KUALA LUMPUR (Feb 17): The COMPASS @ Kota Seri Langat ([email protected]) held a ground-breaking ceremony on Friday (Feb 17) to signify the start of construction of SME Precinct, in a bid towards making the green industrial park a reality.
[email protected] is an industrial development joint venture between Permodalan Nasional Bhd (PNB) (through its indirect wholly owned subsidiary MIDF Property Bhd), KWEST Sdn Bhd (a wholly owned subsidiary of Kumpulan Wang Persaraan (Diperbadankan) (KWAP)) and the AREA Group of Companies (AREA) (through its subsidiary AREA Industrial Development Holdings Sdn Bhd).
Selangor state executive councilor for industry and trade Datuk Teng Chang Khim officiated the ceremony and lent his support to the development on behalf of the Selangor state government.
The 220-acre freehold, green-certified project has a gross development value of RM1.2 billion.
The fully integrated park is being built for manufacturing and logistics operators, and small and medium enterprises (SMEs).
The park is offering two concepts: the COMPASS Industrial & Logistics Park — a green certified, managed 120-acre industrial park that caters for built-to-suit or customised warehouses and manufacturing lots with sizes ranging from 130,000 sq ft to 500,000 sq ft, and COMPASS SME Precinct — a 59-acre park, with ready-built factories and warehouses featuring a variety of sizes ranging from 3,600 sq ft to 50,000 sq ft.
COMPASS IP Sdn Bhd director Datuk Stewart LaBrooy said in a statement: “We are pleased to announce that construction works on the COMPASS SME Precinct will commence first and should be completed by end-2024. We are also in a preliminary discussion with the master developer of Kota Sri Langat, Seriemas Development Sdn Bhd (PNB Group’s property arm) for potential expansion of the park. Its excellent location and connectivity makes Kota Sri Langat a great candidate to become ‘Shah Alam 2’.”
He added that they were glad that the team conducted market studies prior to finalising the design of the park as it guided them to position COMPASS as an environmental, social and governance (ESG) leader. ESG issues have now taken centre stage globally and are dominating the corporate, social, and political agenda in Malaysia over the past 18 months.
LaBrooy remarked: “As developers, we realised that there is an increasing investor and shareholder awareness alike on the effects of climate change. ESG investing themes dominate the allocation of capital by investors and this is changing the selection criteria by which locations are selected for investments by major MNCs (multinational corporations) for their new manufacturing projects.”
He said that in addition, banks are getting reluctant to lend to non-ESG-compliant companies and projects, or are imposing unfavourable interest rates upon such entities, forcing them to comply with the new ESG regimes. LaBrooy also urged other developers aspiring to develop industrial parks to follow suit and to embrace ESG as the major component of their planning stages.
These sentiments were echoed in the latest issue of New York-based Global Finance Magazine where Kuala Lumpur-based analysts commented that the past 12 months showed significant inward investment activity in three main sectors: renewable energy, manufacturing and technology, as the new government has set attraction of foreign direct investment (FDI) as one of its main goals, besides providing abundant tax and other initiatives.
The report stated that investments from companies in Canada, China and Japan have been increasing. And that the FDI from China alone amounted to more than US$180 billion in 2022. Renewables are big, as the country’s “Go Green” initiative has seen increased investment in solar power generation, it added.
The management at COMPASS is also working closely with Invest Selangor and the state government to ensure that [email protected] complies with the latest managed industrial park guidelines drawn up by the Selangor state government.
Selangor state’s Teng commented: “The Selangor state government hopes to position Selangor as the e-commerce and logistics hub of Malaysia, by providing the right incentives and facilitation services to make the investment experience as seamless as possible. I am also happy to inform you that the state government will be announcing several new incentives later next month, especially for several key initiatives including for managed industrial parks.
“In addition, with the opening of international borders and relaxed entry requirements, the state government, through Invest Selangor, will continue our efforts in engaging with the major stakeholders including potential investors, the business chambers, trade associations and the industrial developers in-person, both domestically and internationally to attract new investments into the state.”
Teng added that the annual industrial park expo, the Selangor Industrial Park Expo (SPARK), which hosted several international investors delegations and recorded RM1.2 billion of negotiated sales last year, will also be returning to Kuala Lumpur Convention Centre from Oct 19 to 22, 2023, and that all of their efforts will in turn benefit both the state and industrial developers such as COMPASS.
In his speech, Teng also said that the intensified interest in logistics parks came as no surprise, as reports by GlobalData have indicated that the Malaysian e-commerce market is estimated to register a substantial growth of 19.9% year on year and reach RM38.2 billion in 2022.
Teng went on to say that according to FedEx’s white paper E-Commerce Megatrends to Watch, the global e-commerce is also predicted to increase by 47% in the next five years. Malaysia’s e-commerce market is trending with a similar growth projection and is estimated to grow at a compound annual growth rate (CAGR) of 14.3% between 2020 and 2024.
Teng further said that according to the Chartered Institute of Logistics and Transport Malaysia, about 70% of logistics industry players are located within the state. Therefore, a similar growth trend is reflected in Selangor with growing investment of mega warehouses recorded over these past few years, to cater to this new demand. The good news is that many of these new logistics facilities and warehouses are built with state of the art and a high degree of automation facilities.
[email protected] is targeting MNCs of various sectors including pharmaceutical, electronics and electrical, manufacturing, engineering, cold chain logistics, food and beverage, processing, and packaging related manufacturing and industrial activities.
COMPASS will be gated and guarded and installed with state-of-the-art security systems, featuring high quality worker accommodation, and is strategically located in the centre of a triangulation between North Port and West Port, KLIA and Shah Alam, enjoying instant access to the Klang Valley via a dedicated link to the upcoming West Coast Expressway.
On Aug 24, 2022, COMPASS was awarded the ‘SDG Icon’ (Sustainable Development Goals) by the KSI Strategic Institute for Asia Pacific and the Economic Club of Kuala Lumpur
By Hannah Rafee, Edited by Wong King Wai
The Edge Markets