Active preleasing activity and a shortage of ready-built factories drive warehouse supply take-up

• Net absorption reached 145,000 sqm in Q3 2024, mainly due to completed pre-leased ready-built supply along with a built-to-suit warehouse completion in Lamphun by CP Future City.
• Warehouses in industrial zones continued to benefit from the shortage of ready-built factories. These spaces experienced increased demand for conversion into light manufacturing facilities, especially in the Eastern Economic Corridor.

Rapid market expansion continues with activity from new players

• In Q3 2024, seven new projects were completed, adding 160,000 sqm of supply to the market. Six of these were speculative developments by emerging players.
• The market vacancy rate remained steady at 11.0% in Q3 2024. Despite a large amount of speculative supply completions during the quarter, most were pre-leased, especially in the Eastern Economic Corridor submarket.

Intensifying market competition stabilises rents

• Prime warehouse rents averaged THB 159.7 per sqm, per month, a slight 0.23% increase q-o-q. Rents have been stable since early 2024, influenced by new and expanding players like ESR, Alpha and SCX entering the market.
• Capital values increased by 1.06% q-o-q, reaching THB 31,679 per sqm, driven by rising land costs in prime logistics locations.

Outlook: Thailand’s warehouse market will continue to attract investors as the market matures

• A steady supply increase is expected in the coming years from both existing and new players. Despite the compressing yield, warehouses continue to be a relatively low-risk recurring-income asset class that should attract new players into the market.
• Unmet demand from the factory market will continue to benefit the warehouse market and drive a more hybrid approach to new warehouse projects in the Eastern Economic Corridor.