Authorities have observed that compliance failures are leading to guidance value depreciation in older industrial estates, where regulatory upkeep has not kept pace with evolving standards. Many aging industrial clusters suffer from issues like non-adherence to updated fire safety codes, outdated environmental clearances, and unauthorized land use changes. As a result, these areas are increasingly being assigned lower guidance values compared to newer, compliant industrial parks. The move reflects an effort to align land valuations with operational and legal realities rather than mere historical significance. It also signals a warning to developers and industrial associations to prioritize compliance or risk asset devaluation.

The depreciation process typically follows detailed audits assessing factors such as adherence to zoning regulations, structural safety, pollution control, and worker welfare norms. Estates found deficient in these areas are marked as higher-risk zones, reducing their attractiveness to new investors and industrial tenants. Buyers now factor regulatory risks heavily into pricing negotiations, further reinforcing downward pressure on non-compliant properties. Local governments are using this depreciation mechanism as both a corrective and preventive tool to drive improvements. Only estates undertaking active compliance upgrades will be eligible for future guidance value revisions or incentive schemes.

This shift highlights a broader market evolution where regulatory compliance is directly tied to asset valuation and industrial viability. Older estates that invest in modernization—upgrading infrastructure, securing new certifications, and enforcing zoning discipline—can still recover lost value and attract new investments. Conversely, neglecting compliance is no longer just a legal risk but a direct financial disadvantage. Policymakers hope this strategy will catalyze the rejuvenation of aging industrial areas, boosting their competitiveness in a rapidly modernizing economy. Integrating compliance health into land valuation is now central to fostering sustainable, future-ready industrial growth across regions.