5 Factors to Consider when Renting a Factory or Warehouse in Thailand

Selecting a high-quality rental warehouse or factory is a fundamental step in a successful business establishment in Thailand. Your chosen rental factory and warehouse can convey your company's image, creditability, as well as branding to your employees, suppliers, and customers. Also, when you select the suitable premises, your employees can happily work in the workplace that they are proud of, and this can create positive effects on their work.

This article would examine four vital aspects of evaluating a rental factory and warehouse, and they would ultimately help you select the most suitable property for your operation. When searching for an excellent rental factory or warehouse, you must consider various aspects together, and they would differ according to the nature of your business operations. As a result, this article will present five essential factors when you select a rental factory or warehouse in Thailand. We hope our article can help you choose a viable rental factory and warehouse so that your chosen premises can help you achieve your business goals.

5 things to know when choosing a factory for rent and warehouses for rent

1. Principles for consideration of factories for rent and warehouses for rent

When selecting a rental warehouse or factory in Thailand, the first factor you have to consider is its location and how this location fits your business strategy. For example, your business may rely heavily on the transportation of goods. Or, your business requires you to move your products in and out of the facility frequently. Then, the location and its layout would play a critical role in your operation.  

The location of your rental factory or warehouse can foster easy and quick deliveries of your products to your customers. Also, your selected property can help lower transportation costs from your suppliers as well as inventory costs.

Moreover, the location of your property should have complete access to public utilities (electricity, water, internet, and sewage system).  It should have excellent connections to various transportation systems, such as expressways, airports, seaports, and public transport means. Most importantly, your location should not face the risk of natural disasters such as floods and fires.

Besides, the chosen factory and warehouse location should accommodate your future expansions. Since relocation costs are costly, you should evaluate the facility for the present as well as future uses. You have to examine its suitability for your future, and it should be able to accommodate your later expanded inventories and production lines.

2. Things to consider when finding the right warehouse or factory for rent

When you have discovered some potential locations, you should then evaluate the functionality of the rental factory or warehouse. You should weigh factors, such as the condition of the building, the parking areas, its size, height, loading capacity, loading bays, outside road width, and other functions necessary for your operations. It would also be very beneficial when the premises have access to a large pool of skilled laborers. You can quickly find the staff to begin your operations smoothly.

Moreover, it would help if you consider the local community, which your rental factory or warehouse locates. A suitable rental factory and warehouse should be in a highly industrialized zone. When your location is in an industrialized area, you are less likely to encounter conflicts with the locals.

The property should also have fire prevention mechanisms, such as fire alarms, smoke detectors, fire extinguishers, and sprinkles.  These vital components can help you confidently start or expand your business in Thailand because they can support business sustainability and help avoid future problems.

3. Factory lease agreements and warehouse rental agreements

After finding the right rental factory or warehouse, the third aspect you need to consider is the rental contract and its terms. The selected property should match Thailand’s zoning laws. For example, you can use some properties only for warehousing purposes. Or, you can use your rental factory only for certain types of businesses.  It would be worthwhile if you initially consult the experts to help you confidently find the right property.

Also, before you finalize the rental contract, the owner of the property should repair and renovate the property to be in a fitting condition. When damages to the property occur, the rental agreement should lucidly define whose accountability it is.  You should clearly understand the maintenance costs, utility costs, and other related costs. You should thoroughly check the facilities inside and outside. Because the duration of a typical factory or warehouse rental contract is at least three, you should scrutinize the conditions very carefully.

If you wish to learn more about Thailand's warehouse and factory rental contracts, you can read our article: 8 Things to know before entering into a factory lease and warehouse rental. Click.

4. Other underlying expenses

Aside from the rental rate, some landlords would charge other expenses on top of your rent. For example, they may charge you for common fees, parking fees, insurance premiums, and utility surcharges. You should comprehend these charges fully before engaging in the rental contract. Moreover, you may have to pay for other related taxes, such as value-added tax and property taxes, depending on the landlords’ conditions. You should consider these expenses before finalizing your rental decision so that you can select the most appropriate property.

You can read about the additional costs associated with factory rentals and warehouses in our article: 8 Significant Expenses Related to a Factory and Warehouse Rental in Thailand

Also, if you are interested in tax expenses related to factory and warehouse rental in Thailand, you can read our article:  4 Taxes Related to Factory Rentals and Warehouse Rental in Thailand.

5. Other issues to consider

After selecting a suitable property with plausible contract terms, the last aspect you have to consider is the creditability of the landlords. Unfortunately, various scammers would try to trick you into fallacious contracts so that they can collect the rental deposit and advance payments. They can pretend to be the owner of the rental property to deceive you for the deposit payments.

To counter this problem, you or your legal advisor should carefully investigate the ownership of the leased property and specifies the conditions in the contract thoroughly.

Also, your rental agreement should extensively cover unexpected events. For example, if a natural disaster occurs, whose responsibility is it, and to what degree? Or, for late rental payments, what penalties, if any, will the landlord apply? When you move out, to what extent, you have to do for renovation purposes? What conditions and charges alter if any, when you renew the lease contract? It will help if you ascertain these factors before finalizing your rental decision. If you do not have expertise in contracting, it would be best to have a lawyer help you to prevent future problems and conflicts.

We have written an article on scam methods in Thailand’s factory and warehouse rentals. If you wish to follow on the topic, please read this article: 5 Typical Scams in Factory and Warehouse Rentals.

In summary, we have illustrated five crucial factors when selecting a rental factory and warehouse in Thailand. You should take into consideration its location and its functionality. You should also be aware of the rental contract conditions, related charges, and creditability of the landlords. We believe these factors can help you make an informed decision in deciding on the right property. Your chosen property should make your investment worthwhile and help promote your business growth.

If you are interested in renting a high-quality factory or warehouses in Thailand, please feel free to contact us anytime. Our properties have complete functions, and they are in excellent locations. Plus, we support our customers with free repair services throughout the leases as well as a full range of customer support services. Our projects have high-security systems with 24-hour security guards, and CCTVs.

sources:  

https://www.nextplus.co.th/expert-tips/location-roi-evaluation-for-building-factory

 https://blog.shiphawk.com/5-factors-to-consider-warehouse-locations

http://bit.ly/2PgVD4g

http://bit.ly/3a4hvIG

http://bit.ly/39NhoB1

https://bit.ly/2xHXglN