News Release

Knight Frank Thailand Reveals The highest Factory Rental Rate Growth Was Seen in
the Eastern Seaboard

Highlights
Industrial land sales dropped to 2,276 rai, the lowest in the past few years. There were only 937 rai in H1 2014 and
1,339 in H2 2014 due to political unrest.
Factory occupancy rates stood firm at 77.6% in H2 2014, a reduction of 0.1% year on year.
The highest factory rental rate growth was seen in the Eastern Seaboard with an increase of 5.6%, however, the
rental rates in Pathumthani Ayutthaya, and Suvarnabhumi Bangpakong remained stable.

Serviced Industrial Land Plot

Supply

Source: Knight Frank Thailand Research

According to Knight Frank Thailand Research, at the end of 2014, the total supply of Serviced Industrial Land Plot (SILP) was
at 140,841 rai, increasing by 3.1% from the previous year. On average, the SILP supply has increased by a steady 2 to 5%
each year.

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Use of Industrial Estate Land Area in 2014 Classified by Industry

Thailand produces more cars than any other ASEAN nation. It is amongst the 10 largest car producers in the world, thanks to
policies that nurture and support the local automotive industry. Currently, Thailand commands up to 55% of ASEANs total car
production. As one of the countrys most important economic drivers, the automotive industry is currently occupying up to 15.7%
of the total industrial estate land.

S
Source: Industrial Estate Authority of Thailand

Future Supply

Industrial Estate Province Size (Rai) Completion

Pinthong Industrial Estate 4 Chonburi 653 2015
Pinthong Industrial Estate 5 Chonburi 1,472 2015
Hi-Tech Kabinburi Prachinburi 1,066 2015
Lamphun Industrial Estate Lamphun 370 2015
Amata Nakorn Industrial Estate (Expansion) Chonburi NA 2015
Baan Bueng Pattana Industrial Estate Chonburi 1,700 2016
Rayong Industrial Estate (Ban Khai) Rayong 1,300 2016
Hemaraj Rayong 36 Industrial Estate Rayong 1,232 2016
Hemaraj Chonburi 2 Industrial Estate Chonburi 3,160 2016
Asia Industrial Estate Suvarnabhumi (Expansion) Samutprakarn 2,000 NA
Source: Knight Frank Thailand Research

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More than 140,000 rai of industrial land are under development, and most of the future supply is in the Eastern Seaboard Zone,
which benefits from its proximity to Laem Chabang port and a flood-free location. Within this year, nearly 4,000 rai are expected
to be ready.

Demand

Source: Knight Frank Thailand Research

In 2014, industrial land sales were 2,276 rai, the lowest level in the past few years. There were only 937 rai in H1 2014 and
1,339 in H2 2014, due to delays in BOI investment approvals, due to the absence of the relevant committee since late 2013 to
mid-2014. After mid-2014, the land sales volume was expected to recovery; however, foreign investment sentiment was still not
improving.

Industrial Land Price

(Million THB / Rai) % change

Industrial Land Value by Zone
2011 2012 2013 2014 2013 2014
Bangkok - Samut Prakarn - Bangprakong 8.45 9.30 10.08 10.44 8.33% 3.64%
Northern Zone 3.75 3.63 3.78 3.82 4.13% 0.88%
Central Eastern Zone 2.26 2.49 2.68 2.79 7.53% 4.26%
Western Zone 2.83 2.83 2.86 2.90 1.33% 1.31%
Eastern Seaboard Zone 3.76 4.03 4.66 4.71 15.53% 1.23%
Source: Knight Frank Thailand Research

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Source: Knight Frank Thailand Research

In 2014, the overall SILP asking price increased by 0.9% from last year, to 4.3%. Industrial land in the every Zone enjoyed
pricing growth. SILP prices on the Central Eastern Zone recorded the highest growth, which saw average prices increase by
4.3%. Pricing growth in 2014 was not as much as the growth in 2013, due to political unrest that affected industrial land demand
as indicated in the drop of the industrial land sales volume.
Location, proximity to the port, logistics facilities and infrastructure, labour sources and flood risk are the key factors that affect
industrial land prices.

Factory Rental Market

Supply

Source: Knight Frank Thailand Research

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The total supply of rental factory space at the end of 2014 was 2,553,046 square meters, increasing from last years supply by
88,577 square metres, representing a growth of 3.6%. A significant increase in the supply was observed right after the major
floods of 2011 in Thailand, where factories were developed to accommodate new demand in areas unaffected by flooding.
The rental factory supply did not increase aggressively in terms of warehouse supply, due to the limitation of land use
regulations requiring a license for factory operations.

Supply by Provinces

Source: Knight Frank Thailand Research

Chonburi province has the largest share of the total rental factory supply at 30%, with a total rental factory space of 775,636
square metres. Samutprakarn has the second largest share at 20%, with 517,452 square metres. The third and the fourth
largest shares go to Rayong at 19%, and Ayutthaya at 17%. The Eastern Seaboard in Chonburi and Samutprakarn provinces
boasts the largest supply of factory leasable space, as those areas are major locations of various industrial hubs and more
particularly, they are home to Thailands automotive industry.

Future Supply

Based on announcements from major industrial developers, it is expected that there will be a total additional space of 150,000
square metres in Samutprakarn, Chonburi, Rayong and Prachinburi in 2015.

Demand

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Source: Knight Frank Thailand Research

The current occupancy rate is 77.6%, a reduction of 0.1% compared to the rate at the end of 2013. This was mostly due to an
increase in the rental factory supply in 2014. The total demand for rental factory space at the end of 2014 was 1,980,108 square
meters, an increase of 64,693 square meters from the previous year.

Source: Knight Frank Thailand Research

The occupancy rate in the Suvarnabhumi Bangpakong and the Eastern Seaboard continues to perform better, with the
occupancy rates of 93.6% and 81.3%, respectively. This is mostly due to higher demands within the area, which is located
within the close proximity of many industrial estates, Laem Chabang deep seaport and Suvarnabhumi International Airport.

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Suvarnabhumi Bangpakong has a high level of occupancy as the supply in this area is limited and the available land to
develop rental factories is less than that of the Eastern Seaboard. The occupancy rates in Pathumthani and Ayutthaya are still
lower than the market average at 60.8%; however, recent data shows signs of recovery.

Rental Rate

Source: Knight Frank Thailand Research

The average factory rental rate was 205.4 THB/sq.m./month, increasing by 2.7% Y-o-Y. The Eastern Seaboard Zone
commanded the highest rents of 224.8 THB/sq.m./month, followed by 200.7 THB/sq.m./month in Pathumthani Ayutthaya, and
174.6 THB/sq.m./month in Suvarnabhumi Bangpakong.
The highest rental rate growth was seen in the Eastern Seaboard with an increase of 5.6%; however, the rental rates in
Pathumthani Ayutthaya, and Suvarnabhumi Bangpakong remained stable.
Suvarnabhumi Bangpakong generally has lower factory rental rates, as most of the rental factory space is not located inside
industrial estates; moreover, land inside the industrial estates in this area is quite scarce.

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Rental Rate by Provinces

Source: Knight Frank Thailand Research

The asking rental rate is the highest in Chonburi and Chachoengsao provinces at THB 250 per square metre per month. The
second highest is in Samutprakarn and Rayong, where the fee is at THB 230 per square metre per month. The highest rate in
Ayutthaya is at THB 220 per square metre per month. Provinces unaffected by the floods, such as Chonburi, Chachoengsao,
Samutprakarn and Rayong, command the highest rents.

Outlook
In 2014, Thailands industrial property market was weakened as a result of the negative domestic circumstances. However,
Thailand is still attractive to investors, with advantages of a high level of infrastructure, geographic location in the middle of
Southeast Asia, special tax incentives, and a skilled labour force. Moreover, the launch of the AEC is expected to bring positive
changes to Thailand.

We expect growth in demand from both domestic and international companies, including small, medium-sized, and large
enterprises, reflecting the need for industrial property and the growth in the automotive industry from Eco Car Phase 2, which
strengthens Thailands position as the key automotive manufacturing base in ASEAN.

We also expect to see industrial land values increase in the Eastern Seaboard and Samutprakarn, as these locations have
limited supply.

For further information, please contact:

Chompoonud Phienpanij, Marketing Communication and PR Manager, +66(0) 26438223 Ext 138 Mobile: +66 (0)81-901-6333
Ends

Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New
York-based global partner, Newmark Knight Frank, operate from 370 offices, News Release in 55 countries, across six
continents. More than 12,000 professionals handle in excess of US$1 trillion worth of commercial, agricultural and residential
real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate
tenants. For further information about the Company, please visit www.knightfrank.com.
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No: 15pr01

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