Trend and Movement of Retail Market in Bangkok

Real Estate Press Releases Wednesday August 8, 2018 13:37
Bangkok--8 Aug--Agate Communication

Thailand's economy is projected to pick up further over the forecast period. Retail Market is one of the most sophisticated real estate market. In the past years, retail market in Thailand has expanded increasingly, rapidly and aggressively while many shopping malls in many countries have been affected by online shopping and dramatic changes in consumer behavior but Thailand seems not to.

The retail market in Thailand continues to expand and of course, Bangkok. There are new retail developments ranging from the small to the mega end of the spectrum each year.

After a long whiles, since Siam Paragon opened in 2006, followed by big renovation in the most of the shopping malls, in 2015, 2 luxury shopping malls have been launched on Ploenchit Road and Sukhumvit Road. The retail market in Bangkok has been highly competitive, especially in prime areas, the vacancy rate is lower than 5% and rental rate is increasing significantly while tenants have been lining up for available space. Food and Beverage are the most increasing in demand thanks to social media, such as Facebook and Instagram, as many international and local brands enter the market by its popularity. Besides, tourist arrivals have also boosted the retail sector, with retail sales growth of 11.66% in last year according to Ministry of Tourism and Sports.

The newest supply entering Bangkok Center Retail District (CRD) was Gaysorn Tower. Net lettable area is 10,000 square meter with the highest rental rate at THB3,500 psm/mo at the opened time, made the total supply in Bangkok CRD to 660,000 sqm. The average rental rate was THB3,900 sqm/mo same as previous year. The occupancy rate in Bangkok CRD was 96.4%.

Nevertheless, limited new supply will be added-in as a result of the dramatically increasing of land price that drive developer consider more on lease land plots. Future supply is expected to be found more in Bangkok Fringe and Urban area.

There are many kinds of business categories such as food and beverages, medical center, surgery clinic, and health & wellness. Surprisingly, consumer behavior has greatly changes. Many retail operators have though to open their business 24 hrs and some operators already does.

Mr.Teerawit Limthongsakul, Managing Director of Nexus Real Estate Advisory stated that "There are a lot of enquiries about 24 hours business such as coffee shop, restaurant, co-working space, and lifestyle entertainment. I found it is interesting opportunity for any business to operate 24/7. Retail market wouldn't be the same, it will be more accessible and lively."

Lifestyle platform has changed, technology becomes norm, and healthy trends have become significant trendy in this era especially it is appearing in Thailand in past few years. People care more about health and wellness in the meantime they also need convenience life.

We can now notice that fitness is almost everywhere, especially in the residential project, shopping mall and community mall. Therefore, they are spread into the office building and some standalone building which seem like gym is everywhere. Fitness business is doing a very good job in the past decade, many well-known brand is doing stabilized and continue to grow increasingly. However, most of international brands are targeting high-end segment. A collapse of big brand fitness centre during the past few years made a huge hole in the middle segment market.

To combined with convenience and healthy life, 24/7 fitness has been established.

At least 3 international fitness brands with the 24/7 concept is arrived to Thailand at the same time. They're hunting for spaces on the ground floor which convenience for their customer but is not a tropical type of fitness location. Some of the landlord wouldn't accepted. "It would take some time to change landlord perspective that fitness can be anchor and magnet store like Starbucks or McDonalds" Mr.Teerawit said.

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