year end 2010 | industrialthaIlandIndustrIal EstatEMarkEt rEPOrt                                             Industrial Es...
thailand industrial estate Market rePOrt | 2H 2010InduStRIal ZonIng                                                       ...
thailand industrial estate Market rePOrt | 2H 2010                                                                       S...
thailand industrial estate Market rePOrt | 2H 2010                                                           futuRe Supply...
thailand industrial estate Market rePOrt | 2H 2010demand dRIveRSfoReIgn dIReCt InveStment (fdI)                           ...
thailand industrial estate Market rePOrt | 2H 2010InveStment by boI Zone                                            InveSt...
thailand industrial estate Market rePOrt | 2H 2010                                             new faCtoRy peRmItted duRIn...
thailand industrial estate Market rePOrt | 2H 2010                        the pRopoRtIon of InveStoRS In InduStRIal eState...
thailand industrial estate Market rePOrt | 2H 2010launCheS wIth hIgh take up RateS In q4 2010the developer of rBFs buys la...
thailand industrial estate Market rePOrt | 2H 2010CollIeRS InteRnatIonal thaIlandmanagement team                          ...
Upcoming SlideShare
Loading in …5
×

Thailand Industrial Estate Market Report H2 2010

1,619 views

Published on

The year 2010 heralded the biggest increase in supply of Serviced Industrial Land Plots (SILPs) for thirteen years reflecting the underlying long term confidence in the manufacturing sector despite ongoing political unrest over the past four years.
The Eastern Seaboard is the dominant player in the industrial estate market with around 63% of total supply of land in SILPs.
The Map Ta Phut situation has been largely resolved but question marks remain as to Thailand’s future for heavy industry.

Published in: Real Estate
  • Be the first to comment

  • Be the first to like this

Thailand Industrial Estate Market Report H2 2010

  1. 1. year end 2010 | industrialthaIlandIndustrIal EstatEMarkEt rEPOrt Industrial Estate Market exeCutIve SummaRy the year 2010 heralded the biggest increase in supply of serviced Industrial land Plots (sIlPs) for thirteen years reflecting the underlying long term confidence in the manufacturing sector despite ongoing political unrest over the past four years. the Eastern seaboard is the dominant player in the industrial estate market with around 63% of total supply of land in sIlPs. maRket IndICatoRS the Map ta Phut situation has been largely resolved but question marks remain as to thailand’s future for heavy industry. 2009 - 2010 Supply demand pRICe oCCupanCy ConveRSIon table 1 RaI = 1,600 Sq m 1 heCtaRe = 6.25 RaI 1 aCRe = 2.53 RaI 1 RaI = 400 Sq wahwww.colliers.co.th
  2. 2. thailand industrial estate Market rePOrt | 2H 2010InduStRIal ZonIng topography for industrial development. the proximity to China could show greater promise with the ever increasing trade between the two countries.Colliers International thailand has divided the industrial estate marketinto five main zones in thailand. these are as follows. Central area – another key industrial area due to its proximity to Bangkok.Eastern seaboard area – this represents the industrial powerhouse dueto its location surrounding the main container port in thailand, laem southern seaboard area – an under developed industrial area cateringChabang and its proximity to the Bangkok metropolis. Further growth mainly to the Malaysian market with halal produce as well as heavyhas come about due to suppliers clustering around large industrial projects based on oil.manufacturers. this report is concerned predominantly with sIlPs but it must be stated that a considerable number of stand alone factories exist outside of thenorth Eastern area – the remoteness of this area and poor transportation industrial estates.means that the area is a bit player in the industrial scene. the borderwith Cambodia and laos (leading to Vietnam) could provide limitedpotential for the future.northern area – limited industrial activity takes place here due to itsremote location and is predominantly an agricultural area with a difficultSupply hIStoRICal Supply SIlpS source: Colliers International thailand researchthe total supply of sIlPs increased from 118,500 to about 119,600 rais in supply was limited until 2009 with a robust increase despite the globalin H2 2010. this increase occurred in the Central area, and the dominant economic downturn. Growth for the first half of 2010 even outstrippedEastern seaboard area. the year 1996 heralded the highest increase of the whole of 2009.sIlPs, but the asian Financial Crisis put an end to this surge and growthCOLLIERS INTERNATIONAL | P. 2
  3. 3. thailand industrial estate Market rePOrt | 2H 2010 Supply by Zone source: Industrial Estate authority of thailand, Board of Investment (BOI) and Colliers International thailand researchthe total supply at the end of the second half of 2010 was around 119,600 area has nearly 645 rais which is the lowest supply with just around 1%rais. the supply in the Eastern seaboard area dominates the thai market, of the total market.accounting for nearly two-thirds of total supply. the southern seaboard new Supply of InduStRIal land plotS by loCatIon, h2 2010 source: Industrial Estate authority of thailand, Board of Investment (BOI) and Colliers International thailand researchthe new supply added in H2 2010 was just approximately 1,500 rais the Central area, further consolidating the dominance of these twofrom two main regions; 17% from Eastern seaboard area and 83% for areas. COLLIERS INTERNATIONAL | P. 3
  4. 4. thailand industrial estate Market rePOrt | 2H 2010 futuRe Supply 2011 - 2012 source : Colliers International thailand researchMore than 23,000 rais were launched in 2010 and scheduled to be the northern area on the back of the prospect of increasing trade withcompleted by 2012 with 81% from the total located in the Eastern China.seaboard area and 12% in the Central area. some growth is expected indemand take up Rate, duRIng 2008 – 2010 source: Colliers International thailand researchtake up has actually increased in every zone from 2008 except for the limited supply in this area any change can have dramatic consequencesnorth Eastern area. this was due to a number of companies shutting on the numbers both positively and negatively.down or merging operations in the suranee Industrial Zone. HavingCOLLIERS INTERNATIONAL | P. 4
  5. 5. thailand industrial estate Market rePOrt | 2H 2010demand dRIveRSfoReIgn dIReCt InveStment (fdI) foReIgn dIReCt InveStment peR half yeaR source : Board of Investment (BOI) and Colliers International thailand researchthe global economic downturn severely curtailed foreign investment FdI for H2 2010 still falls behind the 2006-8 period due to the concernsinto thailand not helped by the airport blockade at the end of 2008 and regarding sustained global growth as well as domestic issues. However,rioting in april 2009. However FdI has started to return to the country there was a slight increase from H2 compared to H1 2010 which wasas the main investor countries began to recover and capital began to affected by rioting in May 2010 but had very little direct impact on theflow once again. industrial base. manufaCtuRIng expoRtS mInuS goldthe export of gold is included in manufacturing exportfigures. Gold has little industrial use and is more astore of value and an investment. during periods ofturbulence and loss of confidence in the financialsystem gold is seen as being a better store of valuecompared with that of fiat currency not backed up byprecious metals. this is especially the case recentlywith quantative easing occurring in a number ofcountries, especially the united states. at these timestrading in gold usually increases but is no realindicator of manufacturing as none is performed.therefore the figures given have the numbers for goldexports taken out as it can have a large effect on thestatistics and unlike trade in general can fluctuatewildly month to month.Exports surged in Q3 2010 on the back of renewedeconomic confidence but fell back sharply in the last Colliers International thailand researchquarter. thailand is dependant on exports where the source: Bank of thailand and Customs departmentfinal destinations are the more developed countrieswhich are still experiencing difficult headwinds in thewake of high levels of government debt. COLLIERS INTERNATIONAL | P. 5
  6. 6. thailand industrial estate Market rePOrt | 2H 2010InveStment by boI Zone InveStment - boI CeRtIfICateS ISSued 2010 by InveStment source : Board of Investment and Colliers International thailand researchthe BOI divides thailand into three zones based on the level of economic While zone 2 commands the lion’s share of investment it is interesting todevelopment. the zones provide the basis for the various incentives note the paucity of outlay being provided to the poorest 22 provinces ofprovided for investors with the poorer zones being offered longer tax zone 3. In fact the population of these 22 provinces is greater than thatbreaks for example. Zone 1 consists of Bangkok and the neighbouring of the whole of zone 2, therefore on a per capita basis the gulf is evenprovinces; zone 2 is where most of the industrial estates are located starker.such as Chonburi and rayong. Zone 3 covers the poorer provinces andis further subdivided according to the level of development. manufaCtuRIng pRoduCtIon Index by month source : Bank of thailand and Colliers International thailand researchthe Manufacturing Production Index indicates the volume of production recover from the severe downturn. It would seem that domestic demandand the overall health of industry. Over the course of the past two years would account for a significant share of this growth in the first half ofthere has been an erratic rise as the overall global economy started to 2009 due to weak export numbers.COLLIERS INTERNATIONAL | P. 6
  7. 7. thailand industrial estate Market rePOrt | 2H 2010 new faCtoRy peRmItted duRIng the peRIod 2003- 2010 source : department of Industrial Works and Colliers International thailand researchthe beginning of the political troubles in 2005 spelled the decline in new factories for the rest of the decade. new faCtoRy peRmItted duRIng JanuaRy 2009 – deC 2010 source : department of Industrial Works and Colliers International thailand researchthe growth of demand for new factories has remained stable over the investors simply ride these out. It is also the case that negative eventscourse of the past two years. What this seems to indicate is that the often have very little direct impact on the manufacturing process andrebound in industrial growth has come about from existing businesses only affect overall sentiment. that aside, new entrants are likely to be farrather than the entry of new ones into the market. Established players more cautious in making such a long term move during a period ofknow the thailand market well and are relatively unfazed by the trails conflict. as asEan further integrates, this could be damaging during aand tribulations of thai politics. also industrial decision making is very protracted spell of instability in thailand as new players seek to enter thelong term, involving the slow and solid build up of a supplier base plus a market.knowledgeable workforce and investors will not pull out due to sporadicproblems. Many countries have their ups and downs and long term COLLIERS INTERNATIONAL | P. 7
  8. 8. thailand industrial estate Market rePOrt | 2H 2010 the pRopoRtIon of InveStoRS In InduStRIal eStateS h2 2010 by appRoved RegISteRed CapItalthe Japanese are the largest investors in thailand with approximately41% followed by asEan and Europe with 28% and 18% respectively.While north america and australia have some share other parts of theworld have very limited manufacturing facilities here.For 2010, Japanese investors received promotion certificates for a totalof 337 projects from the BOI with a total value of 110.7 billion baht,representing around 39% of total foreign investment for that year. source : Industrial Estate authority of thailand and Colliers International thailand researchland pRICeS source : Colliers International thailand researchthe location of industrial estates or industrial parks is based on factors industrial estates being located close to Bangkok while others, mostlysuch as land selling price, proximity to transportation facilities, pulp and paper manufacturers, are located further away from the capital.infrastructure and a supplier base. the concept of clusters is an important Provinces such as songkhla and saraburi have much cheaper landfactor for locating a factory. samut Prakarn commands the highest land prices due to their location far from Bangkok or port facilities.prices due to its proximity to Bangkok and the international airport. thewide variation of prices in Chachoengsao province is due to a number ofCOLLIERS INTERNATIONAL | P. 8
  9. 9. thailand industrial estate Market rePOrt | 2H 2010launCheS wIth hIgh take up RateS In q4 2010the developer of rBFs buys land usually in the area of an industrial tenants rent warehouse space for logistics as opposed to pure storage.estate or industrial park and builds factory buildings for lease or sale. the European strength in this field can be partly explained by the numberareas range from 1,000 – 6,000 sq m and are built to international of European dominated retailers such as tesco and Big C.standards. tICOn is the biggest developer in this business; they havemany factories and warehouses in thailand. Other developers include although the occupancy rate in rBFs and warehouses decreasedtFd and industrial estate developers such as amata, Pinthong and approximately 9% from 2009 in both types, thailand is still a strongHemaraj, although this group develops factories only in their own location for manufacturing, so tICOn continues to develop ready builtindustrial estates. factories and logistics warehouses for rent and sale in the long term.all of the ready built factories are located in large industrial estates and heavy InduStRyindustrial parks in the Central area and Eastern seaboard area, such asHi – tech, rojana, Bangpa – In, Bangpoo, amata nakorn, amata City, While the Map ta Phut situation has largely been resolved with the vastlaem Chabang, Pinthong. majority of projects given the green light there are still long term concerns regarding the future of heavy industry projects such as steel,a large number of tenants in the ready built factories are for Japanese refining and petrochemicals. the Map ta Phut zone is fast filling up andwith nearly 63% followed by Europe and Canada with 12.2% and 7.8% there is limited space for further development. there are currently norespectively. Most of the industrial factories are for the electronic / firm plans for opening up any other zone to heavy industry despite theelectrical industries with just over half and about 20% are for the auto southern seaboard being mooted. Currently interest in furtherparts industry. development is outside of the country with interest in both Myanmar and Cambodia as alternative locations. the new dawei deep water seaportwaRehouSeS and industrial zone in Myanmar has attracted considerable interest from thai companies including a contract given to Italian-thai development toWarehouses are in locations that support distribution such as Bangna – develop the area.trad road, laem Chabang, ayutthaya province and saraburi province.Europeans rent the most warehouse space with 30% of the total followedby Japanese and australians with 24% and 17% respectively. 48% of COLLIERS INTERNATIONAL | P. 9
  10. 10. thailand industrial estate Market rePOrt | 2H 2010CollIeRS InteRnatIonal thaIlandmanagement team 480 offices in 61 countries on 6 continentsOFFICE & IndustrIal sErVICEs united states: 135 • the third largest commercialnarumon rodsiravoraphat | senior Manager real estate services company Canada: 39 in the world latin america: 17PrOJECt salEs & MarkEtInG • the second most recognised asia Pacific: 194Monchai Orawongpaisan | senior Manager commercial real estate brand EMEa: 95 globallyrEsIdEntIal salEs & lEasInG • us$2 billion in annual revenuesupatra Buranatham | Consultant • Over 2 billion square feet under managementrEtaIl sErVICEs • Over 15,000 professionalsasharawan Wachananont | senior ManageradVIsOrY sErVICEsnapatr tienchutima | associate directorrEal EstatE ManaGEMEnt sErVICEs COlliers internatiOnal thailand:Bandid Chayintu | associate director Bangkok Office 17/F Ploenchit Center,adVIsOrY sErVICEs | HOsPItalItY 2 sukhumvit road, klongtoey,Jean Marc Garret | director Bangkok 10110 thailand tel +662 656 7000InVEstMEnt sErVICEs fax +662 656 7111nukarn suwatikul | associate director emaIl info.th@colliers.comWasan rattanakijjanukul | senior Manager Pattaya Office 519/4-5, Pattaya second road (Opposite Central FestivalrEsEarCH Pattaya Beach), nongprue, Banglamung, Chonburi 20150antony Picon | associate director tel +6638 427 771surachet kongcheep | senior Manager fax +6638 427 772 emaIl info.pattaya@colliers.comValuatIOn & adVIsOrY sErVICEsnicholas Brown | associate directorPhachsanun Phormthananunta | associate directorsantipong kreemaha | senior ManagerWanida suksuwan | ManagerPattaYa OFFICEMark Bowling | senior sales Managersupannee starojitski | senior Business development ReSeaRCheR: ReSeaRCheR:Manager / Office Manager thailand thailand antony Picon surachet kongcheep associate director | research senior Manager | research emaIl antony.picon@colliers.com emaIl surachet.kongcheep@colliers.com this report and other research materials may be found on our website at www.colliers.co.th. Questions related to information herein should be directed to the research department at the number indicated above. this document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies. accelerating success.www.colliers.co.th

×