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Changing Face of Industrial
ASEAN Gold Rush• Population of 623m
• USD 65billion in e-commerce expected by 2020
• USD2.3bn e-commerce revenue in Malaysia in 2016
• USD2.1bn e-commerce revenue in Thailand in 2016
• USD1,582 is average spend per shopper in 2016
• Next big markets are in Vietnam and Indonesia
• 30% of all transactions vis social media (i.e-Facebook and Wechat)
• 12.8% of all ecommerce transactions will be in ASEAN
• B2C market is estimated to grow at 15% p.a. in ASEAN and reach EUR13bn in 2020.
• B2B market is X times bigger (Forbes)
• USD192bn - value of the global e-commerce logistics industry including fulfilment
#8 #4 2016 Agility Emerging Markets Logistics Index n = 45 countries
The Agility Emerging Markets Logistics Index ranks emerging markets countries for their potential as logistics markets.
Malaysia is top 5 in Asia and an over-performer amongst the non-high income economies
Evaluation Component: - Customs - Infrastructure - International shipments - Logistics competence - Tracking & tracing - Timeliness
EFFICIENT LOGISTIC TO BOOST PRODUCTIVITY AND COMPETITIVENESS
#29 #25 2014 Logistics Performance Index (LPI) n = 160 countries
The LPI measures the on-the ground efficiency of trade supply chains, or logistics performance.
Malaysia leapfrogged its position to the Top 5, signifying its offer of the very best mix of economic robustness, commercial opportunity and access to markets.
REGIONAL COMPREHENSIVE ECONOMIC
PARTNERSHIP (RCEP)
• FTA negotiation framework between ASEAN and its key Trade Partners eg Australia, China, India, China, Korea & New Zealand (Combined GDP of USD17 Trillion; 40% of World Trade).
ASEAN ECONOMIC COMMUNITY (AEC)
A single market and production base comprises 5 core elements: - Free Flow of Goods Free Flow of Services - Free Flow of Investment Free Flow of Capital - Free Flow of Skilled Labour Note: Malaysia assume the Chairmanship of AEC in 2015
Myanmar Cambodia Laos
Indonesia Philippines Thailand
Malaysia Brunei Singapore Vietnam
ASEAN AANZFTA
Australia New Zealand
ASEAN + 3 China , Rep. of Korea
RCEP India
Japan
Russia
United States
TPP Chile Peru Mexico Canada
Hong Kong Taiwan Papua New Guinea
APEC
REGIONAL ECONOMIC ARCHITECTURE STRONG TRACK RECORD OF REGIONAL COOPERATION
REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP
Will represent a combinedGDP of USD 17 Trillion or40% of world trade
E-Commerce is growing 25 % in Asia Pacific in 2015
Market research firm eMarketer projects e-commerce sales will eclipse $3.5 trillion within the next five years. The fast-growing Asia-Pacific market is expected to fuel a 25% year-over-year increase in global e-commerce in 2015.
The New Industrial Revolution has arrived
The new Industrial Revolution will rejuvenate the stagnant industry of industrial estate while attracting investors for its renewed demand due to e-commerce and logistics operation. Abandoned and existing warehouses lie on valuable lands waiting to be resurrected with modern infrastructure.
According to Property Data, investors for warehousing and distribution hubs increased 65% globally as cross-border e-commerce took off.
Warehouses and distribution centres are transformed into fulfillment centres equipped with the capabilities to drive profitability.
Malaysians spend 3 hrs/day on social media, the 6th
highest in the world.
31% of Malaysians bought something online in the past month, the 6th highest in the world.
Source: Global WebIndex Q4 2015
Growing middle class
Mobile Penetration rate > 140%
65% of the population is below the age of 40 years
Government Regulation:1. Logistics2. E-commerce DFZ
SEA Statistics (2016)Population: 623mE-c0mmerce CAGR: 15%Market size 2020: EUR13bn
Traffic is bad across ASEAN
The Nielsen Global Survey of Automotive Demand found car ownership is relatively low across South-East Asia: 47% of Filipino households do not own a car, and the figure is 46% for Indonesian households.
Malaysia, however, bucks the trend, with 93% car ownership, placing third in the world. The country also has the highest incidence of multiple car ownership globally with 54% of households having more than one car.
Evolving Last Mile Delivery Technology
New Industrial Parks are providing Industrial REITs with much larger assets to purchase
Logistics is transforming the asset class and Distribution Centres are getting bigger!
PILE IT HIGH – SELL IT NOT SO CHEAP New M&S Distribution Centre is 900,000 sq ft and 25 m high
• Equivalent to 11 Wembley Sized Football Pitches
• Capable of processing 1 million products a day
• M&S will shift from 110 warehouses to just 4
The Industrial market- looking forward
Stock availability still tight- a highly underinvested sector
Rents have been rising over the past 2 years (+30%)
Exciting new mega distributions centres are being built which carry high price tags
Industrial land prices have been climbing leading to in introduction of new innovative multilevel Distribution centres,
E-commerce is driving demand and supply
Demand for new high quality industrial estates will transform the Industrial landscape
Converting old assets to new industrial
Large multi level warehouses have arrived here
This DHL warehouse, called Malaysia Integrated Logistics Centre (ILC), has a footprint of more than one million square feetmaking it the largest warehouse in Malaysia, and will increase DHL Supply Chain’s warehouse footprint in the country by over 100 per cent.
KUALA LUMPUR’S FIRST INNER CITY MEGA DISTRIBUTION HUB
& MALAYSIA’S LARGEST INTEGRATED LOGISTICS BUILDING 1,200,000 sq. ft. of warehouse space.
Coming soon
Idea for 2017: Old shop-house to new industrial
Thank You