Logistics real estate in 67 was affected by the worst EEC Red Sea. Occupancy rate decreased by 6.9%.

Logistics real estate slowed down, pushing the ownership rate down 3.2% to 84.4%. EEC contracted the most by 6.9%, expecting conflict in the Red Sea - freight rates. Making the Thai logistics market not bright

On March 11, 2567 , Knight Frank, a real estate consultancy , reported that the logistics real estate market has slowed down since the second half of 2566 due to logistics (3PL) and e-commerce companies downsizing their operations to align with demand. “External factors” include…

• Conflict in the Red Sea
• Other geopolitical tensions

This raises concerns about global supply chains. and is expected to have an impact on Thailand's logistics industry in 2567

Negative factors of the Thai economy Pressure on the manufacturing sector. Outlook for 67 is not bright.

While "domestic factors" include a weak economy with GDP growth of only 1.9% last year, government investment not reaching its full potential with only 1.3% growth, and spending declining by 3.1%, the private sector, particularly the service industry, showed outstanding growth of 15%.

Considering indicators related to logistics, statistics from the Office of Industrial Economics (OIE) indicate that the production index decreased from 94 in June 2566 to 88 in December 2566.

Meanwhile, the finished goods inventory index fell from 139 to 127. This decline in production and inventories indicates a less optimistic outlook for the future.

Supply Real Estate Logistics Continuously expanding

The overall supply of ready-made warehouses reached 5.70 million sq m, an increase of 169,000 sq m compared to the previous half, an increase of 3.1% half-year-on-half and 6.3% year-on-year. New supply includes:

• • KR Warehouse – Bueng Subdistrict and Alpha, Laem Chabang, Chonburi
  • Fraser Bangna 2 Chachoengsao
  • ESR Asia Suvarnabhumi, Samut Prakan and Alpha Rangsit – Phahon Yothin Km. 33, Pathum Thani.

Increased supply also comes from expansion of existing projects such as KR Warehouse - Bowin, Chonburi and Buildwell of RBF Pathum Thani, etc.

The distribution of ready-made warehouses in Thailand is divided into 3 main regions.

1. Bangkok and metropolitan area (BMR) still holds the largest market share, accounting for 45% of the total warehouse supply, with 41% in the Samut Prakan province.

Net leasable area in Bangkok and surrounding areas increased 1.0% half-year over half-year, reaching 2.52 million sq m.

2. The Eastern Economic Corridor (EEC) ranks second, accounting for 2% of the overall warehouse supply. Chonburi leads with a share of 38%, followed by Chachoengsao at 25%.

The EEC had the greatest expansion in the first half of this year at 4.4%, reaching 2.16 million sq m.

3. Central Region: Phra Nakhon Si Ayutthaya Province is an important domestic transportation center, accounting for 13% of the total speculative warehouse space. Followed by Pathum Thani at 4%.

with strong growth of 3.8% half-year over half-year Total leasable area is 944,700 sq m.

Logistics rental space moved to EEC, feared that it would affect occupancy rates in other zones

The total supply of rental space expected to be completed in 2567 is 413,900 sq m, consisting of 218,100 sq m in the first half and 195,800 sq m in the second half. This future space represents 7% of current supply.

Approximately 70% of future supply is located in the Eastern Economic Corridor area. Followed by Bangkok and surrounding areas, accounting for 25%, which shows the trend of moving rental space to the Eastern Economic Corridor. This may affect the occupancy rate in other districts.

Demand goes against supply Negative land occupancy rate, EEC is the worst.

In the second half of 2566, the logistics real estate industry slowed down. This can be seen from the decreasing occupancy rate and increasing vacancy.

net absorption is the net change in total market occupied space. In the second half of the year, it was negative at 31,800 sq m. This is the first time that this has happened in the past five years. As a result, the total occupied area decreased by 0.7% half-year over half-year to 4.81 million sq m.

Meanwhile, the amount of rental space decreased slightly. But in some industries, such as FMCG and automotive, they remain key tenants that require ready-made warehouses with facilities for flexibility and rapid set-up.

We are also noticing an expansion in e-commerce. Although demand for space will not increase as rapidly as in the previous period,

In terms of the source of demand Thai companies still play the largest role in the warehouse market. with support from domestic consumption

Followed by Japanese companies, which have played an important role in the Thai industrial sector for a long time. Chinese companies come in third place and their market share is decreasing. This is mainly due to the economic situation of the country which has a wide impact on companies in various industries.

The continued upward trend in market occupancy stalled in the second half of 2566, mainly due to a slowdown in demand for logistics real estate.

Meanwhile, new construction was flat compared to the first half of 2566, resulting in the overall occupancy rate falling 3.2% half-year to 84.4%, returning to the average level over the past five years.

In the Bangkok Metropolitan Region (BMR), little has changed. The occupancy rate decreased by 0.7% half-year over half-year. This district plays an important role in the e-commerce industry. which had grown rapidly in the previous period Growth slows in 2566, but the district still has the highest occupancy rate at 90.6%.

Part of the Eastern Special Economic Corridor There is a significant downward trend. The occupancy rate dropped markedly to 6.9% half-year over half-year. As a result, the occupancy rate dropped to 76.4%.

This slowdown is due to reliance on exports and imports. This is an industry that is sensitive to the global economy and challenges such as the crises in the Middle East and Ukraine. This results in decreased demand and disrupted supply chains.

In addition, the Eastern Economic Corridor has the highest number of new supply launches. accounting for more than half of Thailand's new supply This makes the challenges in the district even more severe.

On the contrary The Central Region is an area with outstanding operations. supported by stable domestic consumption and the amount of new warehouse space being speculated on is relatively small. This area has experienced remarkable expansion. The occupancy rate increased by 0.6% half-year-on-half, or 5.4% year-on-year, reaching 87.0%.

Real estate, logistics, fierce competition Rental rates dropped in Thailand to minus 5%.

The average ready-made warehouse rental price in the second half of 2566 decreased slightly to 158 baht per square meter per month. This is because some warehouses have reduced their rents by 5-10 baht per square meter, along with new warehouses entering the market offering lower rents.

Even though there have been changes But the average rental rate in every area remains stable. Both the Bangkok and surrounding areas and the Eastern Economic Corridor There is a fixed average rent of 161 baht.

While the central region has a slightly lower rental rate at 147 baht and other regional areas at 107 baht, the highest and lowest rental rates in all regions are unchanged. Reflecting the stable rental market

We've conducted an assessment to compare warehouse rental rates in Thailand with countries across Asia Pacific (APAC), including Australia, Singapore, China and India.

Although rental rates in Thailand have remained stable over the past year. But markets in other countries There are various changes. From strong rental growth to clear contraction in 2566

Australia has the highest rental growth. This is due to the relatively low rent. Both in terms of percentage of total operating costs (approximately 10%) and in comparison to other cities around the world.

Additionally, the Australian logistics market has seen a significant decline in available space. This decreased by almost half compared to 2 years ago, indicating tight market conditions.

As for Singapore, current and future supply is limited. In addition, the first half of the year saw outstanding growth in the logistics (3PL) and e-commerce sectors in India. The warehouse rental market is driven by strong domestic demand. And economic growth is likely to be positive, growing 7% in 2566.

Meanwhile, China is facing a widespread real estate crisis. spread to other industries As a result, investment, consumption, and exports decreased. This slowdown has a direct impact on warehouse demand. causing the growth rate to be negative 5%

This change highlights the diversity of the warehouse leasing market across Asia Pacific. which reflects the interrelationship of economic factors market demand and supply pressures across the region

Red Sea crisis puts pressure on Thai logistics real estate

Overview and market trends near the end of 2566 Geopolitical tensions are intensifying around the world. Including the ongoing Russo-Ukrainian war. Intensifying conflict between Israel and Hamas and the activities of the Houthis in the Red Sea. The Red Sea is a key transit point covering 10-15% of global maritime traffic, raising several concerns for global logistics.

Intensifying attacks in the Red Sea forced the ship to detour around the Cape of Good Hope. This adds two weeks to shipping time. and has increased costs Including higher fuel and premium costs due to increased demand for routes.

The Drewry World Container Index (WCI) rose on freight rates. Prices for a 40-foot shipping container soared from $1,661 at the end of 2566 to $3,964 at the end of January 2567, more than doubling in one month.

The most affected shipping routes are expected to be between Asia and Europe. This has a significant impact on various industries such as the agricultural industry. (perishable goods), automobiles (which are major exporters in Europe and Asia), electronics (that require speed) and textiles and clothing (which has low profits)

Amid falling global consumption and widening uncertainty, Thailand's logistics real estate market, which is closely linked to import and export conditions Facing a recession in the second half of 2566, the net absorption figure was negative 31,800 sq m after growing all the time.

As a result, market occupancy fell to 84%, down approximately 3% from the first half of 2566. Key factors driving the decline in demand are logistics (3PL) and e-commerce companies scaling up operations. in line with demand trends After expanding horizontally in the previous period

The future to current supply ratio remains strong at 7%, reducing the risk of a market slowdown. This is mainly due to the fact that many large operators have turned their attention to projects that are built more suitable for their purpose. This is especially true at a time when land and construction costs are rising. higher interest rates and slower rental rates

In addition, some operators have expanded their business beyond traditional warehousing into specialized services such as cold storage, hazardous warehousing. or automotive yard This is a business that is expected to grow significantly in the future.