For the same logistics center: clean land, a leased industrial park plot, or buying an old warehouse?

An investor can receive three very different quotes for the same goal of building a logistics center: developing a site with no infrastructure, leasing land in an industrial park, or buying an operating facility. Comparing price per square meter is a starting point but not enough to choose. What must be compared is the date the project starts earning revenue, the capital tied up, and the risk still outside the quote.

Greenfield: land price is only the first line of the estimate

A new site can allow the layout to follow the desired truck flows and operating process. In return, the project owner must quantify preparation costs, compensation and site clearance if any, surveys, grading, off-site infrastructure connections, consulting and procedures. When any of these slips, inflows shift to the right while the cost of capital keeps running. The comparison table must show upfront costs and preparation time separately, not merge them into a single "investment cost/m²".

Land in an industrial park: pay upfront for readiness, but read the contract

Industrial park options are often attractive because some shared infrastructure already exists. But prepaid rent, periodic infrastructure fees, connection conditions, remaining lease term and permitted-use restrictions must all go into the same financial model. Infrastructure at the fence does not mean the connection points, power capacity, drainage or container truck roads suit a specific project.

Brownfield: a lump-sum purchase price does not mean cheap refurbishment

An existing warehouse or project offers a chance to save time, but the land-use right documents, ground and structural quality, power supply, drainage, fire protection, dock capacity and expansion potential need independent checking. If the purchase price already includes the warehouse or equipment, the estimate must not add the full construction or equipment cost again. Conversely, the work needing repair and the downtime must be recorded as costs, not hidden under a "general contingency" line.

The comparison table needs a common end point

The three options should only be compared after agreeing on the same design capacity, leasable area or number of pallet positions, technical standards, occupancy rate and operating period. The cash flow table should show year-0 capital, capital by preparation schedule, periodic land fees, upgrade costs, the year revenue begins, NPV at the same discount rate, and IRR if the cash flow yields a well-defined one. Then test scenarios: a one-year delay, higher refurbishment costs and lower-than-expected occupancy. The option with the lowest purchase price may no longer be the one with the best present value.

What deliverables should the project owner require? A table of sourced assumptions, a risk matrix for each land source and three editable cash flows. CGD's logistics budget estimate tool supports initial screening; investment decisions still require legal due diligence, technical surveys and a separate quotation.

Try it now with your project