by 
11th September 2024
Why Industrial Land is Cheaper than Industrial Parks
Discover why industrial land is generally cheaper than industrial parks. Learn about the differences in infrastructure, location, amenities, and investment costs to make informed industrial property decisions.
What is Industrial Land?
Industrial land refers to real estate specifically designated for industrial activities such as manufacturing, logistics, warehousing, and distribution. Unlike residential or commercial properties, industrial land is subject to zoning regulations that facilitate industrial operations. Investing in industrial land typically means acquiring a raw plot that requires development and infrastructure.
Key Features:
- Zoning and Permits: Dedicated to industrial use with specific zoning regulations.
- Development Requirements: Requires significant investment in infrastructure like roads and utilities.
What is an Industrial Park?
Industrial parks are pre-developed areas designed to support various industrial activities. They provide ready-to-use facilities, such as Centralized Labour Quarters and recreational parks. These industrial parks streamline operations by offering existing infrastructure and amenities, making them an attractive option for businesses looking for a hassle-free setup.
Key Features:
- Complete Infrastructure: Includes roads, drainage, utilities such as water, electricity, telecommunication lines, and infrastructure like sewerage systems.
- Strategic Location: Typically located near major transport routes like highways, railways, airports, and ports.
Why Industrial Land is Generally Cheaper
1. Lack of Developed Infrastructure
- Industrial Land: Typically refers to raw, undeveloped plots of land. The cost of industrial land is lower because it does not include infrastructure like roads, utilities, and drainage systems. Buyers must invest additional funds to develop these essential facilities.
- Industrial Park: These are pre-developed areas with existing infrastructure and amenities. The higher initial cost reflects the investment in creating and maintaining comprehensive facilities.
2. Location and Accessibility
- Industrial Land: Mostly located in less developed or peripheral areas where land prices are generally lower. The lack of immediate infrastructure and accessibility might contribute to the lower price.
- Industrial Park: Often situated in strategic locations with excellent accessibility to major transport routes and logistics hubs. The premium for these locations is included in the cost, reflecting its advantageous positioning.
3. Investment in Amenities and Services
- Industrial Land: Does not come with added amenities or services. Buyers are responsible for providing their own facilities, such as security, waste management, and maintenance.
- Industrial Park: Shared services like security, landscaping, and waste management are included, with costs incorporated into the maintenance charges for the land within the park.
4. Immediate Operational Efficiency
- Industrial Land: Requires significant time and effort to develop before becoming operational. This delay in usability is often reflected in the lower initial cost.
- Industrial Park: Offers immediate usability due to existing infrastructure. Businesses can start construction and operations more quickly, which justifies the higher upfront cost.
5. Market Demand and Supply
- Industrial Land: The price can vary widely based on supply and demand in less developed areas. The market for raw land might be more variable, contributing to lower prices in some cases.
- Industrial Park: Often has higher demand due to convenience and reduced setup time. This demand can drive up prices, especially in well-established industrial parks with high-quality infrastructure and connectivity to ports and highways.
Conclusion
Industrial land is generally cheaper than industrial parks primarily due to the lack of developed infrastructure and additional amenities. The lower initial cost reflects the raw nature of the land, while extra investment is needed for development. On the other hand, industrial parks come with ready-to-use facilities, complete infrastructure, and immediate usability, justifying their higher prices.
By understanding these differences, businesses can make informed decisions about their industrial space investments, balancing initial costs with long-term operational benefits.
Explore Your Investment Options
To learn more about My Industrial Specialist and find the best option for your business needs, visit our website. Our experts are here to help you navigate the complexities of industrial property investment and find a solution that aligns with your business goals. Contact MyIndustrialSpecialist today to begin your industrial investment journey.
