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Malaysia: Industrial property sector resilient?

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  • Malaysia: Industrial property sector resilient?

    AMID the struggling economy, the local industrial property market seems to fare better than office and residential properties although industry players expect the market for this asset class to remain flattish this year.

    They concur that the current slowdown in manufacturing orders has not impacted industrial property as tenancy contracts for industrial property are locked in for a longer period of between five and 10 years compared with two to three years for office space.

    They say these long-term tenancy commitments reduce any panic selling or “irrational transactions”, thus sustaining the prices and rental rates of these properties.

    This property sector has remained relatively resilient because landlords are more willing to work out “win-win” solutions with their tenants during the current difficult times and tenants are allowed to pay up when business conditions recover.

    “Landlords are more inclined to help roll-over rentals because capital expenditure (capex) for signing up new tenants is quite high,” an analyst from Kenanga Research tells StarBizWeek.

    The reason for this is that industrial property space is usually tailored for specific tenants and any changes in tenancy will incur additional costs of construction and renovation.

    The gross yield for industrial property is around 7% to 13%, with rental rates averaging at between 80 sen and RM1.75 per sq ft.

    Association of Valuers and Property Consultants in Private Practice Malaysia (PEPS) president James Wong, who thinks the impact of the global financial crisis has not been fully felt yet, says industrial property prices are stable and have not declined.



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  • #2
    I see lots of single post threads and few replies. Is propertytalk not really notable in Asia, and if not perhaps a new domain name would help you owners out a lot?