The industrial property sub-sector is anticipated to grow moderately this year, boosted by ongoing Government initiatives to boost investments and stable opportunities within this segment.

According to the National Property Information Centre’s (Napic), the establishment of the Principal Hub initiative that offers multiple advantages to multinational corporations that uses Malaysia as a base for their regional and global business operations, will entail better prospects for the industrial sub-sector.

“The flexibility of the scheme that allows companies to decide on the locations of their presence is another plus point for the sub-sector,” said NAPIC.

Implemented on May 1, 2015, the Principal Hub initiative for industrial area management provides 100% tax exemption on statutory income for five years starting from the date the company begins its activities.

One property consultant noted that upcoming infrastructure developments will help to drive the industrial property segment over the next few years.

Among the notable highlights was the RM12.8bil funding for the Pan Borneo Highway, beginning with the construction of the route linking Sindumin in the west coast to the east coast of Tawau.

A proposed rapid bus transit system had also been announced for Kota Kinabalu. Also outlined were the proposed highways of DASH and West Coast and light rapid transit line 3.

He added that rental rates for industrial property sectors also tend to be more stable compared with other sub-sectors.

“It’s because people don’t speculate to flip, like the residential sector. People buy or rent into the sector for their own personal use.”

Meanwhile, according to Napic’s 2015 Property Market Report, the positive performance recorded in the first half of 2015 did not sustain until the end of the year.

It said the industrial property sector recorded 7,046 transactions worth RM11.97bil in 2015, down 13% in volume and 17.5% in value from 2014.

Selangor continued to dominate the market with 28.9% of the nation’s volume, followed by Johor and Perak, each with 16.1% and 9.6% market share respectively.

Napic said the industrial overhang saw a slight increase to record 243 units worth RM240.57mil, up by 7.5% in volume and nearly triple the value of 2014.

“The significant increase in value was contributed by cluster industrial property, which accounted for 45.6% of the national overhang value and were solely in Johor.

“The unsold under construction also observed a similar trend, up by 29.7% to 1,731 units, whereas the unsold not constructed reduced to 87 units, down by 41.2%.”

Napic said the sector’s construction front was sluggish compared to 2014.

Source:
courtesy of THE STAR

by Eugene Mahalingam

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