DEMAND for industrial properties, in particular mega distribution, inner-city distribution and purpose-built centres, is holding strong despite a dim outlook for Malaysia’s economy.
Knight Frank Malaysia is expecting more high-tech manufacturers, especially from China, to make Malaysia their manufacturing hub, taking advantage of the country’s adequate supply of raw materials and relatively low operating costs.
Seeing demand spilling in from countries around the world, real estate private equity and advisory firm Area Management Sdn Bhd is setting up Area Logistics @ Ampang to tap business opportunities from multinational companies and local industry players.
Area Logistics @ Ampang is located on a 7.15ha site and expected to be fully ready by year-end.
Upon completion, it will be Malaysia’s first three-storey ramp-up inner-city mega distribution hub. With 1.5 million sq ft of warehouse space, it will be the largest of its kind in Malaysia.
The warehouse is coming up on the former site of a chip manufacturing company near Texas Instruments Malaysia Sdn Bhd, in the mature electronics manufacturing site at the Ulu Klang Free Trade Zone.
The Certificate of Completion and Compliance for the warehouse is expected to be issued in October, said Datuk Stewart LaBrooy, chairman of Area Management.
LaBrooy said the warehouse is purpose-built to serve the inner-city logistics and e-commerce supply chain networks.
It offers services such as self-storage, last mile delivery, warehousing, e-commerce, parcel sorting and cold-chain logistics.
With the completion of the warehouse, two-hour same-day delivery would become a reality, he said.
“The last mile is often the least efficient link in the supply chain. There is often delay of loading and dispatch from the warehouse, and in deliveries due to congestion in urban areas.
“There is also transportation downtime due to mall delivery restrictions and unsuitable mode of transports. Other issues include expansion of the e-commerce industry resulting in high volume of single-item deliveries and multiple attempts to deliver goods. We found a terrific site to build the warehouse and it will alleviate all these concerns.”
LaBrooy said location of the warehouse and the mode of delivery are key points to meeting demand and supply.
Area Logistics @ Ampang is well connected to highways and major roads, making delivery convenient.
Most of the major shopping malls are also within 13km radius of the site.
“We are excited about this venture. We have received enquiries from a number of industry players who want to take up space at the warehouse for their business expansion. We are confident the warehouse will be fully leased next year,” he said.
Area Logistics @ Ampang is accessible through the Middle Ring Road 2, Duta-Ulu Kelang Expressway and Ampang-Kuala Lumpur Elevated Highway, as well as major roads like Jalan Ampang and Jalan Tun Razak.
Coming up is the new Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) alignment, which is expected to complete in early 2020.
LaBrooy said SUKE alignment would allow for smoother traffic and reduce the amount of commuting time.
Traffic congestion on Jalan Ampang could be reduced by 36 per cent, MRR2 24 per cent and Jalan Cheras 12 per cent, he said.
TARGETING MULTIPLE PLAYERS
Area Logistics @ Ampang, with Grade A specifications, is targeting e-commerce players, logistics firms, third-party logistics companies and retailers which supply to major shopping malls within 13km radius of the site.
These include Suria KLCC, shopping malls on Jalan Bukit Bintang, Tun Razak Exchange, Sunway Velocity, MyTown, Berjaya Times Square, PNB 118, Bukit Bintang City Centre and Sunway Putra Mall.
“They are supplying to major shopping malls and would require a big space to store their items before delivery. These companies are expanding in tandem with e-commerce growth,” said LaBrooy.
He said Area Management is also in negotiations with multinational companies who are keen to take up to 50,000 sq ft of space at the warehouse.
LaBrooy said Kuala Lumpur has the largest retail market in Malaysia and with the rise of e-commerce, many retailers are trying to adopt e-commerce strategies.
“They need to create a 24/7 business model to complement their stores’ performance and drive sales. They also need strategic stock points near their retail outlets. They can use an efficient e-commerce provider to deliver online orders to their customers.”
LaBrooy said the four-storey warehouse including basement has been carved out into 15 zones to cater to individual players.
There are four zones on each floor except for the basement, which has three zones.
The warehouse has large floor plates of about 320,000 sq ft per level and three floor plates with fully-sealed docking bays catering fo 20ft by 40ft container trucks.
There is also high security features with full CCTV surveillance.
In addition, there is a separate car park, of which access will be through turnstiles and biometric/radio frequency identification device passes.
“Safety and security is the top priority at the warehouse. There will be full control of all entering and exiting vehicles, as well as the movement of people,” added LaBrooy.