H1 2015 Logistics Property Market - Microsoft · 2015. 8. 24. · H1 2015 Logistics Property Market research • The total supply for warehouse rental space was about 3,468,530 square

H1 2015Logistics Property Market

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• Thetotalsupplyforwarehouserentalspacewasabout3,468,530squaremetres,increasingby3%. Thenewsupplythatenteredthemarketwasonly101,327squaremetres.• Theoccupancyratedroppedto78%from79.8%inthepreviousyear.TheEasternSeaboardareastill hadthelowestoccupancyof57.7%.• Onaverage,thewarehouserentalrateslightlydecreasedby0.51%to159.8bahtpersquaremetre permonth.TherateintheEasternSeaboardareadroppedthemost,by4.1%.

highlights

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Source: Ministry of Commerce and Bank of Thailand

Economic Overview

Thailandisoneoftheexport-orientedcountrieswhereexportsaccountformorethantwo-thirdsofthetotalgrossdomesticproduct(GDP).

ThecurrentThaiexportsituationdeclinedduetolowerforeigndemandandChina’seconomicslowdown.Chinaisoneofthelargestexportdestinationsandthemajorconsumerofcommodities.TheconsequenceisnotonlyfeltinThailandbutalsoinAseaneconomicswhereChinaisreducingtheirimportvolumes.

InQ12015,thenumberofcontainersthatpassedthroughLaemChabangPortwas1,602,166TEUs,droppingfromthatofthepreviousquarterby5.3%,butincreasingfromthatofthelastyearby6.8%.

ThemovementininternationaltransactionsthroughLaemChabangPortindicatestheincreasingdemandoflogisticsservices,includingtheneedforwarehousespace,wheremorethan80%ofgoodspassthroughLaemChabangPort.

Figure1Export – Import Volume Index

Figure2No. of Containers Passing Through Laem Chabang Port

Source: Port Authority of Thailand

Remark: TEU - Twenty-foot equivalent unit container

www.knightfrank.co.th

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Supply

Figure4Distribution of Warehouse Space by Location

Figure3

Source: Knight Frank Thailand Research


Thetotalsupplyforwarehouserentalspacewasabout3,468,530squaremetres,increasingby3%.Thenewsupplyenteringthemarketwasonly101,327squaremetres.ThenumberofnewlycompletedwarehouseshasdecreasedinH12015comparedwith310,000-440,000squaremetressemi-annuallyinthepreviousyears.RentalwarehousedevelopershavebeenslowingdowntheirplansalongwiththelowerdemandaffectedbydropsinThaiexports.

SamutprakarnandChonburiprovincesarethemoststrategiclocationswherelogisticserviceprovidersmaintaintheirdistributioncentres.Samutprakarnaccountsfor36%ofthetotalmarketsupply,whichgainsadvantagesfromtheirlocationclosetoBangkok,SuvarnabhumiAirport,andindustrialestates.Chonburiprovinceaccountsfor24%ofthetotalsupply,anditisalsoapopularareathatenjoysproximitytoLaemChabangDeepSeaPortandautomotiveproductionhubs.

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Future Supply




Inmid-2015,thetotaloccupiedwarehousespacewas2,706,914squaremetres,increasingonlyby21,199squaremetresor0.8%.Theoccupancyratedroppedto78%from79.8%inthepreviousyear.Bothsupplyandoccupiedspacehavebeenincreasing;however,thenewsupplyincreasedmuchmorethanthenetabsorption.

Thereareapproximatelymorethan230,000squaremetresoffuturesupplyin2015.SamutprakarnandChonburiprovincesarestillthemostpopularlocationsthatdemandwarehousespace,especiallyinareassituatedbetweentheindustrialestatesandLaemCha-bangDeepSeaPort.

Table1

Future Supply

There are approximately more than 230,000 square metres of future supply in 2015. Samutprakarn

and Chonburi provinces are still the most popular locations that demand warehouse space,

especially in areas situated between the industrial estates and Laem Chabang Deep Sea Port.

Project Developer Province Total Space

Completion

TPARK Bangplee 4,5,6 TPARK Samutprakarn 155,000 N/A

TPARK Wongnoi 2 TPARK Ayutthaya 80,000 2015

TPARK Khonkaen TPARK Khonkaen 9,000 2015

TPARK Samutsakorn TPARK Samutsakorn 25,000 2015 WHA-KPN Mega Logistics Center Bangna-Trad km.23

WHA Samutprakarn N/A 2015

WHA Logistics Kabinburi DC. WHA Prachinburi 16,500 N/A

WHA Mega Logistics Center Laem Chabang WHA Chonburi 23,000 2015

WHA Amata Nakorn I.E. WHA Chonburi N/A N/A

Tip Project Tip Holding Samutprakarn 30,000 2015

Thriven Warehouse Bangna Km.19 Thriven Group

Samutprakarn 9,000 2015

Poonphol Bangna Km.38 Poon Phol Group

Chachoengsao 18,000 2015

KCMA (2000) Group KCMA (2000) Group

Ayutthaya 39,619 2015


Figure5Occupied Space and Occupancy Rate


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Positivenetabsorptionreflectspositivedemandoverthepastthreeyears.EventhewarehousenetabsorptionstayedinpositiveinH12015;therewereonly21,199squaremetresofnewtake-upspace.

Figure6Net Absorption

Figure7Occupancy by Key Logistics Locations

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Thehighestoccupancyrateof98.1%wasshownintheEasternBangkokarea,coveringLadkrabang,whichhaslimitedsupply.Itwasfollowedbytheoccupancyrateof85.9%inSuvarnabhumi-Bangpakongarea.

WarehouseoccupancyintheEasternSeaboardareawasstilllowcomparedtootherlocationsduetoalotofsupplyenteringthemarketsince2012,whichcausedoccupancyratestofall,amidstrelativelylowlevelsofdemand.

Thelatestoverallrentalrateslightlydecreasedby0.51%to159.8bahtpersquaremetrepermonth.ThehighestdropwasseenintheEasternSeaboardarea,whichdecreasedby4.1%from2014to148.9bahtpersquaremetrepermonth,duetohighercompetitionandthedropinThaiexports.

Occupancy by Key Logistics Locations


The highest occupancy rate of 98.1% was shown in the Eastern Bangkok area, covering Ladkrabang, which has limited supply. It was followed by the occupancy rate of 85.9% in Suvarnabhumi-Bangpakong area.

Warehouse occupancy in the Eastern Seaboard area was still low compared to other locations due to

a lot of supply entering the market since 2012, which caused occupancy rates to fall, amidst

relatively low levels of demand.

Occupancy Rate

Suvarnabhumi-Bangpakong

Eastern Seaboard

Pathumthani-Ayutthaya

Eastern Bangkok

Market

H2 2013 86.1% 58.4% 93.7% 99.0% 79.0% H1 2014 85.2% 59.9% 95.6% 98.7% 80.0% H2 2014 86.0% 62.5% 89.0% 98.1% 79.8% H1 2015 85.9% 57.7% 81.5% 98.1% 78.0%

% Y-o-Y -0.1% -4.8% -7.5% 0.0% -1.7% Source: Knight Frank Thailand Research

98.9% 98.9% 98.6% 98.6% 98.8% 99.0% 98.7% 98.1% 98.1% 99.5%

89.6%

77.9%

69.4% 66.6%

58.4% 59.9% 62.5%

57.7%

100.0% 100.0% 100.0% 100.0% 98.6% 93.7% 95.6%

89.0%

81.5%

93.5% 93.6% 95.2% 94.2% 88.2% 86.1% 85.2% 86.0% 85.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015

Eastern Bangkok Eastern Seaboard

Pathumthani-Ayutthaya Suvarnabhumi-Bangpakong


Table2

Figure8Rental Rate


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ThehighestrentalratesforwarehouseswereseeninlocationsclosertoBangkok,whichareEasternBangkok,Suvarnabhumi-Bangpakong,andPathumthani-Ayutthaya,at185bahtpersquaremetrepermonth,followedby180bahtpersquaremetrepermonthintheEasternSeaboard.Therentalrateinthesamelocationvariesdependingonmanyfactors,suchaswarehousecondition,ageofbuildings,andspecifications.



Table3

Figure9Warehouse Rental Rate

Rental Rate


The latest overall rental rate slightly decreased by 0.51% to 159.8 baht per square metre per month. The highest drop was seen in the Eastern Seaboard area, which decreased by 4.1% from 2014 to 148.9 baht per square metre per month, due to higher competition and the drop in Thai exports.

Average Asking Rental Rate as of H1 2015 (THB/sq.m./month) Suvarnabhumi-Bangpakong

Eastern Seaboard

Pathumthani-Ayutthaya

Eastern Bangkok

Overall Market

H2 2013 163.6 156.7 150.1 169.1 160.3

H1 2014 163.2 155.2 150.7 169.7 160.6

H2 2014 162.2 153.2 153.8 169.7 160.7

H1 2015 162.7 148.9 153.8 169.7 159.8

% Y-o-Y -0.3% -4.1% 2.1% 0.00% -0.51% Source: Knight Frank Thailand Research

168.8 168.8 169.1 169.1 169.1 169.1 169.7 169.7

148.3 152.4 154.1

151.8 153.7 156.7 155.2

153.2

147.4 147.4 147.4 147.6 150.1 150.1 150.7

153.8

158.7 158.7 160.2 160.0 164.1 163.6 163.2 162.2

130.0

140.0

150.0

160.0

170.0

180.0

H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014

THB/

sq.m

./m

onth

Eastern Bangkok Eastern Seaboard

Pathumthani-Ayutthaya Suvarnabhumi-Bangpakong

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Outlook In2015,thewarehousesupplywillcontinuegrowingbutataslowerratethaninthepreviousyear.Developershavesloweddowntobuildnewprojectsasfuturedemandisexpectedtodrop.CurrentexportsituationsandarecessioninChinastillaffectdemandforlogisticsspace.Inthelongrun,weexpecttoseeincreaseddemandforwarehousespacefromthehighercompetitiveness,thankstothegeographicadvantageofThailand,thedevelopmentoflogisticssystemsandinfrastructureinvestments,andtherecoveryofThaiandglobaleconomy.

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KnightFrankResearchReportsarealsoavailableatwww.knightfrank.com

© Knight Frank LLP 2015

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H1 2015 Logistics Property Market - Microsoft · 2015. 8. 24. · H1 2015 Logistics Property Market research • The total supply for warehouse rental space was about 3,468,530 square