The ready-built warehouse and factory rental market is shifting to favour landlords as limited new supply, steady foreign investment and rising occupancy enable developers to gradually increase rental rates.
Phongphan Phloiphet, director of logistics and industrial at property consultancy Cushman & Wakefield Thailand, said the market has entered a more stable recovery after 1-2 years of improving demand.
"Rental rates have continued to edge up as demand gradually increases, while no new warehouse or factory supply entered the market in the second quarter," he said.
According to the consultancy, total ready-built factory (RBF) supply remained unchanged at 3.42 million square metres during the second quarter of 2026.
Occupancy of RBF increased slightly from the previous quarter to 89.6%, reflecting continued absorption despite the absence of new completions.
Ready-built warehouse (RBW) supply also remained unchanged at 6.05 million sq m, as no additional projects were completed during the quarter.
Warehouse occupancy rose to 85.3%, up about one percentage point from the first quarter, supported by expanding demand from manufacturers and logistics operators.
Mr Phongphan said tighter supply has allowed landlords to gradually regain pricing power after several years of tenant-driven market conditions.
Average asking rents for RBF increased to 196 baht per sq m per month in the second quarter from 194 baht in the previous quarter.
RBW rents rose to 160 baht per sq m per month from 158 baht in the first quarter, continuing a gradual upward trend.
"The return of rental growth reflects stronger occupancy and healthier market fundamentals," he said.
"The market is becoming more balanced and gradually shifting towards landlords."
Well-located, modern warehouses and factories are benefiting the most, as tenants increasingly prioritise operational efficiency and quality facilities over rental discounts, said Mr Phongphan.
The improving rental market is supported by continued investment from both foreign and domestic manufacturers seeking production and logistics space despite global economic uncertainty.
Although foreign direct investment approved by the Board of Investment declined year-on-year in the first quarter, demand for industrial space has remained resilient, particularly among existing manufacturers expanding operations.
He said he expects occupancy to continue improving through the remainder of 2026, especially in the RBF segment where new supply remains limited.
Continued absorption of vacant space is likely to support further rental growth as competition from newly completed projects remains relatively low, said Mr Phongphan.
"The market has clearly entered a recovery phase," he said.
"If current demand continues while supply remains constrained, landlords should see further improvements in occupancy and rental income during the rest of the year."
