•Investor sentiment around the Thai industrial market is rebounding after the COVID-19 pandemic
•Demand is exceeding supply for Serviced Industrial Land Plots (SILPs), driving up rents and asking prices
•The logistics market continued to grow at a steady pace in Q1, with average land price increasing to THB6.79 million per Rai, up from THB6.58 million per Rai in Q4 2021.
Thailand’s logistics market continued to grow at a steady pace in 1Q 2022. Leasing activity in Ready Built Factories (RBFs), and Ready Built Warehouses (RBWs) remained active, driven by the growing demand for logistics property in the e-commerce sector. Total RBFs stock in Q1 2022 increased to 2.76 sq m or 0.05% q-o-q. The overall RBFs vacancy rate dropped to 10.18% from 11.44% in Q4 2021. Total RBWs stock was recorded at 4.15 million sq m, growing by 0.53% q-o-q. The overall RBWs vacancy rate edged down from 9.97% in Q4 2021 to 9.68% in 1Q 2022. Average asking rent for RBFs were recorded at THB187.0 per sq m per month, up by 1.82% q-o-q. Average asking rent for RBWs increased to THB153.0 per sq m per month, up by 0.97% q-o-q.
FIGURE 1: READY BUILT INDUSTRIAL MARKET
The industrial market recovered from last year, as Thailand remains a prime overseas factory base for foreign manufacturers. Total supply of Serviced Industrial Land Plots (SILPs) in Q1 2022 rose to 205,849 rai, growing by 3.26% q-o-q. The overall sales rate increased to 86.15%, up from 82.28% in Q4 2021. The average land price increased to THB6.79 million per Rai, up from THB6.58 million per Rai in Q4 2021.
FIGURE 2: SERVICED INDUSTRIAL LAND PLOT MARKET
Phongphan Phloiphet, Senior Manager, Logistics & Industrial, at Cushman & Wakefield, Thailand, said, “As we begin to move away from the COVID-19 pandemic, investor sentiment around the Thai industrial market is rebounding. Thailand’s favourable investment conditions, including access to good facilities, strong transport links, and a skilled labour force are drawing new investors from around the world and are incentivizing them to establish or expand operations in Thailand. We are beginning to see the impacts of this with demand exceeding supply for SILPs and subsequently increasing rents and asking prices.
“When considering ready-built warehouses, we are advising and assisting our clients with thorough due diligence and careful planning to ensure their preliminary needs are met. The same goes when examining land for development, with clarity being essential on preferred site layouts and features, land price, construction budget and overall timeframes, as the lack of existing supply may necessitate a flexible approach to site location.”
Cushman & Wakefield Thailand’s Logistics & Industrial department provides a wide array of services for investors, operators, and occupiers. We have vast local experience and knowledge that equips us to recommend what is the best approach for our clients:
• Brokerage Services – Site Acquisition & Disposal
• Tenant & Landlord Representation – Renewals, Reviews, New Contracts, Agreements, and Legal
• Coordination and Project Management
• Build-to-Suit Services
• Research and Commercial Advisory
• Market Analysis and Value Insights
• Supply Chain Consultancy
For further information, please contact Khun Phongphan Phloiphet (Den) via mobile +66806547959 or email: Phongphan.phl@cushwake.com
