more floor space than Shanghai Tower, the question looms if such a predicament would befall upon Merdeka 118. B1M yet again answers this question by providing that Merdeka 118’s developer will occupy 60% of the available floor space in the building, with the remaining space occupied by a hotel and a shopping mall. While Shanghai Tower is predominantly an office skyscraper, Merdeka 118 is a mixed-use skyscraper.

 

The 2nd tallest building in the world?

As mentioned above, Merdeka 118 will become the 2nd tallest building on the planet upon its completion, but B1M and other articles have pointed out that this feat is only possible thanks to the 160m tall spire. The actual roof height of the building is 516m, which would make Merdeka 118 the 8th tallest building in the world.

The spire adds another 128m in the total height (32m of the spire will be anchored into the building itself). Shanghai Tower and the City of Shanghai boldly claimed that the Shanghai Tower is the tallest building in the world because other buildings use spires to increase their total height and that Shanghai Tower has a much higher roof than any other building on the planet.

The usage of spires has been subjected to controversies ever since the completion of Petronas Twin Towers. The actual architectural height of Petronas Twin Tower is only 378.6, and the spires add 73.4m onto the total height, taking away the tallest building title from Chicago’s Sears Towers (now Willis Tower), standing at 442m.

The Council on Tall Buildings and Urban Habitat (CTBUH) later decided that any component that forms part of the building during construction can be considered when measuring the building’s total height. CTBUH also clarified any additions made to a building post-construction, such as an antenna, will not be included in the building’s full height, thwarting Willis Tower and the former 1WTC in New York City efforts in using its antennas to increase its overall height.

 

Merdeka 118: Impact on Surrounding Properties

Any iconic building will indeed have a substantial impact on its surrounding properties, particularly residential properties.

View as a sales gimmick

The proximity to any such prestigious name will be used as a sales gimmick, particularly the views that a surrounding property will afford. A prime example of this can be seen in properties within the vicinity of Petronas Twin Towers. The most obvious of such property is the Four Seasons Private Residence, right next to Petronas Twin Towers. The property uses Petronas Twin Tower as leverage and promotes itself as ‘the city’s exclusive new address.’

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Four Seasons Private Residences

Other similar developments such as SO/Sofitel Residences at the upcoming Oxley Towers KLCC, Fairmont KL and Tropicana The Residence also use their location as a sales gimmick. Some properties use photographs of their building and Petronas Twin Towers in the same frame or quotes that place importance on their location.

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Oxley Towers KLCC uses quotes to attract buyers

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Tropicana The Residence and Petronas Twin Towers in the same frame

The similarity can be expected to residential properties around Merdeka 118. Two nearby residential properties use their proximity to Merdeka 118 as a sales gimmick, Sunway Belfield and Opus KL. Sunway Belfield, on its website, mentions that its residents ‘will be able to take in the spectacular views of the upcoming tallest building in Kuala Lumpur.’

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Sunway Belfield

The case is also the same with Opus KL, with the development stating that it is ‘well situated next to the 2nd tallest building in the world.’

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Opus KL

While it is ideal for developers for their property to be located next to a skyscraper, views offered by a residential development is the least of homebuyers’ concern, who could have afforded the exact property for a lower price had it been developed in another area. While the properties mentioned above near Petronas Twin Towers are luxurious, high-end residences that cater to the super-rich, Sunway Belfield and Opus KL cater to the general public based on their floor plans. Developers using views as a sales gimmick to increase the asking price of their developments might restrict the anticipated number of audiences, who might shy away and consider some other property because of the higher price point. 

 

Increase in price point

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Speaking of the price point, it is a surety that property prices will see growth when a skyscraper is built nearby. Take Four Seasons Private Residences as an example. While the initial launch price was not revealed to the public, sub-sale prices can be considered exorbitant. A 1-bedroom apartment at Four Seasons Private Residences averages RM3,000,000, and the duplex penthouse measuring 12,000 sq ft in a built-up area is for sale at a mind-boggling RM44,000,000.

Similarly, the prices of Sunway Belfield and Opus KL can be said to reflect the increase in price point to a certain extent. Opus KL had a starting price of RM1.24M when launched in 2017, back when Merdeka 118 was in its early stages of construction. One could wonder how much the launch price of similar property would cost today or in the future. Sunway Belfield has a more modest starting price of RM652,000 but climbs higher than RM1.8M.

 

Wealth parking

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Any residential project would be targeted by the high-income group of the country, purchasing residential properties as an investment or to park their wealth. Recently, there has been a significant increase in the number of foreign nationals opting to purchase properties in another country for the above-mentioned purposes. 

An analogy can be taken from Forest City development in Johor. Since the beginning of the project, critics have labelled Forest City as a method for Chinese nationals to park their wealth in Malaysia, since Forest City was targeted towards Chinese nationals. The same fate would fall upon residential properties, especially those with an exorbitant price tag. Any residential development within the vicinity of a supertall skyscraper would drive up the prices out of control. This would result in higher number of foreigners purchasing these residential properties for investment or safeguarding their wealth abroad.

 

Other impacts

While the price point and ‘view’ sales gimmick are the most apparent impacts from a financial and real estate perspective, there are other impacts brought about by a skyscraper. Other effects, as per the Food and Agricultural Organization of the United Nations, include: –

  • Heat reflection
  • Heat concentration
  • Vast shadow over surrounding buildings
  • Restriction to natural lighting
  • Restriction to fresh air
  • Change in wind flow
  • Traffic congestion
  • Light pollution

 

Merdeka 118: The Last of Its Kind?

While tall buildings will continue to be built worldwide, YouTube channel B1M, in its recent video, made note that Merdeka 118 could possibly be the last megatall skyscraper ever built. A ‘megatall’ skyscraper is any building that exceeds 600m (1,969 ft) in height. As of April 2021, only three megatall skyscrapers have ever been built, Dubai’s Burj Khalifa (828m), Shanghai’s Shanghai Tower (632m) and Mecca’s Abraj Al-Bait Clock Tower (601m). Upon completion, Merdeka 118 will join this elite club of megatall buildings. B1M also noted that it might take years for a 5th member to join this elusive club for various reasons.

 

Uncertainty of Jeddah Tower

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Jeddah Tower in Jeddah, Saudi Arabia, was to be the first building to exceed 1,000m in height. Construction started in 2013, but due to the 2017-2019 Saudi Arabian purge and labour issues, construction has been halted and has not resumed. It is presumed that works will never continue, scaled down to a comprehensible height, or abandoned altogether. As of 2017, the unfinished skyscraper stands at 252m.

 

China’s ban on skyscrapers

China’s boom in its economy saw unprecedented growth in the number of skyscrapers in its territory. B1M highlighted that China had built more skyscrapers in the last 30 years than The United States of America did in the entirety of the 20th century. In April 2020, China’s Ministry of Housing and Rural Development issued a notice that effectively banned any new construction of buildings exceeding 500m.

 

Unpredictable events

A skyscraper takes years to plan, design and construct. Merdeka 118 itself took four years of planning and designing and a further six years to build. While it is common for buildings of such immense scale to take up to a decade to complete, unpredictable events could occur within that period.

Most skyscrapers usually are envisioned when a country’s economy is prospering and building a tall building is financially viable. The biggest challenge faced by skyscrapers is financial recessions, which would often lead to skyscrapers being scaled down to a manageable size or being cancelled altogether, such as the 610m Chicago Spire. Following the Covid-19 pandemic, the world went into a mini economic slump. Hence it is clear that an economic clump could stem from non-financially related reasoning, which could determine the fate of any tall building.

 

Summary

While Merdeka 118 will mark its presence globally, its impact on surrounding infrastructure would only materialise once the building completes and opens to the public. During this unprecedented time amidst the pandemic, what effects a megatall skyscraper brings about can be unfathomable. 

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