Recovery of exports spurs demand for logistics properties
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Robust demand in the wake of the recovery of the export sector has aroused the interest of local investors in logistics properties, says real-estate consultancy Knight Frank.
Marcus Burtenshaw, executive director and head of commercial agency, Knight Frank Chartered (Thailand), said the company had seen a number of new projects enter the planning stage as a result of this interest.
An influx of supply has caused average occupancy rates to fall, yet the market has been quick to absorb new supply in recent quarters, he said, adding that the company expects this new supply to continue to be taken up quickly as demand for warehousing space grows.
According to Knight Frank Thailand Research, the total supply of warehouses for rent in the final quarter of last year was 2,907,907 square metres, an increase of 5.86 per cent from the prior quarter and a year-on-year rise of 21.95 per cent.
The occupancy rate in the warehouse rental market was 93.13 per cent, a quarter-on quarter drop of 0.31 per cent, due to an increase in supply.
However, during the fourth quarter of 2012, the total amount of space occupied increased by 141,462 square metres, indicating positive net absorption amidst robust demand for warehousing space, particularly in Samut Prakan and along the Eastern Seaboard.
“Samut Prakan currently houses the majority of Thailand’s warehousing supply. Its location just outside of Bangkok allows convenient access to several industrial estates.
Also, it is situated between two major seaports, and is home to the international airport.
“Despite the concentration of supply in this province, I suspect that the Eastern Seaboard will see the most new supply over the coming few years, as new logistics parks in Rayong and Chon Buri complete,” said Burtenshaw.
Warehouse rental rates vary depending on building age, specifications, condition and location. Most of the prime warehouses are modern distribution centres, offering raised floors, docks, and ceilings of at least 10 metres in height, he said.
