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Shah Alam, mature industrial areas to see greater redevelopment

PETALING JAYA (July 13): Mature industrial areas such as Shah Alam in Selangor are to see more redevelopment activities in the near future, said Knight Frank Malaysia executive director of capital markets Allan Sim.

“Shah Alam is entering into an early transformation and redevelopment phase from a manufacturing centric location to a modern urban logistics hub. The scarcity of industrial land within the mature and well-connected locale coupled with increasing demand for higher specification logistics facilities have propelled many landowners to capitalise on the trend to redevelop their dated industrial premises,” said Sim in a press release in conjunction with the release of the property consultancy's 'Real Estate Highlights 1st Half of 2020' report today.

Sim noted that despite rising land prices in Shah Alam, there are still factors incentivising logistics players to look into the locality. "These include Shah Alam’s central location providing opportunities for more delivery runs per day, as well as the advent of construction going into multi-storey to balance the real estate costs," he said.

He added that notable upcoming redevelopment projects within Shah Alam include the former site of Advance Synergy by Mapletree and the 4.37-acre Xin Hwa site, both at Section 22; and the former FEC Cable site at Section 16. "To date, the largest redevelopment site in the locale encompasses the 71-acre former Chemical Company of Malaysia Bhd (CCM) facility," shared Sim.

“Even as the economy is going through the aftermath of the pandemic, we are seeing more redevelopment planning activity of industrial plots within Shah Alam. Unlike many traditional businesses, the end-users of these redevelopments are mainly e-commerce and logistics players who are beneficiaries of increased online shopping traffics during the MCO period.  Post-MCO, online trading will be central for more businesses," offered Sim.

Separately, he noted that for larger industrial park projects within the Greater Klang Valley, Knight Frank foresees developers relooking at plans involving speculative builds of smaller industrial products. "More developers are expected to respond fluidly to current market demand; for example, by securing interests of manufacturers / operators to engage in larger build-to-suit products,” said Sim.

Meanwhile, in Penang, Knight Frank Penang executive director Mark Saw said he continues to see positive demand for industrial land at mature areas such as Batu Kawan Industrial Park and Penang Science Park. "In the short to medium term, we foresee further expansion southwards of mainland Penang and growing interest in the northern part of the state, in and around Seberang Perai Utara (SPU) with focus on light industrial developments," added Saw.

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