Self-storage is emerging in Thailand

March 18, 2019 / By  

Alternative asset classes are all the rage around Asia as investors look to deploy large amounts of capital. While Thailand is generally considered a non-core location for most traditional asset classes, there is significant interest in the market for emerging alternatives such as self storage. Interest in self storage has been driven by evolving demographics, changing living patterns, and more generally, urbanization – half of Thailand’s population now lives in urban areas according to the United Nations.

The Bangkok Metropolitan Region is home to nearly 40% of Thailand’s urban population and generates more than half of the nation’s GDP. It is also home to most of the country’s self storage operators, with a handful also located in second tier markets like Phuket and Pattaya. The first self storage operators in Bangkok (that continue to operate today) have been in business for about 15 years, however the industry has only recently started to take off in earnest.

Demand for self storage space has long been driven by residential demand, especially as average unit sizes have shrunk by almost half since 2004.

Figure 1: Average Unit Size of New Launch Condominium Across All Segments, Bangkok
Market Wide
Source: JLL Thailand Research

However, our research suggests that much of the recent industry expansion is being fueled by non-residential demand. Roughly half of current demand is coming from entrepreneurs and SMEs looking for flexible storage solutions for fledgling e-commerce businesses and from smaller office occupiers who are looking to adopt more flexible office environments made possible by the entry of major co-working operators.

The most successful operators in the market today are those that have chosen locations that are easily accessible by car and public transit (for downtown / urban areas) and have simultaneously crafted marketing strategies that target specific client segments in each location. One key success factor for new market entrants is having a flexible, phased build-out plan. For example, one new multi-storey operation has been built out one floor at a time as demand warrants, with unit sizes on each floor being tailored to specific client segments as demand evolves. Other operators who have completed build-out in a single phase are struggling with unit sizes / mixes that the market does not currently want.


On the demand side, we expect further growth in the self storage industry, with significant potential for future demand from small e-commerce operators. Thailand is currently Southeast Asia’s second largest e-commerce market and is expected to grow by more than four times through 2025 according to Google and Temasak.

In terms of potential new supply, anticipated changes to land and property tax regulations due in 2020 are expected to place a heavy burden on owners of unutilized land. Landowners are thus likely to search for buyers or tenants looking for long-term leases to help defray tax bills, which could create ample opportunity for self storage operators to exploit and develop new outlets.

While the pace of growth over the next few years remains to be seen, we fully expect the industry to continue to draw interest from domestic and foreign investors alike.

For further information on regional self storage research see JLL “The rise of self storage in Asia Pacific, June 2017”.

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