Robust demand in the wake of the recovery in exports has piqued the interest of local investors in logistics properties, says Knight Frank Chartered (Thailand).
Executive director Marcus Burtenshaw, who also heads the company's commercial agency, said Knight Frank has seen a number of new projects enter the planning stage.
An influx of new supply has caused average occupancy rates to fall, but the market has been quick to absorb new supply in recent quarters, he said.
"We expect this new supply to continue to be taken up quickly as demand for warehousing space grows," said Mr Burtenshaw.
Knight Frank said rental warehouse space totalled 2,907,907 square metres in last year's fourth quarter, up by 5.86% quarter-on-quarter and 22% year-on-year. Warehouse occupancy in the rental market was 93.1%, down by 0.31% quarter-on-quarter due to an increase in supply.
However, the amount of space occupied actually increased by 141,462 sq m in the fourth quarter, indicating a positive net absorption amid robust demand for warehouse space, particularly in Samut Prakan province and along the Eastern Seaboard.
Warehouse rental rates vary depending on building age, specifications, condition and location.
Most of the prime warehouses are modern distribution centres, offering raised floors, docks and ceilings of at least 10m in height.
Rents have not witnessed much fluctuation thanks in part to the new supply, which has kept pace with demand.
The secondary market is markedly cheaper on average, but quality, age and condition are often reflected in the price differential.