PETALING JAYA: Rental rates for industrial properties within the Klang Valley is expected to rise this year due to increasing demand for more warehouse space.
According to Midas Properties negotiator Justin Tia, demand for factory space in the first quarter of the year “has been hot” and is set to continue well into the rest of the year.
“The industrial property market is not softening. There are a lot of properties still in demand,” he told StarBiz.
“Some of the properties are still not ready and there are already tenants eager to take them up,” Tia said, adding that there was demand for space from even foreign parties.
He said an industrial lot at the Putra Industrial Park in Puchong was recently taken up by an Italian firm, while a Japanese/Malaysian joint venture had invested in the Subang New Village factory area.
“The premises at the Subang New Village is not yet ready and is already being taken up,” said Tia.
According to him, the average price of factory space at Putra Industrial Park and Subang New Village was RM2 per sq ft and RM1.50 per sq ft respectively.
“We do expect to see an increase in rental rates for space measuring between 20,000 sq feet and 40,000 sq feet this year. For lots over 100,000 sq ft, we do expect some slowdown.”
Meanwhile, property consultant CH Williams Talhar & Wong Sdn Bhd (WTW) in its 2014 property market report said it expected supply to tighten further in 2014, as supply had not caught up with demand recently.
“This is likely to push up rents in 2014 especially for well-planned industrial parks with infrastructure, facilities and services that are capable of supporting high technology and capital intensive manufacturing outfits.”
It said the Klang Valley’s industrial sector continued to grow at a healthy pace spurred by strong levels of foreign and domestic investments.
“This is likely to maintain a robust growth in demand for industrial space in the region,” it said.
Citing the National Property Information Centre (NAPIC), WTW said total industrial property buildings grew from 37,507 units in 2008 to 39,035 units in 2013, growing at an average of 0.7% annually.
“Industrial premises rents moved up marginally in 2013. Selected industrial areas in Shah Alam saw rents appreciate strongly from RM1.20 to RM1.50 per sq ft in 2010 to RM1.30 to RM2.75 per sq ft in 2013.
“Other places such as Taman Perindustrian KIP in Kuala Lumpur have seen industrial rents remain flat in 2013 at RM1.40 to RM1.70 per sq ft compared with 2012.”
WTW said investments in 336 projects in the manufacturing sector totalled RM22.5bil for the first half of 2013, of which 102 projects worth RM2.3bil would be located in the Klang Valley.