While Thailand’s residential property market continues to struggle, some developers are looking at other ways to make money during the downturn. Logistics is one sector beginning to draw interest with big domestic companies as well as a Japanese developer looking to enter the field.
Looking to move away from its residential focus, M.K. Real Estate Development announced it will spend THB1.2 billion during the next few years to develop 135,000 sqm. of rental space for warehouses and factories in the Bangkok Free Trade Zone in Samut Prakan, according to local media reports.
“The investment in the rental warehouse and factory business is the company’s strategy to shift to non-residential property that generates recurring income,” M.K. Real Estate chief executive Vorasit Pokachaiyapat told the Bangkok Post.
M.K. is hoping to increase the net profit proportion gained from non-residential property to 50 percent of the total between now and 2020. It currently accounts for 10 percent of the developer’s net profit.
Japanese real estate developer Mitsui Fudosan is also looking for opportunities in Thailand’s logistics and warehouse market. The company recently announced that it was furthering its residential partnership with Ananda Development. The company will team up to build three more high-rise condominium projects near mass transit stations to bump the joint ventures total number to 12. However, the company sees potential beyond the residential sector.
“Besides the Thai market, we will tap into the opportunities offered by rapidly growing Asean economies,” Mitsui Fudosan executive managing officer Akihiko Funaoka was quoted as saying. “We set up our office in Bangkok in March to study the local market for any areas we can explore. This office is the second one after Mitsui in Singapore was established some years ago.”
According to Akihiko, the reason Mitsui is interested in investing in the country’s logistics sector has to do with location. Thailand is situated as a hub in the Asean offering links to several other countries making it popular with companies needing space.
