Article written by Joyce Low, founder of industrialspace2u.com
Planned vs Unplanned Industrial Park : From Investment Point of View
Did you know that those who invested in planned industrial park of Bandar Bukit Raja Industrial Park enjoyed a Compound Annual Growth Rate of 16% per annum? Price per square feet has increased three folds over a period of eight years. Would you want a piece of action?
When considering investing in a planned industrial park versus a land area which is zoned industrial and developed progressively, another upcoming planned industrial park like EcoBusinessPark V wins hands down.
A planned industrial park is one with proper infrastructure such as water supply, electricity, broadband telecommunication line and wide access road of 132ft ie. dual carriage road. The planned industrial park may be further enhanced with gated guarded industrial park, business incubation centre as well as staff dormitories.
One of the greatest nightmare of owning an industrial land is when the infrastructure especially the road networks and broadband telecommunication system in the area is unable to support the growing demands of the factories and warehouses set up in that industrial area.
This is made worse if there is only single entrance and exit road whereby congestion is experienced due to breakdown of trucks with no routes for traffic diversion available. I used to joke that there are two critical things to get ready before entering such an industrial area ie. having at least half tank of fuel as well as emptying the bladder before starting the journey.
If there is a cost allocated to the time spent in the traffic congestion for transportation and haulage to reach the designated factory or warehouse, in hindsight, a lot of land owners would have chosen a planned industrial park, despite it being slightly more expensive. The slightly higher cost is attributable to wider access road readily built (rather than merely a wider road reserve set back which will take ages to constructed), large tracks of land for lush greenery, water retention pond as well as sewage treatment plant.
In order to attract the younger pool of workers from Generation Y and Z who is searching for wholesome working environment, setting up a factory or warehouse in a strategically located planned industrial park would make attracting talent pools a lot easier.
More importantly, from an investment point of view, we have done a study by comparing two industrial area located nearby each other whereby one of them is a planned industrial park versus another being an industrial zone which developed over time.
In this study we have observed the transacted prices per square feet from JPPH database in Bandar Bukit Raja Industrial Park in Klang developed by Sime Darby versus Batu 5 Meru Klang. The evidence is compelling to further drive the point home to purchase industrial land in a planned industrial park.
The guiding principles of Location! Location ! Location! matters as Bandar Bukit Raja Industrial Park is located in close proximity of 30 minutes from Northport and Westport in Port Klang as well connected via extensive network of highways and expressways of North Klang Valley Expressway (NKVE), Federal Highway and soon to be completed West Coast Expressway (WCE) to distribution points within Klang Valley.
The gradual increase in price per square feet is more eminent over the years whereby an unplanned industrial park may not be able to support the growing demands of the warehouse or factories set up in that location. Hence, this magnifies the point of price appreciation over time and this sharing we hope translates greater understanding amongst industrial property investors. Happy investing!
We would be pleased to provide solutions to your tenancy requirements for factory and warehouse including sublet. Do contact Joyce at +6017 333 8007 or joyce@industrialspace2u.com to learn more about the industrial property we have that is up for sale or rent!
