This article first appeared in City & Country, The Edge Malaysia Weekly on July 29, 2024 - August 4, 2024

Situated along the Federal Highway in Petaling Jaya, Crystal Plaza has been a landmark building since its completion some 29 years ago in 1995. Despite the growing number of new office buildings in Seksyen 51A, it still stands out.

Credit for its enduring significance goes to the owner and facility manager, Axis REIT Managers Bhd (KL:AXREIT). The team has kept it up-to-date and well-maintained since the 6-storey office building was injected into the REIT in 2005, ensuring Crystal Plaza remains a strong contender among the new competition.

“We believe that as a REIT company, it is our responsibility to nurture our properties to ensure they remain profitable and competitive no matter when [they were built]. It is one key reason we established an in-house property management team to manage all 63 properties of Axis REIT so [that] we get to control the quality of the building and to provide the best service we can to the tenants,” says its CEO Leong Kit May.

The commitment to quality has certainly paid off as Crystal Plaza is a Bronze winner of the 10 Years and Above — Non-strata Office category in The Edge Malaysia Best Managed & Sustainable Property Awards 2024.

Situated on 1.7 acres leasehold land at Jalan 51A/223, Crystal Plaza encompasses a total gross floor area of about 303,430 sq ft and a net lettable area of 205,176 sq ft. It provides 250 parking bays for cars and 156 for motorcycles on the ground and basement levels; with more bays available at the open-air car park opposite the premises, as well as at the Park & Ride car park located at the Asia Jaya LRT Station, which is just a two-minute walk from the building. Crystal Plaza is highly visible and easy to access from the Federal Highway.

Crystal Plaza has been a landmark building since its completion some 29 years ago

The office is currently 92.5% occupied. The anchor tenant, RHB Bank Bhd, takes up about 40% of the total space. Other prominent tenants are DHL Asia Pacific Shared Services Sdn Bhd and AsiaWorks Malaysia Sdn Bhd. The overall billing collection rate in 2023 was 99.8%.

“In fact, the occupancy rate and collection rate of Crystal Plaza have always been maintained at a very high level; the same goes for the scoring of our tenant satisfaction survey that we carry out annually. I think that explains why most of our tenants have been here with us for a very long time. Some of them have been with us for more than 20 years,” says head of real estate Jackie Law.

Law attributes the low tenant turnover rate to the strategic location, as well as to the big floor plates and high ceilings of the building, which are not very common in such a mature location.

“Not many would know this but Crystal Plaza was first built as an industrial property. We took the route to convert the premises into an office commercial property but retained some of the industrial property features, such as the very high ceilings and large floor plates, high-tension electrical supply system with large power reserves, as well as two cargo lifts with 2,000kg capacity per unit, which are still in service today.

“It could be why the building was attractive to many tenants who needed both office and warehousing at the same location in the early days, especially those who were doing high-value item businesses, such as handphone and camera … Fujifilm used to be one of our early tenants,” Law explains.

The connectivity of Crystal Plaza was further enhanced when Asia Jaya LRT Station began operations in 1998. Combine that with the standout features, the building became even more attractive, especially to outsourcing and back-end operation businesses.

Staying relevant

When asked the secret to Crystal Plaza’s success, Leong attributes it to the effort of the property management team, which is committed to constantly upgrading and enhancing the property.

“In order to stay competitive in the market, a building must continuously evolve to meet the changing needs of its tenants, especially when we are talking about older buildings like Crystal Plaza. From upgrading the building’s facilities to implementing energy-efficient solutions, we are proud to say the team has been at the forefront of ensuring that Crystal Plaza remains a premier office destination,” Leong notes.

Tenaga Nasional Bhd (KL:TENAGA), a key tenant for over 20 years, moved out of Crystal Plaza to relocate to its own building in 2020, causing the occupancy rate to drop to 46%. Instead of filling up the vacant space immediately, Axis REIT decided to take the opportunity to carry out major refurbishment and enhancement works.

“Tenaga shared the [relocation] plan with us much earlier to make sure we had sufficient time to look for the next tenant because they occupied quite a big space. However, we decided to take the opportunity to do major refurbishment works to minimise the disruption to the existing tenants [as more than half of the building was unoccupied] and to better prepare ourselves to serve the next tenants,” she recalls.

Leong (centre) with (from left) The Edge Malaysia editor-in-chief Kathy Fong, The Edge Malaysia editor emeritus and the awards’ chief judge Au Foong Yee, City & Country senior editor E Jacqui Chan and The Edge Media Group publisher and group CEO Datuk Ho Kay Tat (Photo by Suhaimi Yusuf/The Edge)

From left: Siva, Low, Leong (seated) and Axis Property Services principal Selina Khor (Photo by Patrick Goh/The Edge)

The refurbishment and enhancement works, which took over three years from 2019 and cost RM10 million to complete, included replacing the air-conditioning system and lighting to energy-efficient types; installation of new energy-efficient transformers; the replacement of conventional lighting to LED lighting, fitted with motion sensors; the refurbishment of washrooms, including the infrastructure parts such as incoming and outgoing water piping and plumbing fitting; lift lobby refurbishment; and upgrade of the fire-fighting system to comply with the latest Bomba’s requirements.

“Other than those major upgrading works, we also did some minor works where we found was needed, such as the review and enhancement of the security system, including adding more CCTVs; continuing to upgrade our online tenant portal; and so on,” says Siva Shankar, head of facilities management at Axis Facilities Management Sdn Bhd, the property management arm of Axis REIT.

He elaborates that the team practises asset lifecycle management in all the properties under the company’s management, where the team keeps track of the building assets’ lifecycle and plans replacement or refurbishment.

“For example, [for] the air-conditioning system, the plumbing system or something as simple as the cable wiring, we keep an eye on the performances and keep track of how long before they are due [for change]. We take action to check and change them before they are due because we want to avoid disruption to the operations of the tenants and occupiers, some of whom are running 24 hours a day and have servers set up here in the building,” Siva shares.

The upgraded main lobby (Photo by AXIS)

The pick-up and drop-off point

While the team declines to share the savings on the monthly operation cost of Crystal Plaza after the refurbishment and replacement to energy-efficient fittings, Siva highlights that what is more important is the company’s commitment to environmental, social and governance (ESG).

“A 30-year-old building like Crystal Plaza is certainly not designed to be green or energy-efficient, but that doesn’t mean they can’t contribute to a greener tomorrow. We have set KPIs to reduce the electricity and water consumption of Crystal Plaza to a certain level and we are moving towards that target with the help of all these upgrading works we have done, ongoing and in the pipeline,” he says.

He adds that two ongoing projects are the installation of electric vehicle car charging stations, as well as a cashless carpark system, which are slated for completion by the end of this year.

All the washrooms have been upgraded recently

It is worth noting that the Building Energy Index (BEI) in Crystal Plaza was 99 kWh/m2/year, below the benchmark of 135 kWh/m2/year. BEI is the ratio of total amount of energy consumed by a building in a year over the built area of the building. Currently, Malaysia has a MS 1525:2007 Building Energy Index standard of 135 kWh/m2/year. A lower BEI rating translates into an efficient and energy-saving environment in a building.

Leong says efficient property management is important to Axis REIT from the business perspective, because it affects the occupancy and rental rate of a building, which in turn impact the company’s overall performance. She highlights that it is also paramount to prove that an old building like Crystal Plaza is still relevant in the current tough office market, and continues to create value to the owner, tenants and the city.

“I always love older buildings because they are solid, sturdy and timeless. Efficient and effective property management could make these old buildings continue to shine bright and contribute to the city. The winning of the Best Managed and Sustainable Property award is a testament to what we always believe and a very meaningful recognition of the team’s efforts,” Leong adds.