Thai industrial real estate gains from US-China trade war

Chinese demand fuels sales of serviced industrial land plots

Shipyards in Bangkok. Travel mania/Shutterstock

Demand for Thai industrial property is on the rise, thanks to inflows of Chinese capital, according to a recent survey by CBRE.

Sales of serviced industrial land plots (SILPs) by major developers in Thailand rose 50 percent year-on-year in the fourth quarter of 2018, with around 1,000 rai (160 hectares) sold.

Demand stemmed from Chinese manufacturers looking to relocate to Thailand due to high tariffs on ‘made in China products’ as a result of the Sino-American trade war, developers reported to CBRE.

The Thai-Chinese Park by Amata alone accounted for 146 rai (23.4 hectares) of Q4 sales. The Thai industrial estates provider developed the SILPs especially for Chinese manufacturers.

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Last year, foreign direct investments (FDI) into the Thai manufacturing sector rose 130 percent year-on-year, the Bank of Thailand (BOT) reported.

Developers of SILPs on industrial estates are not the only ones gaining from China’s growing role in the Thai economy, pointed out Adam Bell, head of advisory & transaction services for industrial and logistics at CBRE Thailand.

“Chinese e-commerce companies are going to drive the demand for Modern Logistics Properties (MLPs) in Thailand,” he said.

WHA, one of Thailand’s biggest MLP developers, announced last year a joint venture with Chinese e-commerce giants Alibaba and to build e-commerce fulfilment centres.