Their occupants have moved on to the more trendy parts of the city, with premises that are compliant with environmental, social and governance (ESG) requirements.

However, property experts say, rather than leave these buildings to decay, making them an eyesore, there are ways to give them a second lease of life.

Where others see empty floors, real estate consultant Ungku Iskandar Ungku Ismail sees storage space and logistics hubs.

The director of CBRE WTW Valuation and Advisory Sdn Bhd estimated that 30 million sq ft of office space in the Jalan Raja Laut, Jalan Raja Chulan and Lebuh Ampang areas alone that could potentially be converted into such facilities.

Given how entrenched information is for businesses now, the space is also ideal for data storage, according to Rohendran Chelliah, executive director at real estate advisory Zerin Habitat Sdn Bhd.

Whatever the motive, re-purposing these buildings for other uses is inevitable.

On the whole, the push for sustainability and compliance with ESG standards as well as the rising trend of remote or hybrid work modules have combined to turn the commercial property landscape on its head.

The change has been exacerbated by a rising preference for co-working space that not just offers flexibility but also relieves businesses of high fixed office costs.

As Iskandar put it, it is either sink or swim for many purpose-built office buildings.

The need for change

The process of change is already under way.

Government agencies such as the Employees Provident Fund (EPF) and financial institutions such as HSBC Bank, Affin Bank and Maybank are already swapping their now antiquated offices in favour of trendier and ESG-compliant locations.

As more businesses move into new buildings such as Merdeka 118 and Exchange 106, where 4.2 million sq ft of floor space has been made available, old commercial towers such as Bangunan KWSP in Jalan Raja Laut and Menara AmFirst in Petaling Jaya have been relegated to disuse.

This has led to a pressing need now for older office buildings to be re-purposed so they do not lose their value as a result of falling demand, Iskandar told FMT Business.

He suggested that currently unused office space be converted into last-mile storage and logistics hubs, a strategy already used in major cities elsewhere.

“This enables such buildings to secure a new set of tenants and gain access to new markets, thus helping them to preserve their relevance to the economy,” he said.

He pointed out that it could also bring environmental benefits. “Smaller electric vehicles could take over from freight trucks on city streets, thus minimising carbon emissions,” he added.

However, Rohendran said, re-purposing old buildings into storage and logistics hubs may be too heavy an investment, reducing the returns on investment (ROI) significantly.

He suggested that the owners of these assets explore the option of converting these buildings into urban data storage centres given its higher ROI.

“Turning these buildings into storage and logistics hubs require extensive structural adjustments and are therefore not financially sustainable,” he told FMT Business.

Instead, Rohendran said, the owners could opt to make environmentally friendly improvements to these buildings to qualify them for green certification.

“This makes them relevant again while ensuring that the ROI is sustainable over the long term,” he said.

Whichever way one looks at it, re-purposing old buildings for new uses is an investment.