Delays in obtaining both Environmental Impact Assessements (EIA) and Board of Investment (BOI) approvals are impacting Thailand’s industrial property market.
According to CBRE in its Thailand Industrial Marketview Q1 report, there has been no drop in land prices for Service Industrial Land Plots (SILP). Total SILP sales dropped 84.5 percent quarter-on-quarter and 70.5 percent year-on-year to stand at just 209 rai.
The decline was partly due to the inability for the BOI to grant approvals for projects with an investment value of more than THB200 million. Since October 2013 the BOI has been without a board of directors, and this resulted in a significant 87.2 percent year-on-year decrease in BOI-approved projects during the first three months of this year.
Occupancy of ready-built factories (RBFs) in CBRE’s survey stood at 76 percent in Q1 2014, slightly down from 76.1 percent in Q4 2013. The total supply was 2,040,693 sqm. Leased space was 1,550,924 sqm. CBRE’s discussions with developers showed that rents for RBFs remained unchanged from Q4 2013.
Occupancy for Modern Logistics Properties (MLPs) was 75 percent, down from 80 percent in Q4 2013 as more supply was completed. CBRE reported that supply is expected to increase quite dramatically as at least 575,000 sqm of MLPs are currently under construction and will increase current supply by 32 percent.
There is an even greater volume of land under site preparation reserved for MLP development which could result in as much as two million sqm of lettable space of new buildings, which will increase current levels of supply by 135 percent, according to CBRE.
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Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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If you have a news story or comment for publication about Thailand property or real estate email: andrew@propertyguru.com.sg