How to Invest in Property in Malaysia: A Complete Guide

For companies aiming to expand or set up in one of Southeast Asia’s most industrialized countries, renting a factory in Malaysia can be a vital decision that has the potential to be either made or broken for your company. It’s important to know what goes into those costs so you can budget and be profitable in the long run. In this article, we look at factors that determine the factory rent, costs by state, industrial zones, that offer competitive rates as well as additional expenses and tips for negotiating rent.

Third-Party Entities and Effects on Factory Rent

Several key factors determine what you will pay to rent a factory. Knowing these can help businesses select the most suitable option for their needs:

• Location

But typically rents in factories are higher in urban centres like Kuala Lumpur or Penang because of demand and accessibility. Rental rates tend to be lower in suburban, or rural, areas.

• Factory Size

Obviously, larger factories with larger floor space and storage capacity would be charging higher rents.

• Amenities and Infrastructure

Modern facilities such as loading docks, large ceilings, and up-to-date utilities may also involve a superior price for the property.

• Proximity to Transport Hubs

Rental cost will be greater at factories close to ports, airports, or major highways.

• Industrial Zone Status

Factory costs above these industrial zones are high because factories in this state have strategic advantages and good infrastructure.

• Lease Terms

Cheaper rates may be available on longer leases and pricier on short-term leases.

Rent Costs by State

There exists a lot of variation in factory rental cost across Malaysia. Here’s an overview of typical rates by state:

• Kuala Lumpur and Selangor

Smaller factories can rent out monthly for RM3,000 to RM10,000. Prime areas like Shah Alam and Klang can have larger industrial properties costing from over RM50,000 per month.

• Penang

Penang is a hub for electronics and manufacturing, factory rents in Penang range from RM4,000 to RM15,000 per month, based on size and location.

• Johor

Johor’s rents for property are also competitive for proximity to Singapore, as it has RM2,000 to RM20,000 per month in locations such as Pasir Gudang and Iskandar Malaysia.

• Perak and Pahang

And these states provide better options at lower prices as rents that range from RM1,500 to RM8,000 are common.

• Sabah and Sarawak

Rents in East Malaysia factories run as low as RM1,000 and up to RM5,000 monthly in cities like Kota Kinabalu and Kuching, making them more of the cost-effective choice.

Industrial Zones with Competitive Rates

Some industrial zones in Malaysia are known for offering competitive factory rental rates:

1.  Shah Alam Industrial Park (Selangor)

It offers modern factories with excellent connectivity to highways and ports.

2.  Kulim Hi-Tech Park (Kedah)

An area rich in high-tech industries that have cheap rental rates that rivals an urban centre.

3.  Pasir Gudang Industrial Estate (Johor)

This zone is also an interesting option for logistics-heavy businesses due to its proximity to Johor Port.

4.  Seberang Perai (Penang)

It also provides a cost-effective approach to continue to benefit from Penang’s industrial ecosystem.

5.  Gebeng Industrial Estate (Pahang)

This zone is famous for its petrochemicals and heavy industries and provides competitive rates for large-scale factories.

Additional Costs to Consider

Beyond monthly rent, there are other costs associated with renting a factory or buying property in Malaysia:

• Security Deposits

The upfront cost is typically equivalent to 2-3 months’ rent and is refundable after the end of the lease so long as the damages are not incurred.

• Maintenance Fees

Managed industrial parks can charge maintenance fees for facilities and services that are shared in factories located on their premises.

• Utility Costs

Especially for energy, intensive operations, electricity, water, and internet costs can add up.

• Insurance

There’s also factory insurance for fire, theft or liability suing others for injuries.

• Renovation Costs

It could cost you a lot to customize the space to fit your operational needs.

• Legal and Documentation Fees

Lease drafting and signing costs, and title verification costs.

Tips for Negotiating Rent

Negotiation can save your business from paying thousands in rental expenses. Here are some tips to rent property in Malaysia:

• Research Market Rates

Learn about the average prices to rent in your area when you make an offer.

• Highlight Your Business Potential

If you have a stable track record or long-term growth prospects, landlords may provide you with better rates.

• Negotiate for Incentives

Ask for shared costs on maintenance or, better yet, request rent-free periods for setup or renovation.

• Consider Longer Leases

There are landlords who often like long-term tenants and will probably grant a discount for longer-term leases.

• Engage a Professional

Helps you get favorable terms. Or property agents or negotiators.

Conclusion

The monthly rental price of a factory or property in Malaysia doesn’t come for nothing. For example, like most costs, location plays an important role, as does size and infrastructure; additional costs, including maintenance and insurance are also not to be forgotten. Businesses can save money and find a factory that works by knowing the market, by comparing different options and negotiating effectively. Renting a factory in Malaysia involves careful planning and strategic decisions, but with a little bit of planning and strategizing, renting a factory can be a cost-effective step towards operational success. Enjoy hunting property in Malaysia with Chanel Agent of Aczzeon properties to see various options of lands and factories for rent or sale especially in Johor.