_Thailand Warehouse Demand Surges Despite Soft Economy, Occupancy Reaches 88.9%
Thailand Warehouse Demand Surges Despite Soft Economy, Occupancy Reaches 88.9%
Bangkok, May 2026 – Thailand’s logistics property market demonstrated notable resilience in the second half of 2025, with demand for warehouse space strengthening despite a backdrop of uneven economic recovery and subdued domestic consumption. The national warehouse occupancy rate rose to 88.9%, marking an increase of 3.1 percentage points half-on-half, as leasing activity accelerated and newly completed supply was effectively absorbed by the market.
Total warehouse supply expanded modestly to 6.62 million square metres, up 1.9% from the previous half, while occupied space grew at a significantly faster pace of 5.6% to reach 5.89 million square metres. This divergence highlights a clear recovery in take-up momentum, with occupiers actively securing space in response to trade-related activity, inventory management needs, and operational adjustments within supply chains.
The improvement in demand was most evident across Thailand’s key logistics hubs. The Central region recorded the strongest increase in occupancy, rising by 5.6 percentage points to 92.0%, while the Bangkok Metropolitan Region maintained a high occupancy level of 92.6%. The Eastern Economic Corridor (EEC), a strategic industrial zone, also saw continued improvement, with occupancy rising to 83.5%, supported by sustained demand from export-oriented industries.
This positive performance comes despite broader macroeconomic signals remaining mixed. Thailand’s GDP growth improved to 2.5% in the fourth quarter of 2025, up from 1.2% in the previous quarter, supported by government spending, tourism recovery, and stabilising domestic demand. However, underlying economic conditions remained uneven, with manufacturing output continuing to contract and headline inflation remaining negative at around -0.5%, reflecting limited pricing power and cautious consumption.
Against this backdrop, logistics demand has increasingly been driven not by broad-based economic expansion, but by structural factors within the production and trade ecosystem. Export performance remained a key driver, with total export value reaching THB 2.22 trillion in Q4, while inventory levels returned to accumulation, signalling early-stage restocking activity. These dynamics have translated into stronger demand for warehouse space as businesses expand storage capacity and optimise distribution networks.
In particular, growth in logistics-intensive industries has played a central role in supporting demand. The electronics sector recorded strong production gains across key segments such as semiconductors and data-related components, while the steel industry and automotive-related sectors also contributed to increased requirements for storage, distribution, and inventory management facilities.
Despite stronger occupancy levels, rental growth remained relatively stable, with overall average asking rents increasing marginally to THB 161.7 per square metre per month. Landlords have maintained pricing discipline, supported by improving demand conditions, although rental upside remains measured due to the broader economic environment.
“What we are seeing in the logistics market today is not simply a recovery in demand, but a structural shift in how supply chains are being managed. Occupiers are becoming more focused on resilience, inventory positioning, and operational efficiency, which is supporting sustained demand for well-located, high-quality warehouse space despite broader economic uncertainty,” said Marcus Burtenshaw, Partner and Head of Industry Strategy and Solutions, Knight Frank Thailand.