Industrial estate developer Frasers Property Industrial (Thailand) or FPIT will spend 4 billion baht to expand new warehouses, built-to-suit factories and city micro storage centres to capitalise on rising demand.
Chief executive Sopon Racharaksa said its overall occupancy in the first quarter this year was 85%, higher than its target of 83% as the industrial segment outlook was bullish, driven by short-term leases and demand from customers in the automotive and electronic sectors.
"Beyond our prediction, demand for short-term leases continued because of the Ukraine-Russia war, China's zero-Covid policy and the earlier peak of the pandemic in the country," he said.
FPIT will spend 3 billion baht on developing warehouses with a total lettable area of 200,000 square metres which will be completed next year.
Due to strong demand, this amount is larger than its typical new supply of 120,000-130,000 sq m per year.
Locations for warehouses will be in the same zones including Bang Phli and Bang Na in Samut Prakan, Rayong, Bang Pakong in Chachoengsao and Wang Noi in Ayutthaya as warehouse demand seeks locations close to cities with good infrastructure.
The company will spend 400-500 million baht to develop built-to-suit factories with a total lettable area of 12,000 sq m which will be completed in 2023.
"The challenge is the higher development costs which rose by 15% due to the war," he said. "We have to manage costs and try to negotiate with tenants to sign a longer-term lease contract in exchange for a better rental rate."
As demand for storage in city areas and e-commerce delivery is on the rise, the company will develop city micro storage centres for B2C on three platforms in the first stage.
The first will be a small cluster of buildings on a 50-rai plot in the Puchao Saming Phrai area with phase one being completed in the middle of next year.
"There are many small-and medium-sized factories in the location looking for a small-scale storage area of around 500-1,000 sq m in size. This is a new market we will tap."
The second platform will be a partnership with an affiliate -- Frasers Property Commercial Co -- which manages and owns several office towers and shopping malls in Bangkok's inner city areas.
"We will use vacant units [stores] for cold storage for restaurants at the building or nearby areas," he said. "These units can be used for e-commerce delivery as many office workers prefer delivery to their workplace rather than at home."
The third platform will be a conversion of land plots owned by TCC Group to self storage.
The pilot project will be on Bang Na Km 1-2 Road or the lower Bang Na area where there are many small-sized condo units whose owners are looking for self storage.
At present, the firm has around 3,000 rai of vacant land for the development of warehouses and factories.
Half of this land is located in Eastern Economic Corridor (EEC) zones. Over 1,000 rai is in Bang Phli and Ayutthaya and 200 rai in Khon Kaen.
This excludes a 4,700-rai plot on Bang Na-Trat Km 32 which is undergoing the design process to develop an industrial-led township project.
"The idea is that we will put in the industrial first as the land is located in an industrial zone. Then, business activities will follow and residential development will be next," he said.
