Revamp old warehouses, shophouses for e-commerce, says Area Management

KUALA LUMPUR (March 25): Old warehouses and shophouses in highly populated areas but with limited distribution network have the potential to be turned into distribution and customers service centres, said Area Management Sdn Bhd CEO Rajesh Kumar Tharmalingam (pictured).

This is to tap the growing e-commerce industry, he said. Citing market research firm eMarketer, he said global e-commerce sales are expected to eclipse US$3.5 trillion (RM15.48 trillion) in the next five years. The Asia-Pacific market alone registered a 25% year-on-year increase in 2015.

Rajesh was speaking on "Industrial properties: A hidden gem for investors?" at The Edge Investment Forum on Real Estate 2017 today. The forum was organised by City & Country of The Edge Malaysia and presented by Sunway Property. It was supported by TheEdgeProperty.com.

Rajesh said smart phones and tablets will replace computers in the future, so everything will go online — and this bodes well for the outlook for e-commerce.

"Malaysia is the distribution hub of e-commerce in the region because we have the best infrastructure, such as good highways connectivity, three ports and the only airport with three runways in Southeast Asia, which is KLIA," he added.

With Malaysia’s advantages and with the advancement of technology, Rajesh believed there will be a big demand for new industrial properties including data centres, call centres and parcel distribution hubs.

"From an investor's perspective, we like industrial property and we think it is a highly under-invested sector," he shared.

Hence, he advised investors to focus on areas with high population and limited distribution networks and turn old shophouses and warehouses in the areas to become new data centres, call centres and parcel distribution hubs.

"Good examples would be Cheras and Puchong, those are the areas with potential for investors to revamp old warehouses," he noted, adding that Penang also has good potential for e-commerce distribution hubs, especially on the island.

"You will see demand for the industrial properties in the range of 25,000 sq ft to 100,000 sq ft," he added.