Many retail developments roll out in Thailand

 

Home to some of the largest malls in Asia, Bangkok has become a haven for shopping enthusiasts with dozens of large, modern complexes operating across the city – oftentimes even on adjacent blocks. As a result of this seemingly insatiable demand for spending, the sector has secured investments from some of Thailand’s biggest companies and wealthiest families. This includes the country’s most prolific mall developer, Central Pattana, which is affiliated with the retail conglomerate Central Group that is majority-owned by the Chirathivat family, Thailand’s third-richest family according to a 2016 ranking by Forbes Magazine. Another Forbes top-50 member is Supaluck Umpujh, who operates the second-largest mall developer in the country, The Mall Group. Central Pattana operates 26 shopping malls including the popular CentralWorld, CentralPlaza and CentralFestival, while competitor The Mall Group owns Siam Paragon, Emporium and EmQuartier malls in Bangkok, and others elsewhere.

Recent Developments

Despite slower economic growth rates that have weakened retail sales the past few years, developers are still banking on the local penchant in constructing new, high-end retail and entertainment venues, with numerous new projects set to open their doors to the public in 2017. Given the high occupancy rates of premium retail locations, investors seem sure that the Bangkok market has yet to reach full saturation, and the slew of new malls coming online will be a significant vote of confidence after only a handful of retail projects were delivered in 2016.

Nine smaller retail developments became operational in the early part of 2016, the largest being the Ratchadapisek Suam Lum Night Bazaar. However, one large-scale development did come online: Show DC. At 74,000 sq metres of net leasable area, the entertainment and retail centre accounted for roughly one-third of all retail space added for the year, and caters to patrons seeking convenient access to the toll road leading to Suvarnabhumi International Airport. It was developed by Thai and Malay investors through a private equity property investment fund by AEC Capital Co, which in turn owns the Show DC Corporation. The new $300m mall sits on a 43-rai (7-ha) parcel of land and touts itself as home to the largest K-Pop town outside South Korea. Taking advantage of its proximity to the airport, Show DC also houses the VIP Traveller Lounge where patrons can spend time between checking-out from their hotels and boarding later flights.

In The Works

Following a relatively uneventful 2016, attention is now focused on the next wave of shopping centres that are expected after some developers elected to move them back due to measured economic growth. According to Colliers International Thailand, at least five major shopping malls are expected to open in 2017 with a combined retail space of 178,630 sq. metres, along with seven small community malls delivering another 51,850 sq. metres. By far the largest project slated to open in 2017 is luxury mall Icon Siam, bringing another 87,500 sq. metres of retail space to the market in a joint venture between Siam Piwat, the operator of Siam Centre and Siam Discovery, and Magnolia Quality Development, the real estate developer under Charoen Pokphand Group.

Apart from the 50,278 sq. metre IKEA building located in the Bang Yai district in Nonthaburi (which will be Bangkok’s second), the remaining shopping complexes due to open are all relatively modest in size. These include Gaysorn II, near Ratchaprasong intersection, at 6000 sq. metres; G Tower, with 7140 sq. metres on Ratchadaphisek Road; and the Pearl Bangkok retail plaza on Phahon Yothin Road with 6311 sq. meters.

Furthermore, a handful of new mega projects are ready to put shovel to dirt, including EmSphere, Mega Rangsit, Bangkok Mall and Central M. However, the exact timetable for completion for these projects remains murky as developers continue to postpone start dates in hopes of capitalising on a more resurgent economy and increased consumer confidence.

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The Report: Thailand 2017

Industry & Retail chapter from The Report: Thailand 2017