Hard-hit CentralWorld tenants to get rental cut after protests
February 26, 2014 00:00
By BAMRUNG AMNATCHAROENRIT
Central Pattana (CPN), a listed developer arm of Central Group, will reduce the rental fees it charges its tenants at CentralWorld shopping plaza, which has been hit hard by the prolonged political movement.
Wallaya Chirathivat, CPN’s senior executive vice president for business development and construction management, declined to reveal how much the fees would be reduced, saying it would depend on how much an impact they have suffered during the crisis. Official talks with them will be launched in the near future.
Currently, there are 500 outlets in the complex offering luxury brands, services, and entertainment. The mall is in central Bangkok, which is a key base of anti-government protesters.
Many of CentralWorld’s tenants have bitter memories of the 2010 rioting, when Zen Department Store, part of the complex, was set on fire by red-shirt hardliners. They suffered losses when the entire complex was closed for about seven months for renovation.
After reopening, CPN cut rental fees by 20-30 per cent to ease the pressure on its tenants. The 30-per-cent reduction was given in the first year, and this was eased to 20 per cent after business confidence started to be restored.
Wallaya said that after the shutdown, it took a year for customer traffic at CentralWorld to return to normal.
This time around, CPN says it is considers the tenants its business partners, and consequently is willing to help them cope. To minimise business risk, meanwhile, the store has significantly strengthened its store security by checking the inflow of shoppers and cars.
Nattakit Tangpoonsinthana, |CPN’s executive vice president |for marketing, said CentralWorld |had suffered a 40-per-cent drop |in shoppers so far, especially foreigners. Travel inconvenience is the |main culprit. At present, 40 per cent of the shoppers at the complex are foreign.
However, CentralWorld’s woes are being offset by CPN stores outside protest-hit areas, which are showing healthy growth. CentralPlaza Grand Rama 9 has seen shopper traffic surge by 18 per cent, while CentralPlaza Ladprao has enjoyed an increase of 8-9 per cent and CentralPlaza Pinklao 5 per cent.
Yesterday, the firm announced it was going ahead with its plan to construct CentralPlaza Nakhonratchasima, costing Bt7 billion. The shopping complex will be located on 52 rai (8.2 hectares) outside the Nakhon Ratchasima city centre.
Construction will start this May and will be scheduled to open officially in early 2016. It will be CPN’s 28th shopping centre in Thailand and the fourth in the Northeastern region, after Khon Kaen, Udon Thani and Ubon Ratchathani.
It will also be one of the company’s three biggest projects in the provinces, the other two being in Chiang Mai and Hat Yai. It will be the biggest shopping complex in Nakhon Ratchasima, offering 400 outlets, and is expected to attract 50,000-60,000 visitors on weekdays and 70,000-80,000 on weekends. Nakhon Ratchasima is considered to offer big potential for CPN’s retail business, even as rivals already have a foothold there, especially The Mall. There is more room for growth in the future, driven by economic growth of 8 per cent per year, a rising trend of housing projects, planned infrastructure improvements including high-speed rail and double-tracking, and opening of the Asean Economic Community to connect to neighbouring nations.
The province has a population of more than 2.8 million, and that number passes 3.4 million if combined with nearby provinces such as Buri Ram and Chaiyaphum. Income per head is Bt71,405 per annum, and more than 5 million tourists visit every year.