Inside Thailand's Logistics & Industrial Market: Q2 2026 Update

FDI COOLS FROM A HIGH BASE, BUT THAILAND'S FUNDAMENTALS HOLD

Board of Investment (BOI)-approved FDI in Q1 2026 declined year-on-year, a trend Phongphan attributes to external headwinds rather than any loss of confidence in Thailand: global economic volatility, energy price pressure stemming from tensions in the Middle East, and lingering uncertainty around global trade policy. Easing US-China trade tensions have also prompted some investors to pause and reassess before committing to new projects.

Even so, Thailand continues to anchor regional supply chains in advanced technology, electronics, and data centres. BOI-approved investment remained concentrated in three source countries, which together accounted for close to 79% of total inbound FDI value:

• Singapore — THB 118,868 million (57%), led by three large data centre projects worth over THB 45,304 million and flexible/multilayer printed circuit board (PCB) manufacturing worth roughly THB 39,620 million.
• China — THB 24,422 million (12%), concentrated in High Density Interconnect PCBs and high-precision machinery components.
• Japan — THB 20,554 million (10%), maintaining its long-standing manufacturing footprint in Thailand.

Nearly all of this capital is flowing into industrial estates in the Eastern Economic Corridor (EEC), reinforcing the region's role as the country's principal production base.

INDUSTRIAL LAND TURNS SCARCE AS ABSORPTION OUTPACES NEW SUPPLY

The more consequential story, in Phongphan's view, is not the FDI headline but the land beneath it. Over the past four to five years, nationwide industrial estate land supply has grown by only around 8%, while demand for that land has risen by roughly 18% — a widening gap that has left little ready-to-sell land on the market.

Around 20,290 rai of new industrial estate land is scheduled for completion across 2026-2027, but the market broadly expects this pipeline to fall short of medium-term demand. As a result, the average nationwide industrial land price has climbed to approximately THB 8.4 million per rai, up around 7% year-on-year — though the pace of growth is now moderating.

Phongphan detailed that pipeline in a further interview with Bangkok Post: 8,996 rai of serviced industrial land plots (SILPs) across five estates developed by four companies is scheduled for completion in the fourth quarter of 2026. Three of the projects sit in the EEC — Amata City Chonburi 2 in Ban Bueng, Chonburi (2,213 rai); Amata City Rayong 2 in Ban Khai, Rayong (1,547 rai); and TFD Industrial Estate 2 in Bang Pakong, Chachoengsao (1,240 rai) — alongside Rojana Ayutthaya Phase 10 in Ayutthaya (2,296 rai) and Araya in Samut Prakan (1,700 rai). A further 8,890 rai is scheduled for 2027, led by WHA Eastern Seaboard Industrial Estate 5 in Rayong (6,490 rai, Q1) and WHA Saraburi Industrial Land 2 (2,400 rai, Q4), while Frasers Property Nong Suea Chang in Chonburi will add another 2,400 rai on a timeline yet to be announced.

Once this supply enters the market, Phongphan expects pricing to shift into what he calls a “price maintenance period”, with asking prices easing from last year’s peak rather than continuing to climb. The deceleration is already visible: SILP prices rose 4% year-on-year in the first half of 2026, after surging 10% in 2025 — the strongest annual growth in recent years, following increases of 6.72% in 2021, 9.45% in 2022, 2.16% in 2023, and 2.82% in 2024. Over the longer horizon, however, he still expects rising demand and land utilisation rates to support renewed price growth.

Land price growth is not driven by manufacturers alone. A portion of demand comes from investors acquiring land to develop facilities aimed at occupiers from their own country of origin — a dynamic that has itself become a meaningful driver of pricing.

“Land in industrial estates is becoming the scarce resource. The next cycle won't be measured by how many new factories are built, but by who holds quality assets.”

A WATCH-POINT: IRREGULAR LAND HOLDINGS BY FOREIGN CAPITAL

Positioning Magazine's interview surfaced a related and more sensitive theme: a segment of “grey” Chinese capital that had earlier acquired land in and around existing industrial estates — in some cases for uses inconsistent with stated purposes, and in others to develop private estates leasing factories and warehouses back to occupiers from the same country of origin. Following stepped-up government inspection, a portion of this capital has been compelled to divest, releasing land parcels ranging from 2-3 rai up to 100-200 rai, mostly concentrated in Chonburi and Rayong since late 2025. Some operators reportedly continue to use Thai nominee shareholding structures to work around the 51% foreign ownership threshold.

The resulting flow of second-hand land onto the market is expected to keep prices in Chonburi and Rayong comparatively steady over the next one to two years, rather than repeating the sharp run-up seen in 2024-2025 — a dynamic worth monitoring closely given its implications for pricing and for regulatory oversight of land use within estates.

Speaking to Bangkok Post, Phongphan added that some foreign investors entering Thailand have acquired land for property development rather than industrial operations — particularly projects intended to serve businesses from their own countries. Some of these operators have since ceased operations and no longer hold the land, while others remain active or have passed regulatory scrutiny. He urged Thai authorities to continue monitoring these activities, noting that the public can also help report suspected irregularities where enforcement by central agencies may not always be timely.

Cushman & Wakefield Thailand's H1 2026 media briefing, where the industrial and logistics market outlook was discussed.

READY-BUILT FACTORIES AND WAREHOUSES: RENTS TURN UPWARD

DATA CENTRES OPEN A NEW DEMAND FRONT BEYOND CHONBURI

Surachet Kongcheep noted that the market has moved past the peak growth phase driven by the earlier wave of production relocation, with foreign investment activity now normalising rather than accelerating as it did previously. Even so, demand remains structurally sound: land within core estates in Chonburi — long the EEC's primary industrial hub — is now running short, pushing new projects, especially data centres, toward adjacent provinces with stronger power and water infrastructure, including Chachoengsao, Prachinburi, and Samut Prapan. Data centres require large, stable electricity supply and substantial water resources, making infrastructure readiness a decisive factor in site selection as Chonburi's land and water resources become more constrained.

Both Phongphan and Surachet expect Thailand's data centre pipeline to have several more years of runway, contingent on infrastructure — particularly power and water — keeping pace with investor requirements.

OUTLOOK FOR THE SECOND HALF OF 2026

Looking ahead, Cushman & Wakefield expects occupancy and rental rates across industrial land, factories, and warehouses to keep trending upward through the remainder of 2026, supported by a limited construction pipeline that allows available space to be absorbed quickly, alongside continued investment in technology, digital, and high-value manufacturing. Three factors bear close watching in the second half of the year:

• Global economic uncertainty
• Geopolitical volatility
• Rising competition from lower labour-cost neighbouring countries, alongside more aggressive tax incentive regimes

Cushman & Wakefield Thailand's Logistics & Industrial team outlining what to expect in H2 2026.

Despite these headwinds, Thailand's broader position as a core Southeast Asian manufacturing base remains intact. As land becomes the scarcer resource and new supply continues to lag demand, the defining question for the industrial property cycle ahead is no longer how much is being built, but who holds the quality assets — and Cushman & Wakefield expects bargaining power to keep shifting from tenants to project owners as 2026 progresses.