Big players from overseas and local residential developers flocked to the Thai logistics market to capitalise on the sector's rise, with occupancy hitting an all-time high the past decade.
Marcus Burtenshaw, executive director and head of occupier strategy and solutions at property consultant Knight Frank Thailand, said ESR, one of the biggest logistics developers in Asia-Pacific, acquired land in Asia Industrial Estate in Samut Prakan in the first half.
"ESR wanted to develop warehouses for rent with a target lettable area of almost 250,000 square metres," he said.
"With more new supply being added by domestic players, the logistics property market will likely be more competitive than ever."
Mr Burtenshaw said new property supply for logistics and warehouses in the next three years totalling millions of sq m would stem from several key warehouse developers such as Frasers Property Thailand, WHA, MK Real Estate and Best Bonded.
The new supply is also contributed by residential developers that diversified to the logistics sector, including SC Asset Corporation and Origin Property.
SC chief executive Nuttaphong Kunakornwong said a new venture is a partnership with e-commerce service provider Flash Group, with an aim to develop 1 million sq m of warehouse space by 2030.
"About 300,000 sq m will be completed next year nationwide, with Nakhon Sawan the first location," he said.
"The logistics business is one of our new ventures generating recurring income, from which we expect a contribution of 20-25% of total profit."
Boon Choon Kiat, managing director of MAI-listed residential developer Chewathai Plc, said the company plans to resume built-to-suit factory development as demand surges.
"We received a lot of inquiries in the past few months. Traffic was 100 times higher than usual," he said. "Most of the inquiries were from China and Germany, asking for more than 5,000 sq m."
After selling 10 factories in Amata City Rayong Industrial Estate to a real estate investment trust two years ago, Chewathai had remaining land plots totalling 13 rai in the estate, which it has held for more than two decades.
The company plans to develop built-to-suit factories on the plots with a total area of 8,000-10,000 sq m for a long-term lease with a 15-year contract. Revenue should materialise in two years, said Mr Boon.
"Despite soaring demand, we have no plan to buy more plots to develop industrial space because there are a lot of competitors in the market," he said. "It's likely too late to buy new plots for development as land prices have already jumped, while big players have vast plots at lower land cost on hand."
According to Knight Frank Thailand, the logistics and warehouse market in the first half of 2022 continued to improve from 2021 as the economy rebounded. The occupancy rate rose to all-time high of 86% while rent remained stable.
Average asking rent for ready-built warehouses dropped 0.5% from the second half last year, but rose 0.3% year-on-year to 158 baht per sq m per month.
Although there was a minor correction in the first half, the annual increase was still in line with the decade average, said Knight Frank.
Mr Burtenshaw said the cold supply chain is a new frontier for logistics-related expansion as demand grows and consumer behaviours change.
This sector includes storing and managing transport of perishable goods, such as fresh food, fruit, vegetables and pharmaceutical products, in temperature-controlled environments.
Key players such as Thailand Post, JWD and Flash Express joined hands to form Fuze Post, a new cold chain delivery entity, primarily serving the Bangkok metropolitan area and major provinces.
According to their estimate, the current market size of cold-chain delivery in Thailand reached 34 billion baht, with annual growth of 8%, making up 5% of the logistics market.
