Lack of Supply of Industrial Properties

Only available on StudyMode
  • Download(s) : 120
  • Published : March 4, 2013
Open Document
Text Preview
Introduction Of The Market
Malaysia currently play as a role as a developing country, industrial development will have the most high market potential and the future growth is expected to go higher. In order for Malaysia to achieve a developed and high income nation by 2020, the demand of the industrial properties would definitely increase. Industrial properties are defined as factory-office multiuse property; factory-warehouse multiuse property; heavy manufacturing buildings; industrial parks; light manufacturing buildings; and research and development parks. However, Malaysia is experiencing a serious issue that very little supply of industrial properties is in the horizon despite demand outstripping supply in the key areas of Klang Valley, Penang and Johor Bahru.

What Condition Influence
The condition which influences the demand of industrial properties that has exceeded supply is the Malaysia Government's commitment to maintain a positive business environment is conducive to the growth and profitability of the company's opportunity. In addition, effort that government done to support business activity have included a decrease in the corporate tax rate to 25% (2009) and the maximum individual tax rate to 26% (2010), along with tax incentives for developed projects, such as Pioneer Status, venture tax allowance, incentives for high technology industries, reinvestment allowance, strategic projects and the institution of international operations. In a nutshell, lack supply of industrial properties was caused by well development of industry thus generate overwhelming demand of industrial properties.

What are the consequences of
The consequences of overwhelming demand caused housing developers capitalizing on the massive growth of the residential market because of the strong competition for land. Therefore, capital values have increased as much as 50 per cent and rental rates by 20–30 per cent over the past four to five years according to Tew who is also...
tracking img