Thailand’s warehouse: How Thai Warehouses are Driving Investment in the EEC & EV Hub

Thailand’s warehouse: How Thai Warehouses are Driving Investment in the EEC & EV Hub

Amidst the slowdown in Thailand's real estate market due to various factors such as economic slowdown and a surge in loan rejections, one segment in the real estate industry stands out: the warehouse business. It's rapidly becoming a "rising star," demonstrating robust growth that contrasts sharply with the overall performance of the residential and office real estate sectors.

E-commerce and Foreign Investment Fuel the Industrial Estate Market!

While many businesses suffered during the covid-19 pandemic, the pandemic dramatically accelerated a shift in consumer behavior resulting in a rapid surge in online shopping and e-commerce. This led to continuous growth in the logistics, factory, and warehouse sectors. As online transactions grew, the demand for storage and distribution spaces soared. This  growth culminated in a significant leap forward for the rental warehouse and industrial estate markets in 2024.

Data from Colliers Thailand reported over 350,000 square meters of newly leased spaces spanned across the e-commerce, consumer goods, and distribution center businesses. Reflecting a rising demand from both domestic and international investors.

The expansion of e-commerce in the ASEAN region is a primary driver for Thailand's warehouse and industrial estate markets. Beside the rising e-commerce market, the ongoing relocation of manufacturing bases from China to ASEAN remains a critical factor boosting growth in industrial estates, particularly within the Eastern Economic Corridor (EEC). The EEC has attracted significant interest from foreign investors, leading to a 50.12% increase in land transactions during the first three quarters of 2024.

5 Factors Boosting Thailand's Warehouse Market, Attracting Domestic & International Demand

The warehouse industry in Thailand is currently being propelled by many factors. The driving forces behind this segment's remarkable rise can be summarized as follows:

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• Growth of E-commerce: The e-commerce market value is projected to grow by approximately 7.0% in 2025. This online shopping trend directly fuels the demand for more warehousing and logistics space.
• Manufacturing Relocation: Multinational corporations, particularly from China, are relocating their production bases to the ASEAN region. Thailand is among the major destinations due to supportive government policies and strong investor confidence.
• Electric Vehicle (EV) Industry: Significant investment in the EV sector positions Thailand as a regional hub for electric vehicle manufacturing. This development attracts a vast array of EV-related supply chains to settle in the country.
• Global Trade and Tourism Recovery: The overall recovery of global trade and the tourism sector led to an uptick in import and export activities including an increased demand for consumer goods, requiring more storage and distribution.
• Government Policies and Development in the EEC: Improvements in logistics infrastructure in the EEC, are crucial factors that enhance Thailand's competitive advantage and positions Thailand as an attractive location for warehousing and industrial development.

This surge in demand has led to higher rental prices in certain locations. For instance, the rental rates in Bangkok exceed 200 baht per square meter, whereas land transaction prices in the EEC have climbed by 50.12%. This clearly reflects the high potential of the warehouse market.

In Thailand, the warehouse market has publicly listed service providers, which can be divided into two major groups:

• Industrial Estate Group: This group primarily focuses on providing storage space and warehouse management services. They are often located within industrial estates, industrial zones, or industrial parks. Examples include WHA, FPT, and WIN.
• Logistics Group: These companies offer comprehensive logistics services, including storage, in-warehouse goods management, as well as transportation and packaging services. Examples include SINO, SJWD, KWC, WICE, III, LEO, and MPJ.

As Warehousing Thrives, Other Businesses Follow!

The growth of the warehouse and industrial estate business provides a positive impact on other sectors within the supply chain. For example, the manufacturing and export industries—such as food, medical devices, and packaging—require more storage and distribution space. Integrated transportation and logistics businesses must enhance their systems and technology to accommodate the increased volume of goods. This growth also extends to infrastructure development, including road, rail, and port, all aimed at boosting the country's transportation capability.

Although the overall real estate market is facing significant challenges, Thailand's warehouse business is shining brightly. Backed by strong supporting factors and genuine demand from e-commerce, the EV industry, and manufacturing relocations. This growth gives a clear signal that Thailand remains a highly attractive and high-potential investment destination for the future.

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