Factory space in Klang Valley fetching higher prices

PETALING JAYA: Prices of factory space within the Klang Valley have been steadily rising this year, despite the subdued property market.

CH Williams Talhar & Wong’s (WTW) managing director Foo Gee Jen said prices of bigger lots have been steadily climbing over the past three to four years.

“This is because there has been a shortage of supply for larger lots, especially those dedicated to logistics and warehousing.

“This is in contrast with smaller, terraced factory lots, where take-up and occupancy rates have been low,” he told StarBiz.

According to Foo, prices of some factory lots in Shah Alam and Glenmarie currently averaged around RM100 per sq ft (psf), compared with between RM50 and RM60 five years ago.

He said development of industrial lots within the Klang Valley was largely “overlooked”.

“Today, most developers focus on residential projects,” he said.

An industry observer pointed out that prices of factory lots within the Klang Valley will always continue to rise due to the lack of supply of space.

“It’s because the industrial sector is considered not sexy by most developers,” he said.

According to WTW’s industrial sector report for the second half of last year, the last six months of 2014 saw 12 noteworthy transactions totalling RM5.3bil worth of property.

The majority of the transactions were for industrial plots located in Shah Alam, Kota Damansara and Semenyih.

WTW said rental rates in general remained stable in the second half of 2014 at between RM1 and RM2.75 psf.

According to WTW’s property market report 2015, a total of 619 projects had been approved by the Malaysian Investment Development Authority as of September 2014.

The report said that total projected capital investment was around RM63.5bil, with foreign and domestic investments at 55% and 45%, respectively.

Projects invested in Malaysia are mainly in electronic and electrical products, as well as machinery and equipment and chemical and chemical products, said WTW.

“The industrial sector in the Klang Valley, Penang and Sarawak is expected to stay vibrant in 2015, where transacted prices/rentals will be on an upward trend.

“Lahad Datu with oil-palm based industries is expected to remain slow in 2015 due to the lower crude palm oil prices in 2014.”

WTW said terraced factories remained the largest segment of total supply of industrial units (76%) in 2014.

“The Klang Valley recorded 39,179 units of industrial factories in 2014, a 0.9% growth from 2013.” it aded

Three new industrial developments were launched.

They are Gravitas Biz Park at Section 22, Glen Industrial Park at Telok Gong and Gateway 16 at Bandar Bukit Raja.