Thailand's industrial estate market is expected to flourish next year, driven by the government's planned development of special economic zones in some border provinces.
Thai and Cambodian nationals queue up at a border checkpoint in Khlong Luek in Sa Kaeo province. Khlong Luek is one of the five locations approved by the NCPO for the development of economic zones. PATTANAPONG HIRUNARD
All zones will include industrial, commercial and residential areas along with special benefits and tax waivers for investors in the first few years, says property consultant Colliers International Thailand.
The National Council for Peace and Order (NCPO) in July approved five locations for economic zones in the border areas of Sadao in Songkhla, Mae Sot in Tak, Khlong Luek in Sa Kaeo, Khlong Yai in Trat and in Mukdahan.
The Industrial Estate Authority of Thailand is also planning to develop new industrial estates in neighbouring provinces to support the Asean Economic Community, especially in Kanchanaburi and Chiang Rai.
It also plans to develop eight new industrial estates in some provinces along the East-West economic corridor. In addition, it is seeking cooperation from private companies to develop industrial estates for small and medium-sized enterprises.
According to Colliers, about 8,000 new plots in industrial estates were launched in the first half of this year. The supply of land in industrial estates is about 152,460 rai. Many industrial estate developers postponed launches of new phases in the first half due to the political turmoil.
The NCPO seized power in May and launched policies to boost the economy and restore confidence, but many foreign investors are still concerned about Thailand's situation and this directly affected the industrial estate market, Colliers said.
The Eastern Seaboard has the highest share of the industrial estate market with about 70%, followed by the Central region with 25%. Chon Buri and Rayong provinces are the main areas for industrial estates, with Chon Buri having Thailand's main deep-sea port at Laem Chabang.
Nearly 18,500 rai of industrial land are under development and expected to be opened in the second half of this year, while 96,450 rai are scheduled to come to the market in the near future.
The Southern Seaboard has 39% of total future supply, followed by the Eastern Seaboard with 36%.
Most future supply is likely to be developed this year and next year in phases and will be available for lease or sale.
According to Colliers, the average occupancy rate of all industrial estates in the first half was about 88%, up from 85% last year, despite the political situation that directly affected the confidence of many Thai and foreign investors. Most new deals for leasing or buying plots on industrial estates were concluded in May and June.
The average asking price for land in industrial estates in the first half was similar to the price in the second half of 2013.