Industry Report: Warehouses Industry in Thailand

SPEEDA Industry Report

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Report Overview - Warehouses Industry in Thailand

Salient Nature/Key Features of the Industry

• As Thailand is a major manufacturing hub with high exports/imports, warehouses play an important role in the country. By logistics performance index, Thailand ranks 2nd, following Singapore indicating a well-developed logistics infrastructure including warehouses. Warehouses are normally located in Bangkok, industrial parks/estates in the eastern seaboard where they have access to land, sea and air transports. But warehouses are also located in the northern/southern borders close to neighbouring countries.
• New supply of warehouses on a downtrend since 2014 as developers become more conscious to avoid oversupply, so now they build based on actual demand by opting for built-to-suit warehouses (customised warehouse) rather than general warehouses. Warehouse demand and supply decelerated after 2019 as trade slowed down, though growth was still supported by the e-commerce's rapid growth during the pandemic.

Value Chain/Business Model

• As warehouses require sizable amount of land, the major players come from firms like industrial estate developers, logistics firms, diversified property developer. This is why there are several industrial estate developers who operate warehouses for rental/sales, compared to other countries where it is primarily done by logistics firms.
• The value chain of warehouses is simple with developers design and construct the warehouses, which can be general one to cold-storage or silo warehouses, then the warehouses are either leased or sold to end-users. These end-users are manufacturers, exporters/importers, e-commerce sellers or agricultural producers. Rent agreements for warehouses can be short-term (<3 years) to long-term (>3 years).

Others

• Integrated logistics firms like DHL Supply Chain (THA) has some of the largest warehouse space in Thailand as the firm's logistics services are extensive handling both commercial bulk items and small parcel. Logistics firms like freight forwarders, however, generally have smaller warehouse capacity since they primarily act as administrative intermediaries between exporters/importers.
• Besides firms like DHL, industrial estates, with access to huge land and expertise in plant engineering, also possess a huge amount of warehouse space in the country. Examples are WHA Corp (THA).
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      Thai Warehouses Industry Value Chain

Report Index

Industry Overview

• Warehouses Play an Integral Role in the Thai Logistics Industry; General-Purpose Warehouses Dominate Total Warehouse Supply
• Industrial Estate and Diversified Property Developers Among the Major Players in Addition to Logistics Firms
• Central Region Including Bangkok Metropolitan Region and the Eastern Seaboard, the Most Popular Location for Warehousing Activities
• Tax and Non-Tax Incentives Available for Warehouses via Logistics Parks

Market Trends

• New Supply Addition on a Downtrend Since 2014; Warehouse Demand and Supply Decelerated After 2019
• Asking Rents Record Marginal Growth over 2020-2021; After Being Stagnant Over the Last Decade

Competitive Trends

• Consolidated Warehousing Activity Within Industrial Estates and Central Region; Less Consolidated Activity in Other Parts
• WHA Corp; Company Providing both Modern and Traditional Warehousing Services
• Frasers Property; Subsidiary of a Multinational Company in Singapore
• SST Warehouse; Company Formed by a Divestment of the Warehousing Business from the Parent Company

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