Finschool By 5paisa

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While greenfield investing refers to any case in which new facilities are added to previously vacant land, brownfield investing deals with the utilization of previously built facilities that were once used for another purpose. When a business or governmental organization buys or rents pre-existing manufacturing facilities in order to start a new industrial activity, this is referred to as a brownfield (also known as “brown-field”) investment. 

A greenfield investment, in which a new plant is built, is an alternative to this. The fact that the structures are already built is unquestionably a benefit of a brownfield investment plan. As a result, starting up costs and time may be considerably reduced, and the structures would already be code compliant. However, brownfield site may have been left underused or abandoned for a valid reason, such as pollution, contaminated soil, or the presence of hazardous items.

Both the purchase and the leasing of existing facilities are covered under brownfield investing. This strategy might be advantageous in some cases because the building is already there. It can save the investing company money, but it can also save some of the processes involved in constructing new buildings on undeveloped land, such as obtaining building permits and establishing utility connections. Brownfields are areas of land that may have been contaminated by previous occupants’ activities; one result of this contamination may be the absence of vegetation on the location. Mothballed brownfields are those where the owner has no plans to permit further use of the unoccupied, brownfield land.

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