Industrial Property Types in Thailand

Only Thai or majority Thai-owned companies can buy land except in two circumstances:

A wholly foreign-owned company can buy land on an industrial estate i.e. one managed by the Industrial Estate Authority of Thailand.

A wholly foreign-owned company can purchase land anywhere if they receive BOI privileges that include the right to buy land. The land can only be used for the manufacturing process for which privileges have been granted.

There are three choices of locations to establish a factory:

• Industrial Estates
• Industrial Parks/Zones
• Green Field Sites

1. Industrial Estate
An industrial estate has a specific definition in Thailand. Industrial estates are Serviced Industrial Land Plots (SILP) which are developed or managed by, or in joint venture with, the Industrial Estate Authority of Thailand (IEAT). The IEAT is a government organization.

The main advantages to locating on an industrial estate are:

• 100% foreign owned companies can buy land.
• Industrial estates offer a (one-stop shop) service with the IEAT processing all approvals, such as construction permits and factory licenses. Industrial land plots are available with sufficient utilities ready to be connected, such as water, power and telephone lines. All industrial estates have waste water treatment plants on site.

There are a total of 29 industrial estates under IEAT supervision.

2. Industrial Parks/ Zones
Industrial parks are Serviced Industrial Land Plots developed without the IEAT. Majority foreign-owned companies can only buy land here if they have BOI privileges.

Industrial parks/zones are developments which are privately owned, developed, marketed and managed. Since they are not linked to the IEAT, industrial investors cannot be granted privileges from the IEAT.

Physically, industrial parks/zones are quite similar to industrial estates but the quality of the development and management is not regulated by the IEAT, relying instead on the developer.

Some industrial parks/zones may be authorised to approve construction permits themselves.

Land purchasers rely on the developer for assistance in obtaining building permits, etc., rather than having the security of government-run IEAT assistance in securing approvals.

3. Green Field Sites
It is possible for a majority foreign-owned company to purchase a green field site, but only if they have BOI privileges.

The disadvantages of purchasing a green field site are the additional costs of land preparation and connection to utilities. It is also possible that some green field sites may not have access to basic public utilities provided in some other areas.

In addition, purchasers must secure all necessary permits themselves and so must deal with the many relevant authorities or government agencies.

Even though the original land costs may be lower than an estate or park, the additional costs and time needed to secure permits means that most foreign companies acquire land on industrial estates.

There are approximately ten categories of land title deeds in Thailand which must be carefully examined.

There are also two other industrial property options:

4. Warehouses and Distribution Centres
There are only a limited number of modern warehouses and distribution centres available for sale and rent. The most common type of warehouse is a stand-alone single storey building, usually located outside an industrial estate or park, with a floor loading capacity of 2-3 tons per sq.m. and a clear height of 6-8 metres. These warehouse buildings generally do not have loading docks.

There are now several companies which provide build-to-suit solutions for logistics companies. These facilities can be situated on industrial estates and parks or on green field sites.