by 
5th July 2024
4 Key Factors to Consider When Buying a Factory in Malaysia
Investing in industrial property, particularly factories, is a strategic move that can offer substantial benefits. The rise of e-commerce has driven demand, making it a favorable time to explore this sector. Here’s a guide on what to consider when buying a factory in today’s market.
To Purchase or to Rent?
The first decision is whether to buy or rent. Buying a factory is often the preferred choice if the budget allows, providing long-term savings and stability. Owners can avoid the uncertainty of rent increases or the risk of landlords selling the property. Additionally, buying a factory allows businesses to benefit from the Industrial Building Allowance, offering tax advantages.
Renting can be a viable option if immediate capital is a concern. It generally requires lower initial payments and offers flexibility. However, renting carries the risk of potential disruptions if the landlord decides to sell or increase rent. Moving expensive machinery to a new location can be costly and time-consuming.
Location
Location is a critical factor in factory investment. Proximity to transport nodes, customers, suppliers, and other supporting industries can significantly impact operational efficiency. Consider the frequency of shipments, state regulations, and the availability of skilled labor in the area. An ideal location should support your business needs and growth potential.
Office to Production Space Ratio
Factories with a balanced office to production space ratio are more desirable. A high proportion of office space can make the property harder to sell or lease. Look for factories with approximately 30% office space and 70% production space. This flexibility allows for potential reconfiguration to meet changing business needs.
Space Design and Functionality
The design and functionality of the factory should align with your operational requirements. Opt for properties with high eave heights and ample space, even if they come at a slightly higher cost. This additional space can accommodate future expansion and improve operational efficiency. A well-designed factory can also enhance its resale or rental value.
To Purchase at a Fair Price
Conduct a thorough cash flow analysis to evaluate the financial feasibility of buying a factory. Compare the costs of buying versus renting, considering tax savings and potential depreciation deductions. It’s crucial to purchase at a fair price, ensuring the property meets your business needs and offers long-term value.
Make Your Factory Purchase Experience Best with MYIndustrialSpecialist
Engaging a local expert like MyIndustrialSpecialist can make a significant difference in your factory purchase experience. We offer personalized support, leveraging our extensive network and industry knowledge to help you find the best deals. Our professionals understand the intricacies of the industrial property market and can provide valuable insights to aid your decision-making process.
Our expertise ensures you get a property that meets your specifications and budget. We stay updated on the latest trends and insights, helping you spot strategic locations and suitable industrial properties. Contact us at myindustrialspecialist.com for more information and to start your factory investment journey.
