Global relocation trend to boost industrial sector assets in 2024
Thailand's industrial estate sector is expected to stand out from other property assets this year, thanks to the global relocation trend and the continued growth of e-commerce, Thanapol Sirithanachai, Country CEO of Frasers Property Thailand (FPT), said on Tuesday.
The comments came as he revealed the company's 2024 strategic growth roadmap, which focuses on portfolio balancing, using technologies and innovation to improve services, and achieve its net zero goal by 2050.
He explained that the overall Thailand property industry, which includes residential, industrial, and commercial properties, would expand modestly this year. However, as supply exceeds demand, competition in the industry will appear to increase, while new property projects, particularly in housing, will continue to be seen.
The derisking and relocation trend, combined with the government's supportive policies and incentive measures, has piqued foreign entrepreneurs' interest in Thailand's industrial estate, he noted.
“The industrial business is set to generate robust recurring income from leasable property, involving an investment of 4 billion baht to expand its assets under management to more than 150,000 square metres, adding to the current 3.5 million square metres of space across Thailand, Indonesia and Vietnam, with a target rental occupancy rate of 87%," Thanapol said.
He added that in the next two years, FPT is set to grow its asset under management target to 4 million sqm.
He noted that third-party logistics companies are the most interested in using Fraser Property Thailand's industrial estate, followed by modern trade, automotive, and electronic businesses.
In terms of its 2024 target, FPT hopes to generate more than 13 billion baht in revenue from its residential business by launching seven projects worth a total of 11.6 billion baht, focusing on the detached and luxury housing markets.
The commercial business also remains strong, with Grade A office buildings in central business districts and high-traffic retail spaces such as Samyan Mitrtown and Silom Edge recording a 93% rental occupancy rate.
Furthermore, he believes that FPT will continue to grow steadily due to its flexible and agile business strategy, strong financial position, and diverse, multi-asset portfolio that contributes to a consistent revenue stream ranging from development sales to property leasing services.
By 2027, the company expects to generate more than 30 billion baht in revenue, with a 40:60 asset-to-recurring income ratio, reflecting a commitment to long-term growth under a world-class real estate brand.
In order to maintain market leadership and resilience, he emphasised the need to pursue new growth opportunities by evolving into a “Real Estate as a Service” brand based on its “FPT Next 2025” roadmap, which features three operational pillars: space, community, and sustainability.
Despite positive factors supporting FPT’s growth this year, he pointed out that certain economic headwinds, such as high inflation, high interest rates, rising household debt, and increasing geopolitical tensions in Ukraine and the Middle East, must be closely monitored.
Frasers Property Limited is a global investor, developer, and manager of real estate products and services throughout the property value chain. The Group, headquartered in Singapore, had total assets of approximately S$39.8 billion as of September 30, 2023.
Currently, the company operates in five asset classes: commercial and business parks, hospitality, industrial & logistics, residential, and retail. The Group has operations in Southeast Asia, Australia, the EU, the UK and China, and its well-established hospitality division owns and/or operates serviced apartments and hotels in over 20 countries and 70 cities in Asia, Australia, Europe, the Middle East, and Africa.
