Twenty-five years after the iconic Petronas Twin Towers became the tallest buildings in the world, Kuala Lumpur continues to add new skyscrapers to its skyline. The latest addition is the 678.9-meter Merdeka 118, which, once fully open to the public later this year, will claim the title of the second-tallest building in the world, behind Dubai’s Burj Khalifa.
The rapid construction of supertall buildings in Kuala Lumpur has fueled both admiration and concern. With a population of just over 2 million, the city has more skyscrapers than all but seven cities globally, yet many offices and homes remain unoccupied. This raises questions about the sustainability of the property boom, with growing doubts over demand and increasing challenges for real estate developers.
A Legacy of Tall Towers
Kuala Lumpurโs fascination with towering buildings can be traced back to the 1980s, when former Prime Minister Mahathir Mohamad initiated grand infrastructure projects as a symbol of national progress. The Petronas Twin Towers, completed in 1996, became a defining moment for the city, briefly overtaking Chicago’s Sears Tower to claim the title of the world’s tallest building.
According to Carmelo Ferlito, CEO of the Center for Market Education, Mahathir used monumental construction projects as a way to portray Malaysiaโs growing economic and political power. “Using big projects to portray power was typical for Mahathir,” Ferlito said. The Merdeka 118, with its spire towering 2,227 feet above ground, is the latest in a long line of symbols meant to reflect Malaysia’s strength on the global stage.
The Symbolism of Merdeka 118
Merdeka 118โs design carries deep nationalist symbolism. The tower is designed to reflect the image of Malaysiaโs first Prime Minister, Tunku Abdul Rahman, during his 1957 speech proclaiming the countryโs independence, or Merdeka, from British colonial rule. The buildingโs triangular glass planes and the 160-meter spire are a tribute to that moment in history.
Government-linked investment firm Permodalan Nasional Bhd (PNB), which spearheaded the project, envisions Merdeka 118 as a global symbol that will elevate Malaysiaโs profile. While the project began under former Prime Minister Najib Razak, some saw it as a move to outshine Mahathirโs legacy.
However, concerns about the necessity of such towering buildings in a city with one in five homes unoccupied and one-third of office spaces vacant are growing. Mustapha Kamal Zulkarnain, an architect focused on resilient cities, emphasized that this construction surge is happening without proper checks on demand. โIf the money rules, this is what happens,โ said Mustapha. โWeโre building as if nobodyโs checking on the demand.โ
A Surplus of High-Rise Buildings
Kuala Lumpurโs urban development has been largely driven by real estate investors who view property as a safe store of wealth. Cha-Ly Koh, founder of UrbanMetry, a property data company, noted that real estate has traditionally been the preferred investment for many, especially ethnic Chinese Malaysians, leading to multiple home purchases despite diminishing returns.
This real estate boom has created a fragmented cityscape, with luxury high-rises, expansive malls, and a sprawling network of highways, while many residential and commercial properties remain vacant. The oversupply of luxury apartments and office spaces has left many owners with properties they cannot sell, leading to underwater mortgages for some.
The commercial sector is similarly impacted. With one-third of office spaces empty, the market is primarily driven by companies relocating between buildings, according to Siva Shanker, CEO of estate agency at Rahim & Co.
Despite this, new skyscrapers continue to emerge, with several buildings tied to government-linked companies and funds that can absorb the economic impact of a prolonged downturn. Ferlito noted that residential property owners also prefer holding onto their assets rather than selling at a loss, which mitigates the possibility of a full market collapse.
Merdeka 118 and Beyond
Merdeka 118 is part of a broader trend in Kuala Lumpurโs property market. PNB has secured tenants for 70% of the towerโs office space, including Malayan Banking Bhd., the country’s largest lender, which is relocating as an anchor tenant. The building will also feature a luxury hotel, an observation deck, and a high-end shopping mall.
Despite these commitments, PNB still needs to secure tenants for the remaining 30% of office space. The firm remains optimistic, stating that the project is designed to enhance liveability and promote economic activity in the surrounding areas. In a statement, PNB emphasized that Merdeka 118 is expected to generate a positive impact on local communities, improving walkability and supporting the local economy.
A Shift in Focus
While Merdeka 118 represents the pinnacle of Kuala Lumpurโs skyline, the countryโs leadership is now calling for a shift in focus. In a recent speech, Prime Minister Anwar Ibrahim expressed concerns over the proliferation of skyscrapers and urged developers to prioritize more affordable housing and projects that directly benefit local businesses.
โThere are already many skyscrapers,โ Anwar said. โIf the private sector wants to build them, please do. But the government does not make this a priority anymore.โ
Looking Ahead
The skyline of Kuala Lumpur will continue to evolve, driven by government-linked companies and private developers keen to leave their mark. However, as demand for luxury real estate and office space dwindles, questions remain about the long-term sustainability of these projects.
While the city may not experience a full-blown real estate crash due to the strength of government-backed projects and wealthy property owners, urban planners and economists are sounding alarms about overdevelopment. As the Merdeka 118 prepares to open its doors, it stands as both a symbol of national pride and a reminder of the challenges facing Kuala Lumpurโs future development.
