Find out how Thailand warehouse rents fare against APAC neighbours

Rents in Thailand were stable over the past year.

In the second half of 2023, the average asking rent for ready-built warehouses in Thailand experienced a marginal decrease, settling at 158 THB per square metre per month, according to a recent Knight Frank report. This slight adjustment was primarily due to a small number of existing properties reducing rents by 5-10 THB, alongside new properties entering the market at lower rental rates. Despite these changes, average rental rates across different regions remained stable. 

The BMR and the EEC both maintained an average rent of 161 THB, while the Central region saw a slightly lower rate at 147 THB, and other areas of Thailand were even more affordable at 107 THB. Notably, there was no change in the maximum and minimum rents across all regions, indicating a stable rental market.

Here’s more from Knight Frank:

In our assessment comparing Thailand's warehouse rental rates with those in key logistics markets within the Asia Pacific (APAC) region, including Australia, Singapore, China, and India, we observed distinct trends. While rental rates in Thailand have remained stable over the past year, the landscape in other countries has been marked by diverse dynamics, ranging from strong rental growth to noticeable contraction. 

In 2023, Australia led the region with the highest rental growth, attributed to its relatively low rents, both in terms of a percentage of total operating costs (at around 10%) and in comparison to other global cities. 

Additionally, the Australian logistics market saw a significant reduction in vacant space, nearly halving compared to two years prior, signaling a tightening market. Singapore's warehouse sector experienced constraints in both current and future supply, coupled with the first half of the year still feeling a surge in the third-party logistics (3PL) and e-commerce sectors. In India, the warehouse rental market was buoyed by strong domestic demand and an optimistic economic growth forecast of 7% for 2023. 

Meanwhile, China encountered a widespread property crisis that extended beyond the real estate sector, resulting in diminished overall investment, consumption, and exports. This downturn had a direct impact on the warehousing demand, culminating in a negative growth rate of 5%.

This variation underscores the diversity of the warehouse rental market across the APAC region, reflecting the interplay of different economic factors, market demands, and supply-side pressures across the region.