Factory For Sale Malaysia

As the Malaysian investment landscape evolves, some investors are turning their attention to a new kind of property investment known as industrial property investment. In comparison to the rest of the investment portfolio, this sort of investment has a high entrance hurdle. Only a few investors are engaged in the aforementioned scenarios. Despite the high entrance hurdle, this sort of investment produces consistent and attractive rental income when compared to agricultural, residential, or even commercial (i.e. shoplots/offices) assets. Factories, warehouses, offices with warehouses, and distribution/logistic centers are all examples of industrial property.

Profile of a good renter

Local and international manufacturers, industrialists, and corporate entities are common tenants of industrial sites. Real estate brokers believe that the aforementioned renters are determined and not easily swayed. The majority of the renters in the aforementioned groups will only contact the landlord or their agent if they are serious about the property. The aforementioned tenants would generally respect and comply with the tenancy’s terms and conditions until it expired. The majority of renters remain for a long time and want the opportunity to extend their lease for another 2 to 3 years at the conclusion of their current tenancy. One key feature is that these renters are well-off and pay their rent on time.

Consistent rental income

Unlike commercial shop lots and residential apartments, industrial zone occupants have a comparatively high relocating cost. Once manufacturers, distributors, and logistic companies find a suitable location to rent, such as a factory to manufacture and store goods, they will have to invest a significant amount of money to begin operating in that specific area, such as obtaining the necessary licenses, permits, and approvals from the relevant authorities, registration for water and electricity supply, factory renovation, and machinery installation (if any).

They may move out if forced to, but because to the very high costs of moving out, such as moving charges for heavy machinery, remodeling of the new site, and installation expenses, they will usually remain on despite acceptable rental increases. As previously stated, the majority of renters will exercise their right to extend their lease at the conclusion of the tenancy term.

Industrial land is in short supply.

The land that is offered on the market in Malaysia has been pre-planned by the state authorities for various reasons and is divided into several zones, the most popular of which are agricultural, residential, and commercial zones. The industrial zone is the least available of all three zones on the market. Industrial properties are generally assigned distant from cities and near to ports to limit the amount of pollution emitted by manufacturers, warehouses, and distribution centers, resulting in a scarcity of industrial land. Nonetheless, the Malaysian government is providing additional land for industrial zones in order to lure national and international corporations to invest in the country.

Capital appreciation is high.

In compared to the fourth quarter of 2015, Malaysia’s economy fared better in the first quarter of 2016, with industrial activity increasing by 4.5 percent. Due to the devaluation of the Ringgit, the cheaper cost of doing business, and Malaysia’s comparatively low labor costs, other nations have increased their demand for Malaysian produced products. As a result, there is a need for industrial land and buildings. Perak’s state government has set aside a 16-hectare block of land for the development of an industrial park to accommodate the need for larger local and international businesses. In the near future, Iskandar Malaysia is expected to experience an influx of industrial land.

High-profile financiers

Because the entrance price of a factory is often a couple of million dollars compared to condos and retail lots, investors in industrial property typically have a stable supply of money and a large cash flow. As a result, most investors have a lot of buying power. To put it another way, they will not simply dispose of property at cheap prices in order to restrict the property market during a downturn.

How can we know whether an industrial property is a good investment?

Location

The single most significant factor in property investing is location. The location of the property for factories and warehouses would also include the haulage cost, which is the cost of trucks and lorries delivering products from ports to the industrial property and vice versa. Depending on whether the method of transportation is by water or by air, the haulage is determined based on the distance from the sea port or airport. As a result, it is critical that the manufacturing be located near an airport or a port. As a result, Klang and Penang are ideal places to invest.

Factory/warehouses in a semi-detached structure

There are terrace, semi-detached, and bungalow factories / warehouses, just as there are terrace, semi-detached, and bungalow residences for residential property. Many manufacturers used to work in terrace factories two decades ago.

Due to the increasing importance of corporate image, several companies have decided to operate out of a semi-detached factory in recent years. A semi-detached factory has its own private parking lot, enabling employees to park inside without penalty or hindering trucks. The semi-detached plant also has a larger road entrance, making vehicle access simpler.

High ceiling to floor height

We all know that buildings with higher ceilings have a greater market value since they give the image of being more luxurious and spacious. The high ceiling is highly significant for industrial properties, especially factories, with a usual minimum floor to ceiling height of up to 30-35 ft being optimum. Because some of the gear is tall, a greater floor-to-ceiling height is necessary to fulfill the space requirements.

A plentiful supply of power

The standard and minimum need for electrical supply for factories is 200 Amp. Some heavy manufacturers may demand a greater electrical supply. Manufacturers would have to apply to Tenaga Nasional Berhad (TNB), which would be inconvenient and expensive.

A strong foundation

Industrial property investors must also examine a technological aspect that most residential and commercial property owners overlook. As an industrial property investor, you must determine the maximum weight that the plant can support before the whole structure sinks. A competent factory should be able to support a weight of at least 15kN/m2.

Not too large of an office

Most factories now come with built-in offices, allowing those who buy or rent the plant to avoid having to remodel the space to fit their administrative employees. Furthermore, the office design plays a vital part in presenting a positive corporate image to the organization. Such factories would get a higher value from the appraiser.

It is true that size does matter.

The plant’s land size should be about 15,000 square feet, with a build-up area of around 10,000 square feet. Small spaces make it difficult to drive a vehicle through and limit equipment space. If the area is too vast, though, the owner may have difficulty renting or selling it in the future. The market price for a plant of this scale should be about RM 4 million.

Conclusion

Before investing in industrial properties, parties interested in expanding into this industry should evaluate all of the aforementioned criteria.

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