Honda Automobile (Thailand) began full operations at its new 17.2-billion-baht plant in Prachin Buri's Rojana Industrial Park in March.

Thailand remains a prime destination for foreign investors thanks to its central geographical location in Southeast Asia and good connectivity to Cambodia, Laos, Myanmar and Malaysia, says property consultant Knight Frank Thailand.

The company expects to see a slow recovery in industrial land sales and demand for factory space given the state of the economy based on recent economic data showing signs of improvement.

Executive director Marcus Burtenshaw said he expected to see continued growth this year, specifically from new investment in the electronics, auto parts, food and renewable energy sectors.

While Japanese investment remains subdued, Knight Frank is starting to see increased activity from European and Chinese firms.

According to its research, the supply of serviced industrial land plots (SILP) was 151,194 rai at the end of 2015, increasing by 4,033 rai or 2.7% from 2014. On average, SILP supply has been increasing by 2-8% yearly since 2011.

Industrial land sales rose to 3,549 rai last year, an increase of 1,273 rai or 55.9% from 2014 when political strife hit sales. Foreign investors were increasingly cautious due to the political uncertainty.

Industrial estates in Bangkok, Samut Prakan and Bang Pakong boast the highest average selling price at 10.7 million baht per rai. This is followed by industrial estates in the Eastern Seaboard zone at 4.86 million baht per rai, and those in the northern zone (Pathum Thani-Ayutthaya) at 3.98 million baht per rai.

On average, industrial land prices increased between zero and 4.4%. The Northern zone recorded the highest growth in 2015 of around 4.4%, followed by the Eastern Seaboard with growth of 3.3%. From 2012-13, industrial land in Suvarnabhumi-Bang Pakong and the Eastern Seaboard region increased by 10% because it was unaffected by the 2011 floods; it also became highly sought by manufacturers and developers. Some industrial estates increased their asking prices by up to 25%.

The supply of ready-built factories last year was recorded at 2,745,232 square metres, an increase of 6.4% from 2,580,036 sq m at the end of 2014. From 2012-13, the supply increased massively in locations that were not affected by the floods.

Chon Buri includes the largest share of 30% of ready-built factories because it is home to many large industrial estates. It is also a key production hub for Thailand's massive automotive industry.

Samut Prakan has the second-largest share at 21% thanks to its convenient location at a halfway point between Laem Chabang port and Bangkok. The Eastern Seaboard commands the largest supply share in the rental factory market due to its proximity to Laem Chabang port and several industrial estates.

The ready-built factory occupancy rate was 73% at the end of 2015, a drop of 4.2% from 2014. This was mostly due to an increase in the rental factory supply since 2012 while demand growth has been consistently and relatively weaker. Demand for rental factory space at the end of 2015 was 2,002,988 sq m, an increase of almost 10,890 sq m from the previous year.

In 2015, the Suvarnabhumi–Bang Pakong zone, encompassing Bang Pakong, Samut Prakan, eastern Bangkok and Chachoengsao, enjoyed the highest occupancy rate of 90.3%, followed by the Eastern Seaboard at 73.9%. The occupancy rates of rental factories were lowest at 60.7% in Pathum Thani and Ayutthaya.

On average, the ready-built factory rental rate increased by 1.4% to 207 baht per sq m per month. Only the rate in Pathum Thani–Ayutthaya did not grow; in fact, the trend was to stay the same due to the lowest occupancy rate. The Eastern Seaboard commanded the highest rental rate of 227 baht per sq m per month owing to the fact that most factories are located inside industrial estates.

The asking rental rate was the highest in Chon Buri and Chachoengsao provinces at 250 baht per sq m per month. The second highest was in Samut Prakan and Rayong at 230 baht. The highest rate in Ayutthaya was 220 baht per sq m per month.