Developing an ESG-compliant industrial park in Negeri Sembilan - MIDA | Malaysian Investment Development Authority
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Developing an ESG-compliant industrial park in Negeri Sembilan

Developing an ESG-compliant industrial park in Negeri Sembilan

28 May 2024

Setting off on the road less taken is opening oneself to much trepidation and worry. But the adventure and learning from that journey are always well worth it. Negeri Sembilan-based developer Seri Pajam Development Sdn Bhd (Seri Pajam), a specialist in residential and commercial products, is developing a 523.23-acre industrial park called SPD Tech Valley.

Situated in Senawang, the RM3 billion SPD Tech Valley, which will hold its groundbreaking ceremony on May 20, is slated to be the first LEED for Cities and Communities Gold-certified industrial park in Southeast Asia and the first managed industrial park that adheres to ESG (environment, social and governance) standards in Negeri Sembilan.

The target market for the industrial park comprises global players in the tech industry, such as data centres and semiconductors, as well as similar or related companies looking for a place that adheres to their corporate ESG requirements.

Seri Pajam CEO Thomas Ten Wee Seong says: “Some industrial parks focus on investors [who buy and flip the property], but our industrial park focuses on the owners and tenants. We focus on global players and those in the surrounding Senawang area who want to expand their business.” Thomas adds that if the company sold only to investors, the initial bottom line would be good, but it would not be sustainable in the long term.

As SPD Tech Valley is an industrial park that adheres to ESG, Thomas says its master plan and facilities are “inspired and guided by ‘International Guidelines for Industrial Parks’ by UNIDO (United Nations Industrial Development Organisation). During the design stage, we also referred to the United Nations Sustainable Development Goals (SDG)”.

In addition, the Ministry of Housing and Local Government guidelines, along with all local authority directives and policies, were also adhered to.

Seri Pajam acquired the land by signing the sale and purchase agreement in 2022, and the deal was completed in the third quarter of 2023. Before considering the land to be used for an industrial park, Thomas and his team had planned to do something that involved their bread-and-butter business.

“We had an opportunity to acquire this land for residential development. Because Senawang is an industrial town in Negeri Sembilan, we thought why not diversify our operations for a new revenue stream so that we don’t have to rely on residential and commercial income,” he says.

“Also, the government announced two major plans — the NIMP20230 (New Industrial Master Plan 2030) and NETR (National Energy Transition Roadmap). We were already moving [in tandem] with these two plans, because our plan was to generate green energy and cater for more high-tech industries such as the semiconductor industry.”

Another reason, he adds, is the China Plus One strategy, which has resulted in companies’ setting up other manufacturing facilities or factories outside China to prevent over-reliance on Chinese manufacturing. Seri Pajam wants to offer its industrial park as an option for these companies.

At the right time

The company was founded by Datuk Ten Ah Man, Thomas’ father, in 1994. Prior to that, Ah Man co-founded construction outfit Bukit Maju Development Bhd and gained experience and expertise by being the main construction contractor for the 6,233-acre Putra Nilai (formerly Bandar Baru Nilai) by BBN Development Sdn Bhd, a subsidiary of public-listed Nilai Resources Group Bhd (formerly PK Resources Group Bhd).

Over the years, Seri Pajam has built up a competent and reliable senior management team as well as a host of young and vibrant professionals. Today, the developer has grown to more than 250 staff, with senior management comprising individuals with more than 20 to 30 years’ experience in fields such as quantity surveying, accounting and engineering in the construction industry. The younger employees come with a varied background in architecture, civil engineering and marketing, among others. It is this combination of experience and youthful energy that has put the company in a position to venture into the industrial sector.

“We had no knowledge about developing an industrial park. So, we got help from many parties, especially Invest NS (Negeri Sembilan). [Invest NS CEO] Datuk Najmuddin Sharif Sarimon and the team helped a lot with the planning and getting the clients, and were the source of guidance for me — from zero until we could launch our project,” says Thomas.

He says through the Malaysian Investment Development Authority (Mida), which provided much-needed assistance, Seri Pajam learnt that demand from industrial players was high.

“Mida has first-hand information [of industrial players]; there is a long list of foreign and direct investors that want to set up their business in Malaysia.”

While it took time to adapt in a field that was outside their expertise, Thomas and his team decided it was the right time to embark on an industrial park project despite naysayers who were questioning them about their decision.

“We never doubted our decision [to develop an industrial park] but we always look for a solution to problems. We always want to challenge ourselves, to step out of our comfort zone. We feel lucky to be at the right age and time to do this industrial park,” he says.

Serendipity at work

Having decided to develop an industrial park, Thomas and his team found that the Senawang land was best suited for one.

“This piece of land is well situated between many industrial parks and what industrial players need — water, electricity and gas,” says Thomas.

“In the east, we have the national grid line, which will provide ample electricity. In the west, we are adjacent to a river; so, we can extract the water from there and use it, which will be good for those [companies] that have high demand for water — for instance, data centres and glove manufacturers. In the north, there is the national gas line.”

Moreover, to help with energy needs, the park has its own solar power generation centre, which can provide energy to companies in case of a power failure. As for energy storage, Thomas says, “We are in discussion with two energy storage providers: One is traditional battery-type storage and the other is gravity battery, which is something new. When we have excess energy, that energy will lift up a heavy weight with a gear. When there is higher demand, the weight will slowly drop, moving a device and generating electricity.”

SPD Tech Valley will offer two types of factories — ready-built and built-to-suit. There will be 24 light industrial lots, 57 medium industrial lots — of which 33 lots will offer ready-built detached factories — and 21 heavy industrial lots.

SPD Tech Valley, which is expected to take 10 years to be completed, will be developed in phases. The first phase will cover an area of 285.25 acres and offer 13 medium industrial lots, 33 detached factories and 11 heavy industrial lots. The ready-built versions will be 33 detached factories and cater for medium industrial activities. There are three types — A, A1 and B — and they are selling from RM470 psf on the gross built-up.

Types A (eight units) and A1 (two units) have a minimum lot area of 1.3 acres, with the lot size measuring 72m (236ft) by 78m (256ft). The building measurement will be 52m (171ft) by 46m (151ft), with a gross built-up of 3,164 sq m (34,057 sq ft), and will comprise a 2-storey office and a 1-storey factory area. Type B (22 units) have a minimum lot area of 1.1 acres, with a lot size measuring 60m (197ft) by 78m (256ft). The building size is 40m (131 sq ft) by 46m (151 sq ft) with a gross built-up of 2,441m (26,274 sq ft). It will also have a 2-storey office component and a 1-storey factory area.

The ready-built factories will have solar panels installed, while the built-to-suit factories can lease their roofs to Seri Pajam to install the panels and manage it for them. 

The built-to-suit portions cater for medium and heavy industry players. There are 24 medium industry lots measuring between three and five acres, with the selling price from RM70 psf; the heavy industrial lots measure 2.5 to 14.2 acres with the selling price from RM80 psf.

The lots allocated for light industrial activity will involve SPD Tech Valley’s intelligent warehouse, which will not be sold but will be managed by the developer for recurring income.

Thomas says the intelligent warehouse will occupy 20.39 acres and act as extra storage space for customers that may not have enough space in their own warehouse and need a temporary storage facility.

“The intelligent warehouse will be equipped with a warehouse management system featuring automated picking tools and autonomous mobile robots,” Thomas says, adding that cameras will be able to estimate the capacity of the trucks coming in and out, and whether they are fully loaded, thus reducing manpower and costs.

The industrial park is individual-titled and, as such, owners/tenants must sign a Deed of Mutual Governance upon entering the park.

More holistic design

SPD Tech Valley also features other components such as a commercial hub, recreational park, training centre called Centre of Excellence, centralised labour quarters (CLQ) and business support and leisure centre. The last two components will be developed in Phase 1.

The business support and leisure centre will offer recreational facilities such as a swimming pool and gymnasium, as well as a restaurant and boutique hotel.

“We have the Centre of Excellence, a training centre where we will conduct vocational courses to upgrade the skills of workers,” Thomas says.

The CLQ will have 5,000 beds. “It is not just a bed for the workers; it is like a community for them. After work, the have a place to return to that has green spaces, a food court, retail area and prayer area, just like in a residential environment. We provide a free electric shuttle service within the park for workers to be ferried to their workplace, whoever subscribes to the CLQ,” says Thomas.

The commercial hub occupies 39.26 acres and will have 28 commercial lots and 84 shop offices. The commercial lots will house petrol and EV charging stations and a sales gallery. Thomas says some of the shopoffices will be put up for sale with a tentative selling price starting from RM1.2 million; the rest will be retained for recurring income.

“The shopoffices will accommodate a variety of businesses, catering for the everyday needs of the industry worker. Permitted operations will include laundromats, medical clinics, daycare, eateries and cafes, ensuring a comprehensive range of services and amenities are readily accessible to the community.”

In terms of security, artificial intelligence (AI) will be used in and around the park. There will be face and car plate recognition systems; perimeter fencing with AI cameras that can detect trespassers and inform the security personnel; smart visitor management system; and RFID sticker access. Cameras will be installed throughout the park to track any intruders. All this will reduce predictable patrol times as well as ensure action can be taken quickly.

There will also be a recreational park with a jogging track, outdoor gymnasium, multipurpose court, compose area and meditation zones. A rainwater harvesting system will be used for irrigation and solar-powered lights will be used to illuminate the park.

Future endeavours

Thomas hopes that SPD Tech Valley will be a benchmark for other industrial parks in the state, as there are currently no guidelines for such parks. He and his team are working closely with the state government to come up with guidelines.

He says, in terms of talent pool, the population in Negeri Sembilan, particularly Seremban, which is about one million, provides enough talent for the industrial park. “There is no workforce issue,” he says.

The SPD Tech Valley is only 15 minutes’ drive from Seremban town, and accessibility is provided from the Kajang-Seremban Highway (Lekas) and the North-South Highway. In terms of distance to major ports and airport, SPD Tech Valley will be 35km from Nilai Inland Port, 55km from the Kuala Lumpur International Airport, 80km to KLCC, 100km to Port Klang and 280km from Kuantan Port.  

Thomas says Seri Pajam wants to shift the company contribution from 100% residential and commercial to 50% residential and commercial and 50% industrial.

“We also want to venture into other states because, all this while, we have stayed in Negeri Sembilan. So, we are looking at other states, like Johor, Penang and Selangor,” he says, adding that the timeline for the expansion is five years.

The product type that the company would like to develop in other states will depend on the land and location. “We are also trying to diversify from the buy-land-develop-and-sell model; we are looking for recurring income,” he says.

At present, Seri Pajam has an undeveloped land bank of 800 acres, including the more than 500 acres of SPD Tech Valley land, which has a total gross development value of RM4.5 billion.

Source: The Edge Malaysia