Pickup in industrial parks


  • Business
  • Saturday, 06 Mar 2010

edy@thestar.com.my

THE industrial property sector is expected to rebound this year as the supply has been stagnant in the last four to five years.

“Since 2004, the prices of industrial land have appreciated as property developers venture into developing industrial parks as a new income avenue to overcome the softer property market,” says MIDF Research in a recent report.

It adds that, currently, industrial players are on the lookout for more than the conventional designs.

“Features such as gated and guarded concepts, super-sized terraces, underground cabling and covered drainage are value-added features in demand. We expect the trend of industrial parks being located in the vicinity of commercial areas, and close to highways, to continue in the future,” the report says.

Nevertheless, it says niche concepts such as “halal parks” and Technology Centres may remain in the offering to serve niche players.

KGV-Lambert Smith Hampton (M) Sdn Bhd executive director Anthony Chua says the number of industrial properties transacted have shown a gradual increase of 13.6% from 2005 to 2008 and the value of these transactions rose significantly by 58% in that period.

“The industrial land prices in some popular schemes demonstrated up trend of over the past 6 years. Popular schemes include area in Kota Kemuning, Glenmarie, Bukit Jelutong and Balakong in Selangor and with few factors boosting the price going up,” he tells StarBizWeek in an email reply.

He says one of the factors involved is limited new supply of industrial properties like for example, in Wilayah Persekutuan where there is no new factories between 2005 to 2008.

“The growing small and medium enterprise sector forms a source of demand for industrial premises and the role of the government in expanding this sector with various initiatives and financing augurs well for the industrial property sector,” he says.

Industrial premises such as terrace and semi-detached factories are suitable for services operation such as those in auto servicing, distributive trade, transportation, light manufacturing or processing.

“Some astute developers who spotted this trend has ventured into industrial schemes to capitalise on this “neglected” sector compared to the residential and industrial sectors,” says Chua.

On the current and new trends in the industrial sector, he says the current trend of developing semi-detached factories is continuing although there are significant changes to the building features.

“Semi-detached factories are transforming from light industrial workshop design to a more corporate look. This has attracted some companies to use these newer factories as their corporate offices,” he says.

Chua elaborates that the recent trend include “super-link” factories, somewhat similar to super-link houses. These are terrace factories with large built-up areas, some are almost similar in size to semi-detached factories (6,000 sq ft and above).

He adds that a fairly recent introduction in the industrial property scene is the set-up of Halal Parks in establishing Malaysia as a global Halal Hub.

“This is a government initiative and to-date 17 Halal Parks have been planned with five in operations. The innovation in creating Halal Parks is in bringing the concepts and practices for the entire chain of activities encompassing industrial and food development, food manufacturing, Halal traceability, logistics and certification under one location,” says Chua.

Mah Sing Group Bhd’s group managing director cum group chief executive Tan Sri Datuk Seri Leong Hoy Kum says the company focuses on appropriate product offering, optimum pricing and promotion strategy.

“Mah Sing’s experience in industrial developments includes the successful 300-acre Mah Sing Integrated Industrial Park in Sungai Buluh. This project with a gross development value of RM400mil was launched in 1995 and is fully sold. Furthermore, we have a unique user’s viewpoint for industrial developments, as we have a profitable plastics business with factories in both Malaysia and Jakarta.

“We recently launched iParc@Bukit Jelutong in January whereby we saw overwhelming response, with 40 units out of a total of 42 units being sold,” he says.

Due to the strong response, he says, Mah Sing has decided to develop a similar concept for iParc 2@Shah Alam to cater to the spill over demand.

“We are careful to select lands that fits the requirements of industrial property buyers like for example; excellent road, rail, air and sea connectivity, readily available infrastructure facilities like water, electricity and telecommunications and also close proximity to mature residential developments which provides a catchment of skilled and unskilled labour force,” he says.

He adds that Mah Sing also creates fresh demand by offering flexible designs to suit the needs of the end user, hence the layout design can be configured to specific needs.

Effectively, he says, these can be customised factories at a fraction of the cost of commissioning a purpose built factory.

Another developer involved in the industrial sector, LBS Bina Group Bhd says that the property sector has seen a strong comeback since the third quarter 2009 with renewed buying interest for property.

“Given the improving economy sentiment, we expect strong recovery in demand for properties, both residential and commercial for year 2010. We remain optimistic over the demand for our industrial units in Puchong in view of the strong demand in this vicinity,” says Lee Eileen from sales and marketing department through an e-mail reply to StarBizWeek.

Generally, LBS is positive about the business outlook for 2010 as the Malaysian economy is set to recover, albeit slowly.

“This was proven after our successful launching of our 58 units of semi-detached factory at Taman Perindustrian Tasik Perdana@Puchong on January last year.

“The sales were picking up from May 2009 and we managed to achieve 71% of the sales of the said project on September 2009. The balance units are available for sale and reserved for bumiputra only,” she says.

The project in Taman Perindustrian Tasik Perdana covers 39 acres of development which consists of 58 units of 1 1/2 storey semi-detached factory and 11 industrial lots.

“The semi-detached factory was sold at the range of RM1.4mil to RM2.5mil with a built up area of 4,043 sq ft. We are selling the industrial lot at RM80 per sq ft and the land size of the lot is ranging from 0.5 acres to 1.88 acres. Currently, there are four industrial lots available for sale and is reserved for Bumiputra only,” she says.

The group will launch five units of 3-storey bunglow factory with built up area of 8524 sq ft at the land size of 0.316 acres onwards in April. The proposed selling price of each units is RM3.5mil onwards.

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