Area Management builds Malaysia’s first inner-city mega distribution hub

KUALA LUMPUR (March 26): Real estate private equity and advisory firm Area Management Sdn Bhd is building Area Logistics here, the country’s first inner-city mega distribution hub with 1.5 million sq ft of warehouse space, said chairman Datuk Stewart LaBrooy.

The warehouse is coming up on the former site of a chip manufacturing company that is a 10 minutes’ drive from KLCC and is purpose-built to serve the inner-city logistics and e-commerce supply chain networks.

The warehouse – which will have Grade A specifications – has large floor plates of about 400,000 sq ft per level and three floor plates with sealed docking bays to accommodate 20ft by 40ft container trucks.

In addition, the warehouse will also have a separate car park and access will be through turnstiles and biometric/radio frequency identification device passes, while there will also be full CCTV surveillance.

Area Management CEO Rajesh Kumar and LaBrooy believe that none of the existing warehouses in Malaysia are currently catering for demand from big players, particularly e-commerce companies, who are part of an emerging trend.

“E-commerce is not just for retailers as we have seen companies like German automakers using the e-commerce platform to deliver their goods to factories, warehouses, service centres and to customers directly.

“This emerging trend is coming to Malaysia and we are built on the idea that the market is going to change and e-commerce will move things forward for us,” said Rajesh.

Therefore, this new development will differentiate Area Management’s investments from other competitors in the field, he said.

“We are filling a vacuum in the demand curve for these assets and not many developers understand what it takes to perform well in this field.

“Our long experience working with global partners who have excelled in this space has given us a decisive edge in the segment,” said LaBrooy.

Moreover, LaBrooy added that most developers are more focused on developing small industrial units that do not fulfil the market’s demand for larger spaces – typically 500,000 sq ft to 1 million sq ft – and there is no ready capital available for the development of new, large logistics warehouses and industrial estates.

For the full story, read the March 28 issue of City & Country, the property pullout of The Edge Malaysia. Subscribe here for your personal copy.