Nexus has surveyed the overall industrial space market for the past year 2562 (2019) and found a continuous growth trend, driven by government initiatives. Additionally, the Eastern Economic Corridor (EEC) project has become clearer in terms of area, benefits, and infrastructure progress, leading to ongoing land transactions in industrial zones, including a significant deal from Alibaba worth over 3 billion baht at the end of the year, which has invigorated the market.

         

        Mr. Teerawit Limthongsakul, Managing Director of Nexus Real Estate Advisory Co., Ltd., discussed the overall industrial space market in leading areas, including the northern and eastern parts of Bangkok and the Eastern Seaboard. He noted that industrial estate land has shown continuous growth, with approximately 168,000 rai of land available for sale in leading industrial estates, of which over 87% has already been sold. The average selling price is around 5.7 million baht per rai, increasing by an average of 9% per year, with Chonburi province having the highest land sale price in industrial estates at approximately 11 million baht per rai.

      In the ready-to-rent factory market, covering the northern and eastern parts of Bangkok and the Eastern Seaboard, there is a total of about 2.5 million square meters of ready-to-rent factory space, with an average occupancy rate of 77%. The rental price has slightly increased, averaging 205 baht per square meter per month. However, it is expected that the rental space will increase slightly in line with market trends and clearer infrastructure developments, along with expected rental price increases.

        The ready-to-rent warehouse market in industrial estates is showing increasing demand, partly due to the growth of E-Commerce businesses, which has significantly boosted the rental warehouse sector. There is a high demand for warehouse space for storing, sorting, and distributing various products to consumers both domestically and internationally. Currently, the total area of ready-to-rent warehouses is approximately 4 million square meters, an increase of about 2% from the same period last year, with an occupancy rate of about 90% and an average rental price of approximately 160 baht per square meter per month.

        It was found that foreign investment continues to flow in; however, due to global economic volatility in 2562 (2019) and the continuously strengthening baht, foreign investment was not very high last year. This has also impacted some businesses, particularly in the export sector, such as the automotive industry, where some companies have decided to reduce production in Thailand due to higher costs, such as Mazda moving some production back to Japan. Nevertheless, Japan remains the country with the highest number of projects applying for promotion in the EEC, totaling 167 projects, accounting for 24% of all foreign investment projects, with an investment value of 59,187 million baht, representing 29% of the total foreign investment value applied for promotion.

 

In 2563 (2020), it is anticipated that the industrial space market will continue to show positive trends, driven by government support for the EEC project and clearer infrastructure developments. However, investors must closely monitor the global economic situation and the expected continued strengthening of the baht, Mr. Teerawit concluded.

 

Information from Nexus Real Estate Advisory