Thailand’s poor export performance during the first half of 2015 reflected the global economic slowdown and directly affected all manufacturing bases in the country, with less new land being occupied during the period.
According to the latest research on the sector by Colliers International Thailand, many factories that were manufacturing for export or ordering from foreign countries have shut their systems due to fewer orders, especially SMEs.
Most industrial estate developers also postponed the launching of their new phases or new projects in during the first six months of the year, although most industrial estate developers in are still maintaining their existing sales target for the year.
According to the real estate firm, only 1,000 rai of land plots were sold in the first half 2015, and most were in the Eastern Seaboard Area.
It said that most developers had a tough time in the first half of 2015, and many foreign investors postponed their investment in Thailand.
The average occupancy rate of all industrial estates in Thailand was approximately 89 percent, but while around 17,500 rai (2,800 ha) is still available in the industrial estate market there is room for growth in the future.
The Eastern Seaboard area is the most popular location for foreign investors in Thailand, noted Colliers, and automobile and its related industries are still the main players in the industrial estate market.
The average price for land in industrial estates during early 2015 was similar to that in 2014.
Many developers are planning to launch new industrial estates and industrial parks in the future, and some developers are preparing themselves for AEC which comes into being in December 2015 by starting to develop new phases of existing industrial estates or starting new industrial estates, especially in the Eastern Seaboard Area. However most are still waiting for a better economic situation and
Looking ahead, Colliers said that many logistics companies will explore opportunities in Thailand in 2015 and in the future, as Thailand benefits from being strategically positioned centrally within ASEAN for the logistics business.
Special economic zones in some border provinces such as Tak, Mukdaharn, Srakaew, Trad and Songkhla will be the main factors driving the industrial estate market in Thailand in the future, but there is still a long way to go.
Thailand is likely to continue its move towards high-technology manufacturing, replacing the labour-intensive manufacturing base due to higher labour costs compared with other countries in the region, is said.
To read the full Colliers Industrial Research Report for the first half of 2015 click here.
Image: A factory for sale through Colliers International Thailand in Latkrabang Industrial Estate, Board of Investment Zone I.
