Thailand ready-built warehouses increase by 6.3% in H2 2023

Total supply hit 5.7m sqm.

According to Knight Frank, Thailand's logistics property market showed signs of a slowdown in its growth trajectory during the second half of 2023, with 3PL and e-commerce sectors scaling back to align their operations with demand outlooks.

External factors such as the Red Sea conflict and other geopolitical tensions raise concerns for the global supply chain, and the magnitude of their impact on Thailand's logistics activities will likely be observed in 2024.

Here's more from Knight Frank:

The total supply of ready-built warehouses reached 5.70 million sq m, an increase of 169,000 sq m in warehouse space from the previous half-year. This addition represented growth of 3.1% HoH and 6.3% YoY. The new supply included KR Warehouse - Beung sub-district and Alpha Laemchabang in Chonburi, Fraser Bangna 2 in Chachoengsao, ESR Asia Suvarnabhumi in Samut Prakan, and Alpha Rangsit – Phaholyothin KM. 33 in Pathum Thani. The addition of supply also came from the expansion of existing projects like KR Warehouse – Bowin in Chonburi and RBF’s Buildwell in Pathum Thani.

Supply Distribution

The distribution of ready-built warehouses in Thailand is primarily concentrated in three key regions. The Bangkok Metropolitan Region (BMR) represents the largest sub-market, commanding a 45% share of the total market, with Samut Prakan holding the majority share within the BMR at 41%.

The Eastern Economic Corridor (EEC) stands as the second-largest sub-market, accounting for 38% of the overall warehouse supply. Among the EEC supply, Chonburi takes the lead with a 25% share, followed by Chachoengsao at 10%. In the Central region, Ayutthaya functions as a significant hub for domestic logistics, representing 13% of the country's speculative warehouse space, with Pathum Thani following at 4%. 

In the second half of 2023, there was a consistent rise in supply across the major sub-markets. The net leasable area in the BMR experienced a 1.0% HoH increase, reaching 2.52 million sq m. The EEC saw the most rapid expansion this half-year at 4.4%, reaching almost 2.16 million sq m. Finally, the Central region and others experienced robust supply growth of 3.8% HoH, totaling 944,700 sq m.

Future Supply

The total size of the lettable area expected to be completed in 2024 is 413,900 sq m, with 218,100 sq m in H1 and 195,800 sq m in H2. This new space is set to constitute 7% of the current supply. The EEC is poised to host around 70% of the upcoming supply, followed by the BMR, with a share of 25%. This trend underscores a shift towards the EEC, which could potentially impact the region's occupancy performance.