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RM508 million Simmtech factory will be ready by 1Q 2022. (that’s soon!)

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RM508 million Simmtech factory will be ready by 1Q 2022. (that’s soon!)

Buying land versus the total gross development value (GDV)

When property developers buy a piece of land, the price they are willing to pay would probably be around 10% of the total gross development value. In other words, if it’s a RM20 million land, the property development they will develop may be RM200 million. This is 10x the land cost.

When Simmtech decided that they will build a RM508 million, surely they are not expecting a sales turnover of just RM508 million. It is surely way way way higher than that.

Surely they are not going to build a factory to operate it for one or two years. It’s definitely going to be for many many many years too. Just look at Intel Malaysia for example. They came to Penang in 1972. They are still here today.

Surely they are thinking of the world market for their products and not just for local consumption. Malaysia is a top 25 largest trading nation. (Read here) So, we can definitely export a lot more to the world.

This is why when it’s a RM508 million factory, they will definitely be here for a long time. They will hire many people and they will also pay them well so that they could attract and retain talents too. This is why the demand for properties would also continue to happen too.

Article in edgeprop.my Simmtech, a South Korea-based manufacturer of printed circuit board and packaging substrate for semiconductors has said that its new facilitiy’s construction is on track and scheduled for completion in the first quarter of 2022 (1Q22).

The new factory is anticipated to create more than 1,000 high-skilled jobs in engineering, manufacturing and quality management by the first half of 2022 (1H22). Simmtech Southeast Asia managing director Jeffery Chun said, “With synergistic support from federal government agencies, especially the Malaysian Investment Development Authority (MIDA) and state government agencies, our greenfield project is chartering at lightning speed to ramp up capacity to our major customers in this region.” Please do read the full article here: Article in edgeprop.my

Can buy the properties nearby the factory?

If you are working there, then it’s indeed a great buy versus staying in the island and then spending 2 hours on travel daily…

If you intend to buy and then rent to people working there, just need to be savvy that there if your targeted tenant is from island side, they may choose to stay in the island side and if they intend to rent, it may just be a room or a small sized-apartment but not a big condo or a landed and then stay alone….

If your targeted tenant is from mainland side, then rest assured, they will stay at where they stay most probably. They really do not need to spend extra just to stay closer to the factory by 10-20 minutes? In fact, some of these potential employees may already be staying and working in the mainland side and the factory they are working could even be nearby Simmtech too.

If your targeted tenant is from out of Penang, then you need to know who are these people and target them accordingly yeah. Most probably, they will ask their colleagues for some tips on where to stay, so you should have friends working in Simmtech so that you also have this opportunity and advantage. Hope I have answered a short question but some careful considerations.

If we are buying to wait for capital appreciation, then we will need to look at the overall scene and must not just rely on one factory called Simmtech yeah. Happy deciding.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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