Q1 retail property demand still strong despite political woes
May 23, 2014 00:00 By The Nation
Political problems at the end of 2013 and in the first quarter of this year affected the overall economy and all business sectors in Thailand, including retail, although local real-estate demand in that segment was still strong.
This is according to the latest data on the Bangkok retail property market from the Research Department of Colliers International Thailand.
Only 6,500 square metres of new retail projects were completed and opened in the first three months of this year, while more than 40,000 square metres were postponed to the current quarter, said Surachet Kongcheep, associate director of the department.
He said some retail centres could not be completed as expected in the first quarter, especially in the City area of Bangkok.
Meanwhile, the total retail supply in the Suburban Bangkok area was the largest, with around 3.5 million square metres or approximately 53 per cent of the total supply of Bangkok and surrounding areas.
This was due to the huge number of residential projects, which create the real demand for retail centres such as community malls and large-scale shopping malls in the Suburban Bangkok area.
Some 866,530 square metres of future supply is under construction and expected to be completed this year, with 559,140 square metres at shopping malls and 269,400 square metres at community malls.
Most community malls scheduled to be completed in 2014 are located in the Suburban Bangkok area, although some community malls in Bangkok are not successful and cannot maintain their initial popularity, he said.
The occupancy rates in all categories are above 95 per cent, except for supporting retail, which weighed in at 90 per cent.
Surachet explained that most retail centres in Bangkok had achieved a high take-up rate, especially those in the City area.
During the past one to two years, many international brands have been looking to open shops in Thailand, especially at shopping malls in Bangkok. In addition, many local Thai brands also continue to open shops in all areas of the country.
The occupancy rate in all locations continues to increase from 2012. The retail market has been growing during the past year, especially in Bangkok and all of the border provinces of Thailand, according to Colliers.
Many international and local brands and shops are looking for new space to accommodate their plans for expansion into existing retail centres and new retail centres that are under construction.
New retail centres are letting out space prior to completion, and most are already fully occupied. Retail developers and operators are relocating their tenants and adding more new brands into their retail centres to make them more interesting, he said.
Moreover, all of the big-name retail developers and operators are trying to add a new direct shopping channel for their customers with online shopping through website and smart-phone applications. They are also sending their promotional campaigns direct to customers via smart phone, he added.
Meanwhile, many shopping malls in Thailand, especially in Bangkok and some other tourist destinations, are trying to attract more high-end and luxury customers by adding more luxury brands – or adding some space for luxury brands only – for all demand, which continues to grow.