The year 2010 heralded the biggest increase in supply of Serviced Industrial Land Plots (SILPs) for thirteen years reflecting the underlying long term confidence in the manufacturing sector despite ongoing political unrest over the past four years. The Eastern Seaboard is the dominant player in the industrial estate market with around 63% of total supply of land in SILPs. The Map Ta Phut situation has been largely resolved but question marks remain as to Thailand’s future for heavy industry.

1. year end 2010 | industrial
thaIland
IndustrIal EstatE
MarkEt rEPOrt
Industrial Estate Market
exeCutIve SummaRy
the year 2010 heralded the biggest increase in supply of serviced Industrial land Plots (sIlPs)
for thirteen years reflecting the underlying long term confidence in the manufacturing sector
despite ongoing political unrest over the past four years.
the Eastern seaboard is the dominant player in the industrial estate market with around 63% of
total supply of land in sIlPs.
maRket IndICatoRS the Map ta Phut situation has been largely resolved but question marks remain as to thailand’s
future for heavy industry.
2009 - 2010
Supply
demand
pRICe
oCCupanCy
ConveRSIon table
1 RaI = 1,600 Sq m
1 heCtaRe = 6.25 RaI
1 aCRe = 2.53 RaI
1 RaI = 400 Sq wah
www.colliers.co.th

2. thailand industrial estate Market rePOrt | 2H 2010
InduStRIal ZonIng topography for industrial development. the proximity to China could
show greater promise with the ever increasing trade between the two
countries.
Colliers International thailand has divided the industrial estate market
into five main zones in thailand. these are as follows.
Central area – another key industrial area due to its proximity to
Bangkok.
Eastern seaboard area – this represents the industrial powerhouse due
to its location surrounding the main container port in thailand, laem
southern seaboard area – an under developed industrial area catering
Chabang and its proximity to the Bangkok metropolis. Further growth
mainly to the Malaysian market with halal produce as well as heavy
has come about due to suppliers clustering around large
industrial projects based on oil.
manufacturers.
this report is concerned predominantly with sIlPs but it must be stated
that a considerable number of stand alone factories exist outside of the
north Eastern area – the remoteness of this area and poor transportation
industrial estates.
means that the area is a bit player in the industrial scene. the border
with Cambodia and laos (leading to Vietnam) could provide limited
potential for the future.
northern area – limited industrial activity takes place here due to its
remote location and is predominantly an agricultural area with a difficult
Supply
hIStoRICal Supply SIlpS
source: Colliers International thailand research
the total supply of sIlPs increased from 118,500 to about 119,600 rais in supply was limited until 2009 with a robust increase despite the global
in H2 2010. this increase occurred in the Central area, and the dominant economic downturn. Growth for the first half of 2010 even outstripped
Eastern seaboard area. the year 1996 heralded the highest increase of the whole of 2009.
sIlPs, but the asian Financial Crisis put an end to this surge and growth
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3. thailand industrial estate Market rePOrt | 2H 2010
Supply by Zone
source: Industrial Estate authority of thailand, Board of Investment (BOI) and
Colliers International thailand research
the total supply at the end of the second half of 2010 was around 119,600 area has nearly 645 rais which is the lowest supply with just around 1%
rais. the supply in the Eastern seaboard area dominates the thai market, of the total market.
accounting for nearly two-thirds of total supply. the southern seaboard
new Supply of InduStRIal land plotS by loCatIon, h2 2010
source: Industrial Estate authority of thailand, Board of Investment (BOI) and
Colliers International thailand research
the new supply added in H2 2010 was just approximately 1,500 rais the Central area, further consolidating the dominance of these two
from two main regions; 17% from Eastern seaboard area and 83% for areas.
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4. thailand industrial estate Market rePOrt | 2H 2010
futuRe Supply 2011 - 2012
source : Colliers International thailand research
More than 23,000 rais were launched in 2010 and scheduled to be the northern area on the back of the prospect of increasing trade with
completed by 2012 with 81% from the total located in the Eastern China.
seaboard area and 12% in the Central area. some growth is expected in
demand
take up Rate, duRIng 2008 – 2010
source: Colliers International thailand research
take up has actually increased in every zone from 2008 except for the limited supply in this area any change can have dramatic consequences
north Eastern area. this was due to a number of companies shutting on the numbers both positively and negatively.
down or merging operations in the suranee Industrial Zone. Having
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5. thailand industrial estate Market rePOrt | 2H 2010
demand dRIveRS
foReIgn dIReCt InveStment (fdI)
foReIgn dIReCt InveStment peR half yeaR
source : Board of Investment (BOI) and Colliers International thailand research
the global economic downturn severely curtailed foreign investment FdI for H2 2010 still falls behind the 2006-8 period due to the concerns
into thailand not helped by the airport blockade at the end of 2008 and regarding sustained global growth as well as domestic issues. However,
rioting in april 2009. However FdI has started to return to the country there was a slight increase from H2 compared to H1 2010 which was
as the main investor countries began to recover and capital began to affected by rioting in May 2010 but had very little direct impact on the
flow once again. industrial base.
manufaCtuRIng expoRtS mInuS gold
the export of gold is included in manufacturing export
figures. Gold has little industrial use and is more a
store of value and an investment. during periods of
turbulence and loss of confidence in the financial
system gold is seen as being a better store of value
compared with that of fiat currency not backed up by
precious metals. this is especially the case recently
with quantative easing occurring in a number of
countries, especially the united states. at these times
trading in gold usually increases but is no real
indicator of manufacturing as none is performed.
therefore the figures given have the numbers for gold
exports taken out as it can have a large effect on the
statistics and unlike trade in general can fluctuate
wildly month to month.
Exports surged in Q3 2010 on the back of renewed
economic confidence but fell back sharply in the last Colliers International thailand research
quarter. thailand is dependant on exports where the source: Bank of thailand and Customs department
final destinations are the more developed countries
which are still experiencing difficult headwinds in the
wake of high levels of government debt.
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6. thailand industrial estate Market rePOrt | 2H 2010
InveStment by boI Zone
InveStment - boI CeRtIfICateS ISSued 2010 by InveStment
source : Board of Investment and Colliers International thailand research
the BOI divides thailand into three zones based on the level of economic While zone 2 commands the lion’s share of investment it is interesting to
development. the zones provide the basis for the various incentives note the paucity of outlay being provided to the poorest 22 provinces of
provided for investors with the poorer zones being offered longer tax zone 3. In fact the population of these 22 provinces is greater than that
breaks for example. Zone 1 consists of Bangkok and the neighbouring of the whole of zone 2, therefore on a per capita basis the gulf is even
provinces; zone 2 is where most of the industrial estates are located starker.
such as Chonburi and rayong. Zone 3 covers the poorer provinces and
is further subdivided according to the level of development.
manufaCtuRIng pRoduCtIon Index by month
source : Bank of thailand and Colliers International thailand research
the Manufacturing Production Index indicates the volume of production recover from the severe downturn. It would seem that domestic demand
and the overall health of industry. Over the course of the past two years would account for a significant share of this growth in the first half of
there has been an erratic rise as the overall global economy started to 2009 due to weak export numbers.
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7. thailand industrial estate Market rePOrt | 2H 2010
new faCtoRy peRmItted duRIng the peRIod 2003- 2010
source : department of Industrial Works and Colliers International thailand research
the beginning of the political troubles in 2005 spelled the decline in new factories for the rest of the decade.
new faCtoRy peRmItted duRIng JanuaRy 2009 – deC 2010
source : department of Industrial Works and Colliers International thailand research
the growth of demand for new factories has remained stable over the investors simply ride these out. It is also the case that negative events
course of the past two years. What this seems to indicate is that the often have very little direct impact on the manufacturing process and
rebound in industrial growth has come about from existing businesses only affect overall sentiment. that aside, new entrants are likely to be far
rather than the entry of new ones into the market. Established players more cautious in making such a long term move during a period of
know the thailand market well and are relatively unfazed by the trails conflict. as asEan further integrates, this could be damaging during a
and tribulations of thai politics. also industrial decision making is very protracted spell of instability in thailand as new players seek to enter the
long term, involving the slow and solid build up of a supplier base plus a market.
knowledgeable workforce and investors will not pull out due to sporadic
problems. Many countries have their ups and downs and long term
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8. thailand industrial estate Market rePOrt | 2H 2010
the pRopoRtIon of InveStoRS In InduStRIal eStateS h2 2010 by appRoved RegISteRed CapItal
the Japanese are the largest investors in thailand with approximately
41% followed by asEan and Europe with 28% and 18% respectively.
While north america and australia have some share other parts of the
world have very limited manufacturing facilities here.
For 2010, Japanese investors received promotion certificates for a total
of 337 projects from the BOI with a total value of 110.7 billion baht,
representing around 39% of total foreign investment for that year.
source : Industrial Estate authority of thailand and Colliers International thailand research
land pRICeS
source : Colliers International thailand research
the location of industrial estates or industrial parks is based on factors industrial estates being located close to Bangkok while others, mostly
such as land selling price, proximity to transportation facilities, pulp and paper manufacturers, are located further away from the capital.
infrastructure and a supplier base. the concept of clusters is an important Provinces such as songkhla and saraburi have much cheaper land
factor for locating a factory. samut Prakarn commands the highest land prices due to their location far from Bangkok or port facilities.
prices due to its proximity to Bangkok and the international airport. the
wide variation of prices in Chachoengsao province is due to a number of
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9. thailand industrial estate Market rePOrt | 2H 2010
launCheS wIth hIgh take up RateS In q4 2010
the developer of rBFs buys land usually in the area of an industrial tenants rent warehouse space for logistics as opposed to pure storage.
estate or industrial park and builds factory buildings for lease or sale. the European strength in this field can be partly explained by the number
areas range from 1,000 – 6,000 sq m and are built to international of European dominated retailers such as tesco and Big C.
standards. tICOn is the biggest developer in this business; they have
many factories and warehouses in thailand. Other developers include although the occupancy rate in rBFs and warehouses decreased
tFd and industrial estate developers such as amata, Pinthong and approximately 9% from 2009 in both types, thailand is still a strong
Hemaraj, although this group develops factories only in their own location for manufacturing, so tICOn continues to develop ready built
industrial estates. factories and logistics warehouses for rent and sale in the long term.
all of the ready built factories are located in large industrial estates and heavy InduStRy
industrial parks in the Central area and Eastern seaboard area, such as
Hi – tech, rojana, Bangpa – In, Bangpoo, amata nakorn, amata City,
While the Map ta Phut situation has largely been resolved with the vast
laem Chabang, Pinthong.
majority of projects given the green light there are still long term
concerns regarding the future of heavy industry projects such as steel,
a large number of tenants in the ready built factories are for Japanese
refining and petrochemicals. the Map ta Phut zone is fast filling up and
with nearly 63% followed by Europe and Canada with 12.2% and 7.8%
there is limited space for further development. there are currently no
respectively. Most of the industrial factories are for the electronic /
firm plans for opening up any other zone to heavy industry despite the
electrical industries with just over half and about 20% are for the auto
southern seaboard being mooted. Currently interest in further
parts industry.
development is outside of the country with interest in both Myanmar and
Cambodia as alternative locations. the new dawei deep water seaport
waRehouSeS and industrial zone in Myanmar has attracted considerable interest from
thai companies including a contract given to Italian-thai development to
Warehouses are in locations that support distribution such as Bangna – develop the area.
trad road, laem Chabang, ayutthaya province and saraburi province.
Europeans rent the most warehouse space with 30% of the total followed
by Japanese and australians with 24% and 17% respectively. 48% of
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10. thailand industrial estate Market rePOrt | 2H 2010
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