JLL predicts that the total investment value in cold storage real estate will exceed $2 billion by the year 2030 due to increasing demand and investors in the cold storage business enhancing the value of properties through investments in technology and expertise in this asset class.

Cold storage remains a high-potential real estate investment for the long term in the Asia-Pacific region, thanks to its ability to provide stable returns and higher rental rates compared to other asset types. According to JLL (NYSE: JLL), investment in cold storage real estate in the Asia-Pacific is expected to surpass $2 billion before the year 2030, following a peak investment of $948 million in 2021. The growth in cold storage investment is supported by investors seeking to diversify their real estate portfolios and the increasing specificity of tenant demands for this type of property.


From now until 2030, JLL believes several factors will drive the recovery of investment in cold storage real estate after a slowdown in recent times, as cold storage is considered a less volatile investment compared to other real estate types. This is supported by the ongoing demand for cold storage facilities to store perishable goods such as food and pharmaceuticals. Additionally, higher rental rates compared to warehouses and general rental factories, along with relatively longer lease terms, will attract investors who recognize the potential of this asset class.

JLL's research reveals that in the past 12 months, transactions in cold storage investments have slowed down, mirroring trends in other types of investment real estate due to macroeconomic factors such as rising interest rates and financial costs. In 2021, the value of cold storage transactions in the Asia-Pacific surged, with an average value of $29.6 million per transaction, compared to an average of $19.1 million over the past decade. Furthermore, in 2021, there were as many as 32 large transactions, exceeding the average of 15 large transactions per year over the past decade. In 2022, the average transaction price was around $16.3 million.

Ben Horner, Senior Director for the Asia-Pacific region at JLL's Supply Chain and Logistics Services, stated, "The market for cold storage real estate investment has slowed since 2021, but that doesn't mean it can't reach new heights again. Various factors, from structural changes in consumption patterns to online trading and various macroeconomic variables, will stimulate continuous long-term growth in this real estate investment market. Investments in this asset class will come from a more specialized group of investors rather than general large investors."

Barriers to entry for new operators in the cold storage asset class have impacted investment activities in this real estate sector. However, it has also attracted more specialized investors and operators. JLL analyzes that general investors are increasingly aware that investing in cold storage real estate requires deep knowledge of temperature-controlled storage, logistics, and compliance with relevant regulations. Therefore, investors with expertise in the cold storage business have an advantage, while general investors may be inherently excluded.

Moreover, investment in technology is becoming increasingly important for cold storage businesses to meet tenant demands in terms of efficiency and to cope with global changes that lead to challenges and disruptions in supply chain management. Therefore, technology investment is something that investors interested in entering the cold storage rental business must consider. Modern technologies, such as automation, robotics, and energy efficiency control, play a crucial role in enhancing operational efficiency in cold storage and reducing costs for operators and tenants. All of this will enable cold storage businesses to better adapt to changes and benefit specialized investors.

Macroeconomic influences will also play a role in determining demand conditions for cold storage investment in the Asia-Pacific. The rapid growth of the middle-class population in this region, along with rapid economic growth and rising incomes, is expected to support an expansion in consumption levels. Between 2013 and 2022, private consumption in the Asia-Pacific grew at a compound annual growth rate of 4.1% and is expected to increase to 4.7% between 2023 and 2026.

Additionally, revenue from consumer goods deliveries to customers in Asia doubled between 2019 and 2022, rising from $92 billion in 2019 to $269 billion in 2022, and is expected to reach $453 billion by 2026, representing a compound annual growth rate of 19.1%. Meanwhile, the global 3PL market (third-party logistics providers) is estimated to be worth over $556 billion in 2022, with the Asia-Pacific market accounting for one-third of the global market value and expected to grow at a compound annual growth rate of 4.9% between 2023 and 2027, higher than the U.S. (2.1%) and Europe (2.2%).

In Thailand, the demand for cold storage is clearly increasing, primarily driven by the expansion of agricultural exports and processed agricultural products in the country. This growth is a result of changing consumer behaviors and the impact of global geopolitical conflicts affecting the supply chain.

Michael Glancy, Managing Director of JLL Thailand, stated, "The cold storage market in the Asia-Pacific is on the rise, supported by strong demographic and macroeconomic statistics. The demand for investment in cold storage assets is increasing, driven by the need for income-stable assets. Cold storage assets not only provide good financial returns but also help stabilize investment portfolios and enhance resilience to changes." He further added, "The future of cold storage assets depends on attracting specialized investors to revive investment and build a long-term future for this investment property. As Thailand's export sector continues to develop, cold storage that can provide comprehensive services to meet the diverse needs of customers will be essential and crucial for maintaining the quality of perishable goods exports and strengthening Thailand's position in the global market."

Currently, the cold storage business market in the country is largely operated by small and medium-sized enterprises (SMEs). According to the Department of Business Development (DBD), of the 193 registered cold storage companies in 2022, most are SMEs, with only 12 being large operators. This overall picture indicates sufficient opportunities for growth in this sector, especially for entities that can leverage new technological advancements and innovative business approaches. The financial strength of this sector is also evident from annual revenues reaching 18.3 billion baht in 2022. Additionally, the existing cold storage area in Thailand, estimated to be around 850,000 square meters in 2022, underscores current capacity and potential for expansion to meet increasing market demand.

Krit Pimthayawut, Head of Capital Markets for Thailand at JLL, stated, "The rapid development of Thailand's cold storage business reflects the ever-changing nature of Thailand's export market and the evolving demands in the global supply chain. In addition to expanding cold storage areas generally, the adoption of advanced technology to enhance cold storage efficiency is crucial for elevating Thailand's cold storage market and will be a key factor in keeping Thailand at the forefront of this important industry. The cold storage market in Thailand still has significant growth potential, especially for investors willing to innovate and adapt."