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Menara TM: The real story behind the sale of a landmark building


KUALA LUMPUR Feb 11 – It’s not every day that a landmark Kuala Lumpur property is up for sale and understandably, Menara TM has become the talk of the town. 


But what seems to be a simple exercise is anything but, as an uneasy relationship has pushed Malaysia’s biggest pension fund, the Employees Provident Fund or EPF to force the sale of an iconic building and what’s more, the tenant doesn’t mind ditching its own headquarters.


This is the story of how cosy relationships between government entities has taken a turn for the worse amid unprecedented times as the global pandemic piled on the misery for the property sector already hit hard by an oversupply situation.


The story started about 13 years ago in 2008 when Internet speeds were much slower, Facebook was only 5 years old and Instagram wasn’t even around. 


Just a year earlier, the Government identified TM to build Malaysia’s High-Speed Broadband (HSBB) Infrastructure at a cost of RM15 billion and TM has to finance RM10 billion of the total over 10 years.


The HSBB gave birth to what we know today as Unifi, the flagship product of TM.


TM had to be creative to find money for such a massive national project and it did just that. 


In 2008, TM announced what was then the largest property securitisation deal in Malaysia.


Put simply, it was raising RM1 billion for investments and working capital by issuing sukuk or Islamic bonds. 


Media reports said that institutional investors like the EPF, KWAP and TH were asked to support the sukuk sale.


Under the deal, the iconic Menara TM and three other buildings were used as a “security” for the debt that was raised.


Fast forward 13 years later, who would have known that COVID-19 would rear its ugly head.






Covid made matters worse to a property industry that is already grappling with an oversupply situation. 


TM is the main anchor tenant of Menara TM, occupying 70 percent of the 92,000 sq feet of space spanning 55 floors.


It would be able to save on rental costs if it moved out of its own landmark building. 


It swiftly confirmed this in its statement this week; it is moving employees to other TM-owned buildings as part of an optimisation programme.


Naturally, the institutional investors are miffed as TM has decided not to re-acquire Menara TM, which is an option under the securitisation deal.


This leaves EPF, KWAP and TH in a pickle as they need to recover their investment.


The corporate sector was abuzz on Wednesday when an English daily  newspaper ran an ad putting Menara TM for sale.






It is understood that the EPF, which had over 50% or majority voting rights among the sukukholders, pushed for the sale of Menara TM. 


However, TH was still trying to convince TM to remain as the anchor tenant and negotiations are still ongoing.


"It is unfortunate that the spirit of the deal is not followed. It leaves a bitter taste,” a source told DagangNews on condition of anonymity.


 The investors rallied to TM’s call in its time of need, but the favour was not returned.


And now, after two years of lockdown and the new normal of Work-From-Home, Menara TM faces the unenviable task of finding new tenants.


The priority for the EPF, KWAP and TH, which have forked out RM1 billion, is to recoup their investment as it is dutybound to do so to protect its members and depositors.


It is understood that there are already 5 bidders for the landmark with a price tag of RM700 million.


As for Menara TM, it would also be forever immortalised by Netizens as the building which is also known as the home of Ironman as depicted by Robert Downey Jr in the movie Marvel's The Avengers. -