As no new areas were added to the market after the second quarter, the vacancy rate dropped to 15.6 per cent, according to international property consultants CB Richard Ellis.

The Board of Investment said 359 projects were started last year, a 28-per-cent increase from 281 projects in 2004.

The investment value of these projects increased by 23 per cent to Bt102 billion, from Bt83 billion the year before.

James Pitchon, executive director of CB Richard Ellis Thailand, reported that the industrial-property market had grown last year as a result of international and Thai markets starting a new investment cycle, despite generally slowing economic growth.

He said the Manufacturing Production Index (MPI) and Intersection Capacity Utilisation (ICU) demonstrated this, with the majority of the foreign investment still coming from Japan.

The MPI averaged 148.9 points in January to November 2005, which was 6 per cent higher than the same period in 2004.

The ICU rate averaged 70.8 points in the fourth quarter, 2.4 per cent higher than the rate registered for the same quarter in 2004.

The highest growth for both MPI and ICU was for electronics and electronic products.

Pitchon said: "There has been no change in the asking price at most industrial estates and parks, quarter on quarter. However, we expect the serviced industrial land plot [Silp] prices to increase, because developers are purchasing additional land for expansion at higher prices. Increasing construction costs will also drive prices higher. Presently, some developers are trying to provide a discount by maintaining their prices."

Many developers are developing more Silps and ready-built factories (RBFs) to maintain an inventory of land for new industrial estates and expansion.

Demand for RBFs is growing as foreign companies seek to relocate or set up new production centres in Thailand.

CB Richard Ellis expects to see strong growth continue in the industrial-property market.