SET-listed developer Frasers Property (Thailand) (FPT) expects its industrial property business to reach a new peak in 2025, with revenue hitting 4 billion baht and the overall occupancy rate climbing to 91%, driven by strong demand.

Peerapat Srisukont, managing director of FPT's industrial business, said demand for industrial property, which has grown annually since 2022, is being propelled by US trade policies.

"US President Donald Trump's announcement of a tariff hike early last month presented a new challenge. The impact on the industrial property sector has been even greater than the earthquake in March," he said.

Following the announcement, Mr Peerapat said no one could predict how the situation would unfold.

Many investors adopted a wait-and-see approach as the US policy kept shifting. Just two days ago, the US and China agreed to slash tariffs during a 90-day pause.

"Despite these challenges, Southeast Asia remains an attractive destination for investors due to its geopolitical neutrality, skilled manufacturing workforce, and lower risks associated with relocating investments," he said.

The onset of the trade war several years ago triggered a major relocation of manufacturing bases and supply chains, resulting in a surge of foreign direct investment (FDI) into Southeast Asia, said Mr Peerapat.

FDI in Thailand, Vietnam and Indonesia, where FPT has invested in industrial properties, recorded a cumulative annual growth rate of 8.2% from 2019 to 2024.

Last year, Thailand recorded a 35% year-on-year surge in investment applications through the Board of Investment, worth a total of 1.13 trillion baht, the highest level since 2014.

This momentum carried over to the industrial property sector, with FPT recording industrial land sales of more than 300 rai to new customers within less than six months of its 2025 fiscal year, which commenced in October 2024. This represents a new record high and contrasts sharply with 100 rai of land sold to new customers during the whole of 2024.

The new customers were primarily Chinese, followed by Singaporean and Taiwanese investors in electronics and data centre businesses that wished to build their own factories rather than renting factories.

FPT has an industrial land bank totalling 5 million square metres across Bangkok, Samut Prakan, Ayutthaya, and the eastern provinces, which is sufficient to accommodate new demand, he said. Once a plot is sold, it typically takes around 10 months to complete factory construction.

In the first quarter of 2025, FPT recorded a new peak occupancy rate of 91% for its rental assets under management, up from 87% last year. Rental factories posted a new high for occupancy rates of 93%, while warehouses tallied 89%.

FPT recorded 3.44 billion baht in revenue from its industrial property business in the fiscal year that ended on Sept 30, 2024, and it expects it to rise to at least 4 billion baht in fiscal 2025.