Samutprakarn province, part of the Bangkok Metropolitan area, has been revealed as the hottest area for factories in Thailand according to new research.
Real estate firm Knight Frank Thailand, in its latest market research covering the market for ready built factories, noted the supply of such factories was at 2,607,014 sqm during the first half of 2015, with 58,927 sqm of new supply added to the market. The occupancy rate of 71.1 percent was down from the 77.6 percent seen at the same point last year, the research found.
Risinee Sarikaputra, Director of Research and Consultancy at Knight Frank Thailand, said that despite the drop in the occupancy rate, there were three areas with an increase in factory space for rent. These were Ayuthaya, Samutprakarn and Chonburi.
She added that all three areas are close to Bangkok as well as being production hubs, especially in the case of Samutprakarn and Chonburi being in close proximity to the Laem Chabang deep sea Port.
The area with the most vacant ready-built factory space was Rayong province, the research discovered.
Rental rates of ready built factories were “relatively high” in Samutprakarn, Chonburi and Chachoengsao provinces, with prices in the THB 230 to THB 250 baht per sqm range for factories within industrial parks. For factories in the same provinces but not situated in industrial parks, rents were generally lower at between THB 150 to THB 170 per sqm.
Warehouse space stood at 3,468,530 sqm, an increase of about 101,327 sqm during the first six months of this year with an occupancy rate of 78.2 percent, a drop from 79.8 percent in mid-2014, according to Knight Frank.
Risinee said the Samutprakarn area was of great interest for rental warehouse space due to an increase in occupancy rates between 2014 to mid-2015 from 78 percent to 83.5 percent.
Rental prices for warehouses to the east of Bangkok, which encompasses Lat Krabang, Bangna-Trat Road and Samutprakarn province, commanded the highest rates of between THB 162.7 to THB 169.7 per sqm.
In the Eastern Seaboard, including Chonburi and Rayong, average rents were around THB 148.9 per sqm.
She added that on the whole, rents were stable due to the relatively large increase in warehouse supply which boosted competition in the market.
Image: A factory and warehouse for rent on Teparak Road, Samut Prakarn, through Knight Frank Thailand.