New industrial park projects in the Klang Valley are virtually non-existent and industrial properties are in short supply, creating a bubble of higher-priced industrial properties and presenting the perfect opportunity for developers to expand into industrial park projects.
James Wong, Managing Director at property consultancy firm VPC Alliance (KL) Sdn Bhd, said vacant industrial land in Bukit Jelutong, Glenmarie and Section 23 Shah Alam have experienced considerable price increases of 60 to 100 percent over a six year period, an estimated 10 to 17 percent annual increase over the average price.
Industrial property accounts for only 2.5 percent of total property transactions, with an average annual transaction of about 8,000 units.
“The industrial property market is considered quiet for the past few years, as developers are concentrating on residential and commercial developments and there is hardly a developer that concentrates on industrial development,” said Mr. Wong.
“With the Government’s big push to transform the country’s economy under the Economic Transformation Programme (ETP) and with the industrial sector as one of the main drivers of the economy, it is timely and ripe for developers to come forward to develop more industrial parks and estates to cater to the increasing demand.”
Mr. Wong said that the boost in the manufacturing sector from RM32.6 billion in 2009 to RM47.2 billion in 2010 contributed to a 44.8 percent increase in the industrial sector alone.
Small and medium enterprises (SMEs) have contributed more than 30 percent to the national gross development product (NGDP). However, many SMEs are still located in inadequate and neglected sites such as squatter areas and illegal buildings.
“Developers should develop parks for the SME industries of similar trades to group them together,” he said, highlighting the need for the SMEs to be conveniently located to associated logistics and supporting SMEs.
Mah Sing Group Bhd was the innovator in the new generation of multi-purpose semi-detached factories, added Mr. Wong.
Tan Sri Leong Hoy Kum, CEO and Managing Director at Mah Sing, explained that easily accessible three-storey semi-detached corporate factories in strategic locations are in demand. Older units are either too large or too small and are not multi-purpose capable, a feature required by SMEs, distribution companies, light manufacturing and food industries.
“Our research shows that semi-detached factories currently make up about 10 percent of the total supply of industrial units in the Klang Valley,” he said.
“We foresee there will be strong demand from the SMEs, halal food industries, light manufacturing, distributive trade and those who need to upgrade to industrial properties which can serve multi-purpose functions such as integrating their logistics, warehousing, showrooms and offices under one roof,” said Mr. Leong.
Source: Homeguru.com.my
