Glut of warehouse space restricts rates

Despite growth in the industrial property sector, the market for warehouses outside industrial estates has slowed, as large users like e-commerce companies increasingly invest in their own facilities, according to property consultancy Cushman & Wakefield Thailand.

- KANANA KATHARANGSIPORN

Phongphan Phloiphet, director of logistics and industrial, said warehouses outside industrial estates were in oversupply in the third quarter, with some recording vacancy rates as high as 30-40%.

"Competition among logistics players over the past 1-2 years has driven down service fees, putting pressure on warehouse rental rates. Some operators have exited the market, leaving an oversupply of space," he said.

Large e-commerce companies, which are major warehouse users, have increasingly invested in their own facilities rather than relying on third-party operators, further increasing available warehouse space.

Mr Phongphan said the warehouse market saw heavy investment over the past three years, largely driven by Chinese investors.