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Industrial • Commercial

Understanding Factory Rental Market in Thailand: Categories and Benefits

January 12, 2024
With Thailand's economy bouncing back after the pandemic slump, the search for a factory for rent has never been more opportune. However, as you embark on your search, it's essential to have a clear understanding of the factory rental market in Thailand.
Image | CBRE

With Thailand's economy bouncing back after the pandemic slump, the search for a factory for rent has never been more opportune. However, as you embark on your search, it's essential to have a clear understanding of the factory rental market in Thailand, which is primarily divided into two categories: Ready Built Factories (RBF) and second-hand factories. Each option presents distinct advantages and drawbacks that should be carefully considered when making the crucial decision of securing the right space for your business.

Ready Built Factories (RBF): Purpose-Built for Efficiency and Convenience

Ready Built Factories, or RBFs, are purposefully constructed by developers with the sole intention of leasing them out to manufacturers. These factories adhere to standard specifications, boasting features such as non-raised floors, 2-3 ton floor loading, 7-9 meter height, and standard-sized loading doors. RBFs are typically located inside designated industrial areas and come in sizes ranging from 1,000 sq. m. to 5,000 sq. m.

One of the key benefits of leasing from the more well-known developers such as WHA, Amata Summit, Frasers or Prospect is the convenience and ease they offer, backed by their extensive experience in the industry. However, it's worth noting that many developers have shifted their focus to BTS (build-to-suit) or pre-lease projects, causing a slowdown in the development of new RBF projects. As a result, the availability of RBF facilities in highly desirable locations is currently limited or simply not available.

Second-Hand Factories: Uncovering Hidden Gems with Customization Potential

Second-hand factories, on the other hand, are previously owned by manufacturers who no longer require the space. Leasing a second-hand factory can be an attractive option, especially considering the limitations in the availability of RBFs. These factories are often older, and while they may require renovations to suit modern operations, they present unique customization opportunities.

It's important to note that when considering this type of factory for rent in Thailand, due diligence is crucial. Lessees should conduct thorough assessments of the title deed, zoning regulations, building conditions, and ability to acquire factory/operational licenses to ensure compliance and mitigate any potential risks. Furthermore, it's worth mentioning that owners of second-hand factories may lack experience in the role of a landlord, which can occasionally lead to challenges for lessees. However, the second-hand market provides greater flexibility in terms of location and customization options, as these factories are not restricted to specific areas or standardized specifications.

factory for rent

Navigating Challenges and Seizing Opportunities

While second-hand factories do come with their own set of challenges, such as the need for due diligence and less experienced owners, the limited availability of RBF facilities in highly sought-after locations leaves many businesses with no choice but to explore the second-hand market. With rising demand and a lack of new supply, finding a suitable factory for rent in Thailand has become increasingly difficult.

When determining the right option for your business, several factors come into play. Location is a critical consideration especially if your operations require proximity to certain areas or transportation hubs. Additionally, the specific needs of your business, such as customization options or specialized infrastructure, should be taken into account. If your business necessitates a specific location or unique customization options, leasing a second-hand factory may be the most viable choice. Conversely, if convenience and a streamlined leasing process are paramount, working with well-established developers specializing in RBFs or BTS may be the way to go.

Benefits of Renting a Factory in Thailand

Renting a factory in Thailand can be a smart decision for businesses looking to start or expand their operations. With its strategic location and well-developed infrastructure, Thailand offers numerous benefits for manufacturers, such as government offered tax incentives and other considerations to attract foreign investment. Regardless on if it is a second-hand factory or an RBF facility, a factory for rent in Thailand allows businesses to avoid the high upfront costs of building a new facility. With excellent transportation networks and access to international markets, making the choice to be located here is ideal for organizations looking to domestically transport and export their products. Overall, renting a factory in Thailand can help businesses save money, reduce risk, and expand their operations in a cost-effective manner.

Now is the time to get in on the factory rental market in Thailand. Your business deserves to grow. Take this opportunity to find the perfect RBF facility or second-hand factory in the ideal location. Our team of experts at CBRE Thailand are ready to assist you in finding and securing the exact factory space that aligns with your requirements and helps drive your business forward.

Contact CBRE today for more information.

For more information or questions, please contact:
Image | CBRE
Adam Bell
Head of Industrial
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