Scenario: a foreign investor needs production running in six months. Leasing land and building takes eighteen. The ready-built factory next door is available now — at a rent that, over twenty years, costs double the land-lease-and-build option. Speed has a price; the question is whether the business case pays it.
Ready-built factories: speed at a premium
Ready-built factories offer immediate occupancy — typically weeks from contract to production — with average rents around 5 USD per square meter per month (Q2 2026, CBRE via SSI Research). The advantages: minimal upfront capital, no construction risk, and flexibility to expand or relocate at lease renewal. The costs: higher lifetime cost for long horizons, standardized designs that may not fit specialized processes, and dependence on the developer’s maintenance.
Best for: small and medium FDI, pilot production, fast market entry, and uncertain long-term scale.
Leasing land and self-building: control at a lower lifetime cost
Leasing industrial land (around 143 USD per square meter per lease term in the North, 185 in the South, Q2 2026) and building custom facilities gives full design control — clean rooms, heavy floor loads, specialized utilities — and a lower total cost over long horizons. The costs: 12–24 months to production, construction risk and capital lock-up, and responsibility for maintenance. The land lease itself is typically a multi-decade term, matching long investment horizons.
Best for: large-scale FDI, specialized manufacturing processes, and horizons beyond ten years.
The cost comparison: model it, don’t guess
Build the comparison over the realistic horizon: ready-built rent escalated annually versus land rent plus amortized construction plus maintenance. Include the soft costs from the earlier article in this series — management fees, wastewater, connections — which differ between the two options. And price the option value: the ready-built factory preserves the option to scale up, down or exit; the self-built plant commits capital but creates an asset. For horizons under five years, ready-built usually wins; beyond ten, self-build usually wins; between five and ten, the process requirements decide.
The hybrid strategy most investors actually use
In practice, many investors blend the two options across phases. Phase one: lease ready-built space for fast market entry and demand validation, typically on a three-to-five-year term. Phase two: once volume is proven, lease land and build the custom plant — sometimes in the same park, keeping the ready-built unit as overflow or warehouse space. This hybrid captures speed without surrendering the long-term cost advantage, and it de-risks the construction decision with real operating data. When negotiating the phase-one lease, secure expansion rights or first refusal on adjacent land for phase two.
Frequently asked questions
1. What do ready-built factories cost?
Around 5 USD/m²/month on average (Q2 2026) — verify per park.
2. How long does self-building take?
Typically 12–24 months from land handover to production.
3. Which is cheaper long-term?
Usually self-build beyond ten years; ready-built under five.
4. Can we start ready-built then build our own?
Yes — a common two-phase strategy: fast entry, then custom plant.
5. Do specialized processes fit ready-built?
Often not — clean rooms and heavy loads usually need custom builds.
This article has been quality-reviewed by the FLAW AI Legal Council
