Contributing Expertise to Malaysia’s Built Environment

Bala Vijayasingam
Having led Faithful+Gould’s Malaysia office for over a year now, I take a look at current market conditions and our recent successes.

Despite the global weakness in oil prices, Malaysia's growth in the first quarter remained strong. However the country’s economy faces many challenges - the recently introduced GST (goods and services value added tax) suppresses local consumption and our currency continues to lose value against the US dollar.

In spite of this, our clients are still investing. The government remains keen for Malaysia to become a gateway to the ASEAN market, offering various incentives (eg. tax breaks) to inward investors. Malaysia’s favourable conditions include a skilled and English-speaking workforce, and a legal system based on British law, as well as a relatively low cost base.

The government remains keen for Malaysia to become a gateway to the ASEAN market, offering various incentives (eg. tax breaks) to inward investors.

Commercial development launches have slowed of late, but the market has a healthy core of businesses seeking to upgrade their work environments by moving to newly completed office space. Potential leaseholders are in a strong position, given the current market’s plentiful supply.

We’re also seeing global firms start to favour Malaysia for their back-of-house services, such as IT support functions, and this too is creating more demand for commercial office space. Faithful+Gould has delivered over 500,000 sq ft of office space in Kuala Lumpur, including our recent support on GlaxoSmithKline’s Business Service Centre, a shared service hub in Kuala Lumpur, and the first project in GSK’s global Business Service Centre programme. This relocation and fit-out programme is a great example of our capability in handling delivery in a challenging live office environment. Achievements included effective scheduling, excellent communication, minimal disruption and good contractor management.

One of our most recent successes is a project for Ericsson, where a very strained timescale called for an innovative procurement solution. The project employed a traditional approach with the design team already on board, and we needed to complete the tendering exercise in just one week. We introduced early contractor involvement following an extensive pre-qualification exercise that was carried out parallel to the design. This enabled us to share information with three pre-qualified contractors. The early contractor involvement allowed us to gather good ideas from quality contractors who in turn, had access to early design information and an opportunity for early supply chain engagement. As a result, the project started on site two weeks after the release of tender documents.

These projects have been delivered in an often challenging local construction culture. Local planning and building regulations are complex and slow, often taking three to six months for permits to be received, resulting in project delays. In a recent appointment, our client chose a design & build route, but the project was challenged by durations for regulatory compliance.

We helped enable the development of a schematic design by a team appointed to exclusively develop the concept and submissions material. The approach also enabled early sign-off by various internal client representatives before going out to tender, helping provide added confidence to time, cost and quality aspects. This less detailed design was submitted to the planning authorities, and further design, contractor procurement and contract finalisation were then carried out during the approvals period. The efficiency of this approach enabled the start of works on site just one week after permits were received - in contrast to typical market practice that sees works commence at risk pre-approval.

We have found that clients appreciate the added value gained via our building lease assessments. We offer proactive guidance – for example, ensuring that leasing agreements are properly drawn up, with all details accurately specified. We suggest ways of making the space suitable, guiding the approvals process if changes to the building are needed, and advising on negotiations with the landlord to avoid disputes and to secure the best deal. We identify anything that needs to be rectified prior to site possession, and we suggest ways of achieving maximum cost effectiveness. Our input also helps achieve the planned site handover dates by arranging timely release of deposit payments, avoiding any delay to site possession and subsequent construction work.

In addition to commercial property, we are working on manufacturing projects (notably for Kellogg's) and on the upcoming Kuala Lumpur City Grand Prix. Our team of six professionals are enjoying contributing expertise to Malaysia’s built environment, and we are valued in this country where it’s often challenging to find the right talent for one’s project.