AFTER years dominated by cranes, concrete and capital expenditure, the developer behind the world’s second tallest building is entering what may be the most critical phase of the Merdeka 118 project yet – commercialisation.
With the major components nearing completion, PNB Merdeka Ventures Sdn Bhd (PNBMV) is now shifting its focus towards transforming the RM10bil precinct into a self-sustaining urban destination driven by office workers, tourists, retail traffic and large-scale public events.
At the helm of this next chapter is Datuk Izwan Hasli Mohd Ibrahim, who was appointed chief executive officer of PNBMV effective Jan 1, 2026.
He succeeded Datuk Tengku Ab Aziz Tengku Mahmud, who stepped down after 15 years leading the development of the Merdeka 118 project and now remains as adviser to the company.
Izwan is no stranger to large-scale urban developments.
Prior to joining PNBMV, he led Putrajaya Holdings Sdn Bhd, the master developer of Putrajaya, overseeing the 12,000-acre administrative capital development.
Before that, he even spent over four years as executive director of KLCC Urusharta Sdn Bhd, the master developer behind the 100-acre Kuala Lumpur City Centre (KLCC) precinct and the Petronas Twin Towers.
Transition to commercialisation
For Izwan, the challenge today is no longer about constructing Malaysia’s tallest skyscraper, but bringing the entire Merdeka 118 precinct to life.
“This year is really about commercialisation,” he tells StarBiz 7.
The 40-acre Merdeka 118 precinct, which includes Stadium Merdeka and Stadium Negara, has an estimated overall development cost of about RM10bil to RM11bil.
The first phase of development, comprising the tower, retail mall and infrastructure, carries an estimated development cost of around RM8bil and has been completed, while the upcoming residential project is expected to add a further RM3bil in development cost.
According to Izwan, the precinct has largely passed its peak capital expenditure phase, with most major components already completed or targeted for opening this year.
Merdeka 118 office tower is already occupied, while Stadium Merdeka, Merdeka Boulevard, Masjid Al-Sultan Abdullah and Park Hyatt Kuala Lumpur are operational.
Meanwhile, the 118 Mall, Merdeka Textile Museum, as well as the Look at 118 and The View at 118 observation decks, are scheduled to open in August this year.
“August is a big month for us,” Izwan says.
Building the precinct’s engine
He believes the precinct’s long-term success will be driven by what he describes as three “magic ingredients” – office workers, large-scale public events and tourism traffic.
The office tower alone is expected to house between 10,000 and 11,000 workers at peak occupancy, providing a strong weekday population flow into the precinct.
“That transient crowd will help weekday footfall,” he says.
About 70% of Merdeka 118’s 1.64 million sq ft office space has been committed, with Malayan Banking Bhd
(Maybank) accounting for around 40% (33 floors) and PNB-related companies about 20%.
Other tenants including Bank of America and Copenhagen Infrastructure Partners make up the balance 10%.
Izwan expects occupancy to rise closer to 90% over the next five years as more international tenants come on board.
On weekends, he expects concerts and major public events at the stadium precinct to drive another layer of traffic.
“Imagine 30,000 people watching a concert,” he adds.
The third driver, which Izwan describes as unique to the development, is The View at 118 observation deck.
PNBMV expects the attraction to receive between one million and 1.5 million visitors annually, with visitors entering through the mall at ground level before exiting through the mall’s upper floors.
“When they come down, they don’t come down at the same place. They will punch through Level 3 of our mall, which is called the Malaysian Artisan District,” he says, adding that this level will showcase Malaysian arts and culture.
He adds that Level 4 will house exhibition spaces capable of accommodating car launches and other events.
The retail component is also seeing healthy pre-opening momentum, with about 78% of the 118 Mall already leased, according to Izwan.
Profitability and financing
Izwan expresses confidence that the various components of the precinct would eventually turn profitable, albeit at different gestation periods.
“We are on the path to profitability,” he says.
“When you measure a development like Merdeka 118, it’s not just about the money. The money is a given. We must make profit and we will make profit.”
The final phase of the precinct, the planned Merdeka Residences project, will comprise two residential towers and a hotel or
serviced residence component
Izwan also says Stadium Negara will be rejuvenated towards the end of this year.
From a financing perspective, Izwan says the group has already optimised its capital structure as the Merdeka 118 development transitions from construction to operations.
In November 2025, PNBMV completed its RM6bil Sustainability Merdeka Sukuk Wakalah, which refinanced earlier construction-phase borrowings and partly funded the Merdeka 118 mixed-use development.
The sukuk was priced at profit rates between 3.64% and 4.11%, with an average of 3.83%, lower than its earlier 2017 unrated sukuk.
Izwan says the refinancing reflects the project’s improved risk profile as it moves from construction into operations.
With office space now occupied and assets such as Park Hyatt Hotel Kuala Lumpur performing well, he says the precinct is beginning to generate meaningful cash flow.
He adds that these cash flows will support further investment within the precinct, and that no additional funding is expected.
MARC Ratings has assigned a final AAAIS rating with a “stable” outlook to PNBMV’s RM6bil sukuk.
The rating agency notes that the development has so far incurred about RM7bil in construction costs, largely funded through two earlier unrated sukuk programmes with a combined outstanding amount of RM5.39bil.
Looking ahead, MARC expects the completed precinct to generate recurring income streams of about RM400mil annually over the medium term.
It estimates the office tower alone will contribute around RM160mil in net property income each year, supported by long-term leasing arrangements.
MARC adds that the retail mall, with about 750,300 sq ft net lettable area, is seeing average rentals of around RM10.70 per sq ft.
Izwan says the development is now approaching an inflection point as more components become operational and recurring income begins to strengthen.
“If we have the same conversation in a year or two from now, I’ll probably be smiling a lot wider,” he says.
Classified as a “megatall” skyscraper, a category reserved for buildings above 600 meters, Merdeka 118 is currently the world’s second tallest building.
“Humanity has only built four megatall buildings,” Izwan reminds.
But beyond its engineering
features, Izwan says the project’s identity remains deeply rooted in Malaysia’s heritage.
“You reach for the sky, but you keep rooted to the earth. That’s really our philosophy here,” he says.
“We built every component of Merdeka 118 anchored on our heritage, with Stadium Merdeka and Stadium Negara remaining at the heart of the precinct. That’s really the essence of Merdeka 118.”
