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News Release

Bangkok

Demand for Temporary Warehouse Rises as Companies Flock to Safe Locations


In the wake of the flooding that struck a number of major industrial estates despite strong protection, many companies with operations in industrial areas that are affected by floods or at risk of floods are looking for warehouses in safe locations to store goods and production supply, according to Jones Lang LaSalle, a professional services firm specializing in real estate.
 
Subyagorn Sansugtaweesub, Head of Industrial Agency at Jones Lang LaSalle, said, “An increasing number of companies operating in Bangkok and its vicinity are on the lookout for warehouse space where they can temporarily store goods, production supply, and equipment on a short-term lease basis. These companies are mainly semi-conductors and consumer goods manufacturers and logistics service providers whose facilities are located in areas that are flooded or at risk of floods, including Ayutthaya, Pathumthani and Nonthaburi.
 
Most of these companies are looking for warehouse space in locations that are currently identified as low-risk zones, especially in or nearest Bangkok. However, the supply of rental warehouse in the area is limited and thus demand for temporary warehouse is now shifting to provinces in the east and the south of Bangkok which have not yet been affected by floods and where warehouse supply remains available.
 
“Most companies are looking for the flexibility that would allow them to immediately relocate back to their facilities once the flooding recedes or move to a new location if the warehouse they are temporarily renting becomes flooded,” Mr. Subyagorn explained.
 
Jones Lang LaSalle has helped some of these companies secure their leases. In the most recent case, the firm secured a lease of 12,000 sqm of warehouse space on behalf of a logistics company whose facilities are now under water in Ayutthaya. The firm has also continued to receive an increasing number of inquiries for warehouse space.
 
“Although most owners offer their warehouse for long-term lease, many of them do not mind accepting short-term contracts due to higher rentals. Typical rental rates for warehouse space vary greatly between THB 80 and THB 170 per sqm per month depending on quality and location.  But on short-term leases, coupled with the strong demand, rentals of temporary warehouse are 30%–40% higher,” said Mr. Subyagorn.