KUALA LUMPUR (Sept 12): Malayan Banking Bhd (Maybank) has announced that it will be moving its headquarters to Menara Merdeka 118, the world's second tallest building owned by the bank’s largest shareholder Permodalan Nasional Bhd (PNB).

Maybank has entered into a 21-year tenancy agreement with PNB, consisting of an initial term of three years and renewal for a further six three-year terms.

The country’s largest bank by asset size will occupy 33 floors in Menara Merdeka 118, and has been offered naming and signage rights over the building, confirming a report by The Edge Malaysia weekly on Aug 15.

Maybank, which is 39.85%-owned by PNB, said the monthly gross rent is RM10.60 per square foot, subject to a variation subsequent to the first two terms or six years, in accordance with the terms of the tenancy agreement.

In regards to the existing Menara Maybank, the group has entered into a 10-year lease agreement with PNB to lease the property to PNB on a triple net basis, meaning all expenses of Menara Maybank, including maintenance, insurance, and all taxes will be borne by PNB.

Maybank is to receive a minimum guaranteed rental which is approximately equivalent to RM12.1 million per annum over the 10-year period. PNB may rent out Menara Maybank to sub-tenants.

“Should Menara Maybank be sold to a buyer secured by PNB within the term of the lease agreement or a period of up to 24 months after the expiry of the term of the lease agreement, at a price agreed by Maybank, the net proceeds will be shared between Maybank and PNB, in line with market practice,” said Maybank in a Bursa Malaysia filing.

“For the avoidance of doubt, Maybank itself may also secure a buyer for Menara Maybank,” it added.

In a statement on Monday (Sept 12), Maybank group president and chief executive officer Datuk Khairussaleh Ramli said the decision took into consideration the cost and benefit of upgrading Menara Maybank to meet, among others, operational and efficiency advantages, and the latest standards of sustainability.

“To do so would incur significant investments, not to mention the maintenance costs and the need to temporarily relocate our offices and employees into various locations within the Klang Valley. In addition, there would be various operational risks and business disruption to our customers,” he said.

Since Maybank is not in the business of property development, he said the bank saw it prudent to pursue the tenancy option while evaluating the best options for its current head office, Menara Maybank, which it owns and will become largely vacant with the move to Menara Merdeka 118.

All existing offices within Menara Maybank will relocate to the new building on a staggered basis starting in the first quarter of 2025. The KL Main Branch in Menara Maybank, however, will remain and there will be no impact to customers who have accounts in this branch.

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

Maybank’s total occupancy of 650,000 sq ft at Menara Merdeka 118 will be less than its current net lettable area of 1.09 million sq ft at Menara Maybank in line with the bank’s strategy to use workspace optimally and smartly while incorporating social distancing measures among other standard operating procedures, given its adoption of new age work practices of remote working, said the bank in the statement.