Warehouses, modern logistics take centre stage

Warehouses, modern logistics take centre stage

Warehouses and modern logistics are becoming rising stars in the property sector amid stagnant residential development in the middle to lower-income segment, according to developer Frasers Property (Thailand) Plc (FPT).

Thanapol Sirithanachai, Country Chief Executive Officer, said residential development business in the middle to lower-income segment was flat because of high household debt, rising interest rates and inflation. The high-end segment is still doing well, said Mr Thanapol.

"Commercial property will have an oversupply in the next few years while the hospitality sector is picking up," he said. "The rising star is warehouse and modern logistics property."

Mr Thanapol said it may no longer be feasible in the future to develop stand-alone facilities but establish smart communities instead.

"With the disruption from the Covid-19 impact and the digital economy, the traditional supply chain may be obsolete as customers buy online and the transaction goes directly to a warehouse," he said.

Warehouses are no longer only for storage, but also serve as an operational centre. They have become a centre of gravity which requires supporting facilities and infrastructure, said Mr Thanapol on Wednesday during the Thailand Focus 2022 seminar.

As a result, traditional warehouses with a single purpose or ready-built facilities will move forward to become built-to-suit or tailor-made facilities.

They will also no longer be located factories but near consumers, and they will be equipped with city logistics and last mile delivery.

"We will develop a sustainable smart township to support the new economy and environment. It will be an integrated real estate development with not only one asset class," said Mr Thanapol.

The project will be located on a 4,700-rai plot on Bang Na-Trat Km 32, comprising warehouses, logistics, manufacturing, business parks for the new economy and startups, along with residential developments to attract new talent as well as retail spaces.

There would be four trends in the future of the logistics and industrial sector.

"Modern digital economy is a new growth. E-commerce is taking the world. Smart industry 4.0 is a new standard and environmental, social and governance offerings are mandatory," he said.

Mr Thanapol said growing sectors with strong demand in logistics and industrial properties are e-commerce, retail, and electronics and appliances as well as automotive.

However, demand from industries like garment, chemical and construction materials is declining.

The most active investors are from the US, Singapore, Thailand and China, while Japan and Europe are recovering, unlike Australia which is slowing down.

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