Eastern Seaboard leads growth in industrial estate market
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The industrial-estate market in Thailand has witnessed continuous growth since the devastating floods in 2011, especially in the Eastern Seaboard area, according to a report by Colliers International Thailand.
About 5,800 rai (928 hectares) of land were added in the first half of this year, said Surachet Kongcheep, associate director of the property consultancy’s research department.
In addition, there are many other industrial estates with a total area of more than 10,000 rai which are under development and expected to be ready in the second half.
Most of the additions to industrial estates made in the past few years and in the first six months of 2013 are located in the Eastern Seaboard area.
The overall supply of industrial estates in Thailand is about 156,900 rai from 70 estates, with the Eastern Seaboard and Central region accounting for around 95 per cent of the total.
More than 108,900 rai, or around 69 per cent, is in the Eastern Seaboard, and this has continued to rise, especially after the floods in the Central region in the fourth quarter of 2011.
More than 8,000 rai were added to the market last year and in the first half of 2013 and, in addition, some industrial estates are planned for development in the Southern Seaboard and neighbouring provinces, he said.
A combined area of around 98,000 rai has received approval from the Industrial Estate Authority of Thailand (IEAT) and/or the Board of Investment (BoI) to be developed as industrial estates or as potential future projects by the government and private sectors.
The Southern Seaboard shows the largest increase with more than 38,800 rai, followed by the Eastern Seaboard with about 21,300 rai. This discrepancy is due to the fact that some planned industrial estates in the Southern Seaboard are larger than 20,000 rai.
The IEAT also plans to develop new estates in many provinces, Surachet said, adding, “some of them are already under study and decisions should be made this year on the actual locations and total land areas.
“The IEAT is focusing more on the provinces which are on the borders, such as Kanchanaburi, to support the Dawei project [in Myanmar], and Chiang Khong in Chiang Rai province, to support import and export from and to China via the R3A road and to Laos via the new Friendship Bridge.”
In addition, the IEAT is focusing more on the area along the East-West Economic Corridor, starting at Mae Sot in Tak, and including Khon Kaen, Mukdahan and five other provinces along this route.
The agency also welcomes private firms who want to invest in ventures with the IEAT to develop industrial estates for small and medium-sized enterprises in the North, Northeast and Central regions, Surachet said.
The average occupancy rate in the Central region is the highest at about 90 per cent, followed by the Eastern Seaboard at around 86 per cent.
Most of the new industrial estates and newly expanded areas are in the Eastern Seaboard, and most investors are still focusing on this area, with the average occupancy rate in the first half higher than the same period last year.
“Most Thai and foreign investors are still confident in Thailand, so the average occupancy rate in all locations rose,” Surachet added.
FDI pours in
Total foreign direct investment (FDI) in Thailand last year was the highest in the past 10 years, at more than Bt980 billion. Although it was only Bt338 billion in the first half of the year, it was significantly higher in the second period.
The more than Bt450 billion in the first six months of this year was about 33 per cent higher than the same period last year, so the BoI forecasts that full-year FDI will be similar to or higher than that of last year.
Implementation of the Asean Economic Community in 2015 is the other main factor attracting foreign investors.
“The AEC in 2015 is another factor that will boost FDI in Thailand, as many foreign investors are looking for a manufacturing base with good facilities and logistics systems. This is especially true of investors or firms who need privileges when they export their products to other countries in Asean,” Surachet said.
The Japanese remain by far the biggest foreign investors in Thailand. From January to June, Japanese investors received promotional certificates for a total of 383 projects from the BoI with a combined investment value of Bt21.7 billion, representing around 28 per cent of the total foreign investment in the period.
The Cabinet has approved a proposal to create a special economic zone in Tak’s Mae Sot district. This will include an industrial zone, residential zone and logistics centre, as well as new infrastructure.
In addition, Surachet said there are plans to develop other border provinces as special economic zones, such as Chiang Saen and Chiang Khong in Chiang Rai; Kanchanaburi; Songkhla and Yala; and Nong Khai, Nakhon Phanom and Mukdahan.
