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The Hidden Costs of Industrial Land Ownership

  • Writer: Simon Lim
    Simon Lim
  • Aug 29
  • 2 min read

Buying industrial land might seem straightforward—pay the price, get the title, and wait for appreciation. But beneath the surface, there’s a layer of costs that can quietly eat into your returns if you’re not prepared.


Let’s unpack the hidden costs every industrial landowner in Malaysia should know about.


1. Quit Rent and Assessment Fees

These are annual charges imposed by the local council and land office. While they’re usually manageable, they can spike depending on land size and zoning.


What to expect:

  • Quit rent: Charged by the land office, based on acreage and category

  • Assessment tax: Paid to the local council, often higher for industrial-zoned land


Tip: Always check the latest rates with the local authority—especially if you’re converting land use.


2. Maintenance and Upkeep

Vacant land still needs care. Overgrown vegetation, illegal dumping, and poor drainage can lead to complaints—or even fines.


Common expenses:

  • Grass cutting and perimeter clearing

  • Drainage maintenance

  • Perimeter fencing or security patrols


Neglecting these can also hurt your resale value or tenant appeal.


3. Infrastructure Contributions

If your land is part of a larger development or near a new road, you may be asked to contribute to infrastructure upgrades. These aren’t always optional.


Examples include:

  • Road widening or access road construction

  • Drainage system upgrades

  • Utility extensions (electricity, water, sewer)


These costs can range from a few thousand to hundreds of thousands depending on scope.


4. Conversion and Premium Fees

If your land is zoned agricultural or residential and you want to convert it to industrial use, be ready for conversion fees. These are paid to the state government and vary by location, land size, and market value.


You’ll need to budget for:

  • Application fees

  • Premium charges (based on new land value)

  • Consultant or legal fees


Conversion can unlock value—but it’s not cheap or instant.


5. Compliance and Approvals

Before you build or lease, you’ll need approvals from BOMBA, DOE, and the local council. These come with their own costs—both in time and money.


Expect to pay for:

  • Environmental impact assessments (if required)

  • Fire safety compliance

  • Building plan approvals


Delays in these can stall your project and affect ROI.


Final Thought

Owning industrial land isn’t just about holding an asset—it’s about managing it strategically. The hidden costs aren’t dealbreakers, but they are deal shapers. If you plan ahead and factor them into your investment strategy, you’ll be better positioned for long-term gains.


Thinking of buying or repositioning industrial land?  

Let’s talk—I’ll help you navigate the costs and unlock the potential.


Simon Lim +60 16-448 9663

 
 
 

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Simon Lim

+6016-448 9663

R17 & R18, LEVEL 5, WISMA SCLAND, EMPORIS,

Persiaran Surian, Kota Damansara,

47810 Petaling Jaya, Selangor

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