Market Research I N D U S T R I A L E S TAT E M A R K E T INDUSTRIAL ESTATE MARKET HIGHLIGHT
| OCT | 2008
c o l l i e r s i n t e r n at i o n a l
| T H AILAN D
IN D U STRIAL ESTATE M AR K ET |
OCT
|
2008
INDUSTRIAL ESTATE MARKET HIGHLIGHT Market Indicators 2007
2008F
SUPPLY DEMAND PRICE occupancy RATE
An industrial The increasingestate interest /park of is real an estate from of area theland Scandinavian set aside for market industrial is directly connected development. Industrial to the parks upsurge are in tourism usually located to Thailand. close toThe transport flow of Scandinavian facilities, especially interest whereinmore Thai than property one transport started modalities from Sweden coincide: and later spread highways, railroads, to airports, Denmarkand and Norway. Earlier navigable rivers. people of these countries tended to buy resort properties in Spain and France.
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• In 2008, despite ongoing political and economic problems, industrial estates have been on an upturn in part due to new tax cuts for the property businesses that directly benefit developers. While the domestic political situation is worrying investors, it is not as big a concern as the global economic slowdown. • The total supply at the beginning of the first half of 2008 was 104,279 rais. The supply in the Eastern Seaboard area accounts for 69,635 rais, the highest of the five regions. The large supply in the Eastern Seaboard is due to BOI privileges in investment promotion zone 3, which was granted the longest term of corporate tax exemption and zero import duty on raw materials used in manufacturing export products. (See Appendix for full details of tax exemptions) Also, the Eastern Seaboard area is well located near Bangkok, Suvarnabhumi Airport and Laem Chabung and Map Ta Phut Deep Sea Ports. This strongly benefits projects in this area in terms of logistics and reduces transportation costs. • There will be approximately 24,039 rais added to the supply of industrial estate land plots by 2010. The majority of supply will be added in the Eastern Seaboard area, with approximately 14,173 rais, followed by Southern Seaboard area and Central area, with approximately 6,000 rais and 3,336 rais respectively. • The total take-up in the Eastern Seaboard area, consisting of 16 industrial estates, was highest, at 48,885 rais, followed by the Central area at 26,212 rais. The Central area also enjoys strong demand due to similar advantages of a convenient location close to Bangkok, a sea port, and available facilities. • The Central area has the highest occupancy rate of 86%, while the Eastern Seaboard area has an occupancy rate of 70%, with the largest supply of 69,635 rais. In the Central area, Bangkok and Samut Prakarn have the highest occupancy rate, at 98% and 99%, respectively. • The average SILPS (Serviced Industrial Land Plots) price in industrial estates ranges between THB 3 million and THB 4 million per rais. • Thailand has great potential to be a gateway to ASEAN, but while logistics costs in Thailand are still high compared with other countries, such as Japan, the US and Europe, Thailand will encounter increasing competition for its role as a manufacturing base. • The total supply of SME factories, as of 1H of 2008 was approximately 1,142,730 sq m. Ticon is the developer of SME factories which accounts for the largest share of supply, accounting for 494,418 sq m, followed by TFUND and Hemaraj, accounting for 286,482 sq m and 146,030 sq m, respectively. • There were approximately 216,064 sq m in 114 factories added in the first half of 2008, of which approximately 170,011 sq m in 81 factories was added by TICON, followed by Amata, accounting for 24,593 sq m in 20 factories, while the supply added by Hemaraj was approximately 21,460 sq m in 13 factories. • There will be approximately 153 factories added to the supply of SME factories by 2009, with an approximate area of 316,296 sq m. • There is an increase in investment from small manufacturers favourable to rental factories’ demand. As small manufacturers tend to rent SME factories rather than buy industrial land plots and build their own factories, we could lead to a stronger market for SME factories, which would be positive to the SME factories market. However, current economic conditions may lead to a curtailing of SME factory demand in the short term. The average occupancy rate of SME factories is 81.36%.
The Knowledge Report | October | 2008 | Industrial Estate Market
INDUSTRIAL ESTATE MARKET OVERVIEW
This idea of setting land aside through this type of zoning is based on several concepts: • To be able to concentrate dedicated infrastructure in a delimited area to reduce the per-business expense of that infrastructure. Such infrastructure includes roadways, railroad sidings, ports, highpower electric supplies (often including three-phase power), high-end communications cables, large-volume water supplies, and high-volume gas lines. • To be able to attract new business by providing an integrated infrastructure in one location. • To set aside industrial uses from urban areas to try to reduce the environmental and social impact of the industrial uses. • To provide for localised environmental control that is specific to the needs of an industrial area.
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In 2008, industrial estates have been on an upturn due to new tax cuts for the property business that directly benefit developers. While the domestic political situation is worrying investors, it is not as big a concern as the global economic slowdown. Thailand hopes to attract up to THB 3 trillion in foreign investment between 2008 and 2011 under a new campaign aimed at eliminating red tape and streamlining licensing procedures for overseas investors. The government’s infrastructure megaproject programme, expansion of industrial estate facilities and new incentives to support basic industries, such as steel, petrochemicals, cement and power, will help facilitate investment in other sectors. The Board of Investment (BOI) plans to offer more tax and non-tax privileges in an attempt to reach its investments target of THB 600 billion this year. Japan is the largest foreign investor, with investment mostly in the automotive, auto-parts, electronics and steel industries. Japanese investors are worried about the political stability in Thailand since
they are concerned that protests may lead to delays in the government’s implementation of economic policy. Thus, in the first six months of this year, the BOI managed to attract only THB 203.7 billion worth of investment from 640 projects. This figure was 11% lower than in the same period last year or only 30% of the full-year target. As a result, the board plans tax exemptions for machinery imports by companies approved for regional operating headquarters (ROH) incentives. The ROH programme offers customs and currency privileges, plus a 10% corporate tax, one-third the normal rate. Investments planned in upstream steel, petrochemicals, energy, processed food and electronics would result in a better performance in the second half of the year.
The Knowledge Report | October | 2008 | Industrial Estate Market
INDUSTRIAL ESTATE LOCATIONS
Colliers has divided the industrial estate market into five (5) locations, as follows:
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The Knowledge Report | October | 2008 | Industrial Estate Market
1. EASTERN SEABOARD AREA: This area covers the eastern part of Thailand, from Chacheongsao, Chonburi and Rayong to Prachinburi. The Eastern Seaboard area is located near Bangkok, Suvarnabhumi
Airport and Laem Chabang Deep Sea Port. This strongly benefits projects in the Eastern Seaboard area in term of logistics and reduces transportation costs.
FUTURE SUPPLY IN EASTERN SEABOARD AREA
DEVELOPER Amata Corporation PCL
INVESTMENT AMOUNT
PROVINCE
AREA (RAI)
Chonburi & Rayong
6,000
2,000
CP Land Co., Ltd
(THB Million)
Rayong
3,000
6,500
Wellgrow Industries Co., Ltd
Chachaengsao
100
NA
Thai Factory Development PCL
Chachaengsao
273
NA
Prachinburi
2,000
NA
Saha Group I.P. Hemaraj Land and Development PCL
Phase I – 2,000
Rayong
Phase II - 800
NA
Source : Colliers International Thailand Research
2. CENTRAL AREA: This area covers Bangkok and the surrounding provinces of Pathumthani, Ayuthaya, Saraburi,
Samut Sakon, Samut Songkram, Samut Prakarn, Singhburi and Nakorn Pathom.
FUTURE SUPPLY IN CENTRAL AREA
DEVELOPER
PROVINCE
AREA (RAI)
INVESTMENT AMOUNT (THB Million)
VRM Group
Ratchaburi
1,266
NA
Rojana Industrial Park PCL (existing land development)
Ayuthaya
1,800
500
Rojana Industrial Park PCL (new land purchasing)
Ayuthaya
300
100 - 200
Source : Colliers International Thailand Research
3. NORTHERN AREA: This area covers the northern part of Thailand. The industrial estates in this area are at Pichit
and Lamphun. No new supply will be added in this area this year.
4. NORTH EASTERN AREA: The Industry Ministry plans to close the industrial park in Khon Kaen to cut the burden on the Industrial Estate Authority of Thailand
(IEAT). Khon Kaen’s industrial estate, on 40 rais of land, has no customers.
FUTURE SUPPLY IN NORTH EASTERN AREA
FUTURE SUPPLY IN NORTH EASTERN PROVINCE AREA
DEVELOPER
Industrial Estate Authority of Thailand Source : Colliers International Thailand Research
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Khon Kaen
AREA (RAI) 500
INVESTMENT AMOUNT (THB Million) 4
The Knowledge Report | October | 2008 | Industrial Estate Market
5. SOUTHERN SEABOARD AREA: This area covers the southern part of Thailand, focusing on four provinces with potential, namely Surat Thani, Nakorn Si Thammarat, Chumpon and Pattani. A steel industrial estate was part of the Southern Seaboard project. A site for the Southern Seaboard industrial development is expected to be selected within this year and the development of a major
industrial area in the South is expected to take the pressure off the heavily industrialised Eastern Seaboard area. Potential industries on the new site include high-grade steel and furnace operations, petrochemicals and energy ventures.
FUTURE SUPPLY IN SOUTHERN SEABOARD AREA
DEVELOPER Sahaviriya Steel Industries PCL
PROVINCE
AREA (RAI)
Prachuabkirikun
6,000
INVESTMENT AMOUNT (THB Million) NA
Source : Colliers International Thailand Research
CURRENT SUPPLY The total supply at the beginning of the first half of 2008 was 104,279 rais. The supply in the Eastern Seaboard area accounts for 69,635 rais, the highest of the five regions, while the North Eastern area accounts for 4 rais, the lowest supply. The large supply in the Eastern Seaboard is due to BOI privileges in investment promotion zone 3, which was granted the longest term of corporate tax exemption and zero import duty on raw materials used in manufacturing export products. (See Appendix for full details of tax exemptions) In addition to BOI investment and promotion zone privileges, location is also a factor determining supply. The Eastern Seaboard area is well located near Bangkok, Suvarnabhumi Airport and Laem Chabung
and Map Ta Phut Deep Sea Ports. This strongly benefits projects in this area in terms of logistics and reduces transportation costs. The demand to expand production lines in the automobile industry is also pushing growing supply in the Eastern Seaboard. In addition, the central area, which accounts for the second-largest supply of 30,560 rais, also benefits from both Zone 2 and Zone 3 privileges. In the Northern area, Lamphun Industrial Estate is facing a shortage of supply as more companies decide to expand. However, a new supply of 100 rais is expected to be added at Ban Thi, Lamphun.
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The Knowledge Report | October | 2008 | Industrial Estate Market
FIGURE 1 : CURRENT SUPPLY OF INDUSTRIAL LAND PLOTS, AS OF 1H 2008
Southern Seaboard 1%
North 3% North East 0%
Central 29%
Eastern Seaboard 67%
North
Central
Eastern Seaboard
Southern Seaboard
Source : Industrial Estate Authority of Thailand, Board of Investment (BOI) and Colliers International Thailand Research
FUTURE SUPPLY There will be approximately 24,039 rais added in the supply of industrial estate land plots by 2010. The majority of supply will be added in the Eastern Seaboard area, with approximately 14,173 rais, follow by Southern Seaboard area and Central area, with approximately 6,000 rais and 3,336 rais respectively.
FIGURE 2 : FUTURE SUPPLY OF INDUSTRIAL LAND PLOTS ADDED BY 2010
Source : Colliers International Thailand Research
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The Knowledge Report | October | 2008 | Industrial Estate Market
DEMAND In the first half of 2008, the total take up was 77,018 rais. FIGURE 3 : CUMULATIVE TAKE UP OF INDUSTRIAL LAND PLOTS, AS OF 1H 2008
Source : Industrial Estate Authority of Thailand, Board of Investment (BOI) and Colliers International Thailand Research
The total take-up in the Eastern Seaboard area, consisting of 16 industrial estates, was highest, at 48,885 rais, followed by the Central area at 26,212 rais. The strong demand in the Eastern Seaboard area is due to the BOI investment zone privileges and the advantage of location. As the automobile industry continues to expand, the demand in the Eastern Seaboard area will continue to be strong as it is home to
105 major automotive supply line companies and foreign companies are looking to expand manufacturing plants in this area. The Central area also enjoys strong demand due to similar advantages of a convenient location close to Bangkok and a sea port, and available facilities.
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The Knowledge Report | October | 2008 | Industrial Estate Market
SAMPLE OF SALES TRANSACTIONS AND PURCHASE SILPS DURING THE FIRST HALF OF 2008
INDUSTRIAL ESTATE
COMPANY NAME / BUSINESS
AREA (RAI)
Amata Nakorn Industrial Estate (Chonburi)
Mitsubishi Heavy Industry
Sinsakhon Industrial Estate
VPP Progressive
90
Q2 2008
3,000
Q1 2008
Ratchaburi Industrial Estate
GS Energy Company Limited
62
Q2 2008
Amata Nakorn Industrial Estate (Chonburi)
Tai Mou Precision Industrial
NA
Q3 2008
Hemaraj Eastern Seaboard Industrial Estate (Rayong)
Suzuki Motor
412
Q1 2008
Amata Nakorn Industrial Estate (Chonburi)
CABTEC Thai Company Limited
19
Q1 2008
Amata City Industrial Estate (Rayong)
Sammitr Motor Manufacturing
100
Q1 2008
Eastern Seaboard Industrial Estate (Rayong)
BASF Chemical (Thailand)
NA
Q1 2008
Navanakorn Industrial Estate (Nakorn Ratchasrima)a
Honda
90
Jul - 2008
Eastern Seaboard Industrial Estate (Rayong)
Danieli Far East
121
Jul - 2008
Land outside industrial estate (Lamphun)
Metal Manufacturing
100
2008
Hemaraj Eastern Seaboard Industrial Estate (Rayong)
Fuserashi Company Limited
21
Jul - 2008
SIL Industrial Land
Thai Rayong PCL
20
Apr - 2008
Eastern Seaboard Industrial Estate (Rayong)
Mungmaichromium
20
Apr - 2008
Hemaraj Eastern Industrial Estate (Maptaput)
PTT Asahi Chemical
120
NA
Source : Colliers International Thailand Research
TOTAL TAKE UP OF INDUSTRIAL LAND PLOTS IN 1H 2008 BY INDUSTRIAL ESTATE INDUSTRIAL ESTATE
TOTAL TAKE-UP IN 1H 2008
Hemaraj Chonburi Industrial Estate
5
Eastern Seaboard Industrial Estate (Rayong)
263
Hemaraj Eastern Industrial Estate (Map Taphut)
0
Hemaraj Eastern Seaboard Industrial Estate (Rayong)
534)
Saraburi Industrial Land
92
Rayong Industrial Land
41
Amata Nakorn Industrial Estate (Chonburi) Amata City Industrial Estate (Rayong)
}
475
Gateway City Industrial Estate
10
Rojana Industrial Estate
300
Sinsakhom Industrial Estate
3,000
Ratchaburi Industrial Estate
62
Total Land Sales Source : Colliers International Thailand Research
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PERIOD
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4,782
The Knowledge Report | October | 2008 | Industrial Estate Market
OCCUPANCY RATE The Central area has the highest occupancy rate of 86%, while the Eastern Seaboard area has an occupancy rate of 70%, with the largest supply of 69,635 rais. In the Central area, Bangkok and Samut Prakarn have the highest occupancy rate, at 98% and 99%, respectively. In the Eastern Seaboard area, industrial estates in Rayong have the lowest occupancy rate of 68%, while Chonburi industrial estate has the highest occupancy rate of 80%. The occupancy rate in the Central and Eastern Seaboard areas are close to each other as the range of prices in
both areas and the benefits of both locations are similar. Although the North Eastern area has an occupancy rate of 70%, a little higher than the Eastern Seaboard area, this area offers only one industrial estate in Khon Khaen, which has a supply of 4 rais. In addition, the MOI plans to set up an IT industrial estate in Khon Khaen covering 500 rais as the manufacturing sector is suffering from the rise in energy costs. The new IT industrial estate will likely attract more businesses and increase the overall take up in the North Eastern area.
FIGURE 4 : OCCUPANCY RATE OF INDUSTRIAL LAND PLOTS BY LOCATION, AS OF 1H 2008
Source : Industrial Estate Authority of Thailand, Board of Investment (BOI) and Colliers International Thailand Research
PRICE The average SILPS (Serviced Industrial Land Plots) price in industrial estates ranges between THB 3 million and THB 4 million per rai. The highest price per rai is THB 7.5 million per rai in the Eastern Seaboard area at Wellgrow Industrial Estate, which has an occupancy rate of 94% due to its convenient location and excellent facilities, while the highest price in the North Eastern area is only THB 1.7 million per rai, the lowest of the five regions. The Eastern Seaboard and Central areas have a wide range of prices, from THB 600,000 to THB 7.5 million per rai due to the large number of suppliers. During the first half of 2008, the new takeup in the Central area, which has an available supply of 9,853 rais, was around 3,322 rais. The large reduction in available land and the strong demand in the Central area will likely push the price up in the near future. In addition, around 10 major companies in the Eastern Seaboard area acquired around 1,392 rais in the first half of 2008, due mainly to the expansion of Eco Car development. However, there is still a large amount of serviced industrial land available in the Eastern Seaboard area (20,747 rai), which will help reduce the increase in price in the short term, although, if demand remains strong, prices will likely increase significantly in the long term. Colliers International
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The Knowledge Report | October | 2008 | Industrial Estate Market
FIGURE 5 : SELLING PRICE PER RAI OF INDUSTRIAL LAND PLOTS BY PROVINCE, AS OF 1H 2008
Source: Industrial Estate Authority of Thailand, Board of Investment (BOI) and Colliers International Thailand Research
The trend in the price of SILPS will increase since land in Thailand is still at relatively low values. The SILPS at Hemaraj Industrial Estate increased by 5%, from THB 2 million per rai to THB 2.1 million per rai at the beginning of July, 2008. The average SILPS at Amata City Rayong stands at THB 2.3 million baht per rai, while the SILPS at Amata Nakorn increased to THB 4.5 million per rai from just THB 3.5 million per rai. OUTLOOK The industrial sector has consistently driven the country’s economic growth. The key factor in maintaining investors’ confidence and persuading foreign investors to invest in Thailand’s industrial estates is the estates’ quality of environmental management and their proven commitment to promoting the quality of life of the surrounding communities. Thailand has great potential to be a gateway to ASEAN. Although logistics costs in Thailand are still high compared with other countries, such as Japan, the US and Europe, Thailand will encounter increasing competition for its role as a manufacturing base. China is now considered the “world’s factory”, while Vietnam was seeing strong FDI until its recent problems. Vietnam was the top regional destination for investors due to its rapid economic growth, although the country’s economy has had a slight effect. To compete, Thailand will have to increase its attractiveness to potential investors through the use of tax privileges and better infrastructure, while developing human talent to provide a well-trained, readily available workforce.
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The government should move forward with plans to develop the Southern Seaboard area and expand industrial estate zones in light of the rapid growth due to the now-overcrowded Eastern Seaboard area in Chonburi and Rayong. The government is preparing to offer incentives to attract investment to the long-delayed Southern Seaboard area, aiming to complete the project within four years. The government will offer both tax and non-tax incentives for the development of infrastructure, including water supply and an industrial estate in the Southern Seaboard area. Chumphon, Nakhon Si Thammarat and Pattani are potential locations due to their close proximity to the deep-sea port. It is difficult to predict the trends in investment for the rest of the year due to the rapidly changing oil prices and global inflation. Political turmoil may not be the major concern for local or existing foreign investors, although it may affect companies that focus on selling their products in domestic markets and newcomers from overseas.
The Knowledge Report | October | 2008 | Industrial Estate Market
SUPPLY The total supply of SME factories, as of 1H of 2008 was approximately 1,142,730 sq m. Ticon is the developer of SME factories which accounts for the largest share of supply, accounting for 494,418 sq m, followed by TFUND and Hemaraj, accounting for 286,482 sq m and 146,030 sq m, respectively. TFUND
SME factories or manufacturing plants are standard factories for international companies who do not particularly want to develop their own factories, or even to own them in order to reduce their operation costs and risks related to any possible uncertainties. SME factories have been completely constructed and are offered for rent. SME factories are places either to manufacture goods or supervise machines procesing one product into another or the places for the storage of goods. SME factories are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs and etc. They are usually large plain buildings in industrial areas of cities and towns. The developer will offer to both rent and sell SME factories.
and TIF1 expanded their portfolios by acquiring freehold industrial properties from TICON and TFD respectively.
FIGURE 6 : CURRENT SUPPLY OF FACTORY FOR RENT BY SQ M, AS OF 1H 2008
Source : Colliers International Thailand Research
The total number of SME factories, as of 1H of 2008 was 549. The number of factories was highest at Ticon, with 179 factories for rent,
followed by TFUND and Hemaraj, accounting for 131and 76 factories, respectively.
FIGURE 7 : CURRENT SUPPLY OF FACTORY FOR RENT BY NUMBER OF FACTORY, AS OF 1H 2008
Source : Colliers International Thailand Research
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The Knowledge Report | October | 2008 | Industrial Estate Market
SUPPLY ADDED IN THE FIRST HALF OF 2008 BY SPACE (SQ M) There were approximately 216,064 sq m of 114 factories added in the first half of 2008. There was approximately 170,011 sq m of 81 factories added by TICON, followed by Amata, accounting for 24,593 sq m of 20 factories,
while the supply added in Hemaraj was approximately 21,460 sq m of 13 factories.
FIGURE 8 : SUPPLY ADDED IN FACTORY FOR RENT BY SQ M IN THE FIRST HALF OF 2008
Source : Colliers International Thailand Research
FUTURE SUPPLY There will be approximately 153 factories added in the supply of SME factories by 2009,
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with an approximate area of 316,296 sq m.
The Knowledge Report | October | 2008 | Industrial Estate Market
FUTURE SUPPLY OF FACTORY FOR RENT ADDED IN 2009
NO. OF FACTORIES
AREA (SQ M)
ESTIMATED COMPLETION
TICON
91
208,850
2H 2008 - 2009
AMATA
12
25,000
2H 2008
TFD
43
65,446
2H 2008 - 2009
HEMARAJ
7
17,000
2H 2008 - Q1 2009
DEVELOPER
Source : Colliers International Thailand Research
DEMAND Though the investment element in Thailand has been affected by political uncertainties, Thailand was still a top choice in the eyes of foreign companies when compared to several other countries in Southeast Asia. Investors are now concerned more about the market’s fundamentals than political risks. There is an increase in investment from small manufacturers favourable to rental factories’ demand. As small manufacturers tend to rent
SME factories rather than buy industrial land plots and build their own factories, we should see strong demand for SME factories, which would be positive to the SME factories market. The average occupancy rate of SME factories is 81.36%.
OCCUPANCY RATE OF FACTORY FOR RENT, AS OF 1H 2008
DEVELOPER
NO. OF FACTORIES
TOTAL AREA (SQ M)
LEASED AREA
OCCUPANCY RATE (%)
TIF1
26
43,578
34,917
80.13%
TFUND
131
286,482
248,497
86.74%
PINTHONG
55
73,949
69,246
93.64%
TFD
29
35,820
25,815
72.07%
TICON
179
494,418
405,033
81.92%
HEMARAJ
76
146,030
105,549
72.28%
AMATA
53
62,453
40,715
65.19%
TOTAL
546
1,142,730
929,772
81.36%
Source : Colliers International Thailand Research
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The Knowledge Report | October | 2008 | Industrial Estate Market
RENT
SME factories in Thailand still have competitive price advantages over other sites in the region. RENTAL RATE OF FACTORY FOR RENT, AS OF 1H 2008
DEVELOPER
RENTAL RATE (THB / SQ M / MONTH)
TIF1
200 - 220
TFUND
190 - 220
PINTHONG
120 - 150
TFD
200 - 220
TICON
190 - 220
HEMARAJ
200 - 210
AMATA
210 - 220
Source : Colliers International Thailand Research
OUTLOOK In 2008, Thailand’s economy was expected to improve due in part to the newly-elected Government, its fiscal stimulus packages and policies to promote investment. However, short-term political uncertainties have constrained growth, as has concerns related to the global economic slowdown, inflationary pressures and the credit crunch. As a result, the BOI net application value dropped 13.4% year-on-year (YoY) to Bt203.5bn in 1H08, while the number of projects seeking approval was flat at 640. The average size of the projects applying for BOI privilege declined 13.4% YoY to Bt318.3mn/project, compared with Bt367.6mn/project in 1H07. The average size of auto projects applying to the BOI in 1H08 was Bt157.5mn/project, dropping 37.8% YoY from Bt253.3mn/project in 1H07. The data validates our view that the investment projects applying for BOI incentives this year would be smaller, but the number of projects could increase from 2007. Thus, small projects should dominate the number of projects applying for BOI privileges in 1H 2008. Given their smaller scale of investment, many small-sized manufacturers may prefer renting SME factories instead of buying industrial land plots and constructing their own factories. This implies increasing demand for rental SME factories.
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The Knowledge Report | October | 2008 | Industrial Estate Market
APPENDIX: INDUSTRIAL ESTATE ZONING AND PRIVILEGES
Zone 1 Granting Tax and Duty Privileges
Industrial Estate
Zone 2
Outside Industrial Estate
Industrial Estate
Zone 3 (36 Provinces)
Outside Industrial Estate
Industrial Estate
Outside Industrial Estate
Industrial Estate
Outside Industrial Estate
Exemption
Exemption
Exemption
Exemption
8 years
8 years
8 years
8 years
50%
50%
reduction
reduction
3 years
-
7 years
3 years
Import duty on raw or essential materials
Exemption
Exemption
Exemption
Exemption
Exemption
Exemption
Exemption
Exemption
for export.
for 1 year
for 1 year
for 1 year
for 1 year
for 5 years
for 5 years
for 5 years
for 5 years
Will be
Will be
-
-
-
-
granted
-
granted
granted
privileges
privileges
privileges
Will be
Will be
Will be
granted
granted
privileges
privileges
Import duty on machinery. Corporate Income Tax Exemption.
Exemption
50%
Zone 3 ( 22 Provinces)
reduction
Will be Double deduction from transportation.
50% reduction in corporate income tax for 5 years. The project’s infrastructure cost is deducted. Duty on raw or essential materials used for domestic sales.
-
-
-
-
granted
-
privileges -
-
-
-
Will be
Will be
Will be
Will be
granted
granted
granted
granted
privileges
privileges
privileges
privileges
75% -
-
-
-
reduction for 5 years
75% -
reduction
-
for 5 years
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The Knowledge Report | October | 2008 | Industrial Estate Market
293 offices in 61 countries on 6 continents USA 99 Canada 19 Latin America 18 Asia Pacific 62 EMEA 95 US$ 2 billion in annual revenue 868 million square feet under management 11,048 Professionals
Contact information THAILAND: Patima Jeerapaet Managing Director
Risinee Sarikaputra Senior Manager | Research
Colliers International 17/F Ploenchit Center Klongtoey Bangkok 10110 Tel: 662 656 7000 Fax: 662 656 7111
This report and other research materials may be found on our website at www.colliers.co.th Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.
16 Colliers International www.colliers.co.th
w w w. c o l l i e r s . c o. t h
This report and other research materials may be found on our website at www.colliers.co.th Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.