Industrial Land Sales Down 3.86% in 9 Months
Ms. Somjin Piluk, Governor of the Industrial Estate Authority of Thailand (IEAT) revealed that in the first three quarters of the fiscal year 2020 (October 2019 - June 2020), the IEAT recorded sales/rentals of industrial estate land totaling 1,696.92 rai, a slight decrease of 3.86% from the same period last year. This decline is expected to be a result of the COVID-19 pandemic, which has hindered investors from visiting sites and conducting business negotiations necessary for deciding to reserve/purchase/rent land in industrial estates, both in joint venture estates and those operated by the IEAT itself. In the Eastern Economic Corridor (EEC), sales/rentals amounted to 1,598.95 rai, while outside the EEC, it was 97.97 rai, with 114 new factories starting operations, creating 12,019 jobs.
At the same time, Thailand has benefited from the trade war between the United States and China, prompting some investors from China and Taiwan to relocate their production bases to Thailand, most of whom had already signed rental agreements prior. Additionally, the ranking by U.S. News & World Report, which placed Thailand as the number one country in the world for starting a business out of 73 countries, demonstrates that industrial estates in Thailand are significant manufacturing bases. An examination of land use permits in industrial estates revealed that early in 2020, investors gradually submitted applications for land use in industrial estates, resulting in increased employment in these areas.
“Although the COVID-19 pandemic has impacted the global economy, including Thailand, the establishment of industrial estates has not come to a halt. In early 2020, four joint operation contracts were signed, and two areas were officially declared as industrial zones in the Royal Gazette: 1. Pinthong Industrial Estate Project 6 in Pluak Daeng, Ban Khai, and Nikhom Phatthana districts of Rayong, covering approximately 1,322.40 rai with an investment value of about 2,625.78 million baht, and 2. World Food Valley Thailand in Chaiyo district, Ang Thong province, covering approximately 1,398.04 rai with an investment value of about 4,237.17 million baht.
Moreover, there are two industrial estates currently in the process of being declared as industrial zones: 1. Rojana Chonburi 2 (Khao Kanthong) covering approximately 902.59 rai with an investment value of about 2,100 million baht, and 2. Asia Clean Industrial Park covering approximately 1,319.89 rai with an investment value of about 2,447.75 million baht. This results in a total accumulated area of industrial estates of approximately 177,261 rai, divided into areas operated by the IEAT (approximately 39,332 rai) and joint venture industrial estates (approximately 137,929 rai). The area available for sale and rental is approximately 114,852 rai, with about 92,019 rai already sold/rented, leaving approximately 22,833 rai still available. The accumulated investment value is approximately 4.02 trillion baht, with around 6,112 factories in industrial estates and a total employment of approximately 515,962 people.
The top five industrial sectors are: 1) Automotive and transportation industry 16.84%, 2) Steel and metal products industry 11.37%, 3) Engine, machinery, and parts industry 9.79%, 4) Rubber, plastic, and synthetic leather industry 8.32%, and 5) Electrical appliances, electronics, and scientific instruments industry 7.89%. Investors from Japan continue to show the most interest, accounting for 28%, followed by investors from China at 17%, Taiwan at 9%, Australia at 6%, and Hong Kong at 6%,” said Ms. Somjin Piluk.
Regarding the overall investment in industrial estates under the supervision of the IEAT, including both estates operated by the IEAT and joint venture estates, there are currently 61 estates and one industrial port across 17 provinces, with 14 estates operated by the IEAT and 47 joint venture estates.
“As the government begins to ease lockdown measures, it sends a positive signal for new investments after a period of hesitation from investors. The IEAT sees this opportunity to revitalize various crises by promoting sales/rentals of land in industrial estates to attract investors to increase their investments in these areas. Each promotion will depend on the specific industrial estate, which not only aims to encourage increased investment but also alleviates the difficulties faced by existing operators in industrial estates, serving as a crucial mechanism to strengthen the country's economy,” concluded the Governor of the IEAT.
