A large-scale built-to-suit facility drives demand in the final quarter of the year

• Net absorption was recorded at 107,000 sqm in Q4 2024. A large portion of the demand came from the completion of a large-scale BTS project, located in the Northern Vicinity submarket.
• Additionally, smaller ready-built products in the Eastern Economic Corridor areas completed in the quarter saw strong pre-leasing volumes, resulting in a slight increase in the average vacancy rate to 11.2%.

Strong supply growth trend continues throughout 2024

• Three completions were recorded in Q4 2024, resulting in a total supply increase of 129,000 sqm. One notable addition was CP Axtra’s built-to-suit warehouse and distribution centre at the Bangkok Free Trade Zone 5 project in Wang Noi, Ayutthaya.
• Additionally, Alpha Industrial Solutions completed an 18,000-sqm ready-built warehouse in Laem Chabang. Frasers Property also finalised their new project, Project Infinity (Puchao), situated in Samut Prakan.

Rental rate drops amidst strong competition from new ready-built projects in alternative locations

• The average was recorded at 158.0 THB/sqm/month, a 1.1% drop q-o-q. The drop is due to strong competition from new ready-built projects in 2024, most of which are located in the Eastern Economic Corridor submarket, where rental rates are generally slightly lower.
• The capital value stood at 31,300 THB/sqm, reflecting a -1.1% q-o-q and 0.8% y-o-y change. This was due to stagnant rental rates, despite a gradual compression in market yields.

Outlook: Emerging players continue to expand their portfolio in alternative locations, pressuring the average rental rate

• At least 15 projects with ready-built warehouse completions are expected in 2025, amounting to 444,000 sqm. This is due to the rapid expansion of new players such as Alpha Industrial Solutions, SC Expedition and ESR.
• This is expected to drive the average rental rate slightly downward due to the competitive environment. Moreover, the incoming supply is expected to be in alternative locations with lower-than-market-average rental rates.