The Employees Provident Fund of Malaysia, the Canada Pension Plan Investment Board (CPPIB) and Sparinvest Properties Investors are backing a Malaysian industrial fund.
The AREA Industrial Development Fund (AIDF-1), Malaysia’s first industrial development fund, was launched by private equity firm AREA Management.
AREA chairman Dato’ Stewart LaBrooy said the fund would invest and develop grade-A industrial estates in Malaysia.
EPF chief executive Datuk Shahril Ridza Ridzuan said: “The EPF’s commitment in AIDF forms part of the retirement fund’s forward strategy to increase exposure in real assets as part of our continuing diversification strategy.”
The logistics industry, Ridzuan said, will be a key growth area for Malaysia and an area of focus for the EPF in the long term.
“We seek to capitalise on AREA’s successful track record, as well as on its deep understanding of the local market,” Ridzuan said.
“The key people behind AREA have a long history in industrial real estate development and management, and for that we believe they are able to ensure the fund remains focused on delivering great returns.”
AREA, LaBrooy said, has moved past the conceptualisation stage with the development of an inner-city logistics centre in Ampang, Selangor, at 1.6m sqft, the largest distribution centre to be built in Malaysia.
“The new facility will be a landmark facility to cater to the increasing demand for an inner-city distribution centre in Kuala Lumpur including parcel distribution, e-commerce, self storage, postal services, cold chain supplies, supermarket supplies and fast-moving consumer goods,” he said.
“It will redefine a new breed of logistics centres that will speed up deliveries within Kuala Lumpur and save operators down-time in deliveries to their customers.”
CPPIB made its first real estate investment in Malaysia this year through a joint venture with retail developer The Pavilion Group, investing in Pavilion Damansara Heights, a mixed-use development in Kuala Lumpur.
CPPIB committed around MYR485m (€104m) for a 49% interest in the freehold development, less than 10km from central Kuala Lumpur.