Equalbase Ties Up With Malaysia’s Sunway for $1.7B Johor Logistics Project

Singapore-based logistics builder Equalbase and Malaysian conglomerate Sunway Group broke ground on a 55 hectare (136 acre) logistics project in the southern Malaysian state of Johor on Tuesday, with the joint venture partners saying they have committed MYR 8 billion ($1.7 billion) to the development.

Named after Johor’s longitude, the 103° project is located five kilometres (three miles) from the Malaysia-Singapore Second Link bridge connecting the two Southeast Asian countries in Sunway City Iskandar Puteri township.

“Sunway is committed to making Sunway City Iskandar Puteri the centrepiece of Malaysia’s southern development corridor and cementing Johor’s status as one of the most economically advanced states in Malaysia,” Sunway Group chairman Jeffrey Cheah said in a joint press release. “This latest addition to the vibrant ecosystem of our integrated township here is set to create at least 13,000 job opportunities for the people of Johor and achieve gross development value amounting to more than MYR 8 billion.”

Equalbase declined to disclose further financial details of the joint venture, and Sunway Group had not responded to inquiries from Mingtiandi by the time of publication.

Decade-Long Plan

The warehouse project is mapped out for development in four phases over a 10-year period, with the first stage scheduled for completion by mid-2025. Upon final completion, the project will span over six million square feet of logistics space, according to a transcript of a statement by Equalbase chief executive Nicholas Bischoff at the groundbreaking ceremony.

“Approximately MYR 1.8 billion will be spent for phase one, comprising three warehouses and a total of 220,000 square metres of industrial space,” Bischoff told Mingtiandi. “The warehouse, a modern grade-A facility, will primarily cater to clients in Malaysia and Singapore, with a focus on servicing customers in the Asia Pacific region easily. Our building design is also modular and able to adjust to customer-specific requirements as we go along.”

Designed for leasing to tenants in the FMCG, retail, e-commerce, automotive, pharmaceutical and technology sectors, the warehouse project has received approval for designation as a free commercial zone under Malaysia’s free trade zone system, with companies operating in such locations exempted from import duties, excise duty, sales tax, and service tax.

The 103° project is designed to be Malaysia’s first fully carbon-neutral free commercial zone, according to the partners, and aims to attain Malaysia’s Green Building Index Gold rating.

“We will develop the first fully carbon-neutral free commercial zone in Malaysia which will be achieved through our Equalbase Sustainability Plan, created by our in-house Building Sustainability Team,” Bischoff told Mingtiandi. “This plan starts by considering the total lifespan of the facilities, from the design to its decommissioning and factors in efforts at every step along the way.”

Buildings in 103° will be equipped with rooftop solar panels to generate electricity, and Bischoff added that the project will also reduce environmental impact through use of recycled or less carbon-heavy materials, smart LED lighting, rainwater harvesting and selection of suppliers based on emission transparency.

The partners have also pledged to purchase one square metre of land for reforestation for every square metre of land being developed.

The asset will be managed by Equalbase’s Northmod investment management unit.

Nature’s Capital City

The project is Equalbase’s fourth in Malaysia and comes after the company formed a joint venture in September 2022 with US infrastructure private equity firm Stonepeak to develop logistics assets across Asia. Stonepeak also took an equity stake in the industrial developer as part of that agreement.

In addition to Malaysia, Equalbase has a pair of logistics centres in Singapore and two warehouses in South Korea. In April 2022, the company sold a 1.5 million square foot shed in Johor to Malaysia’s Axis REIT in a MYR 390 million (then $92 million) sale-and-leaseback transaction.

Kuala Lumpur-listed Sunway Group, which counts property development, construction, hospitality, healthcare, education, and REITs among its business lines, invested over MYR 30 billion (then $9.5 billion) to develop Sunway City Iskandar Puteri.

Launched in 2014 and dubbed “’Nature’s Capital City,” the integrated township occupies 2,000 acres (809 hectares) of land spread across six precincts incorporating residential, office, and retail properties, as well as schools and green space.