Although just one retail project was completed during Q2 2013, the vast majority of retail projects in Bangkok performed well and achieved high occupancy rates during the first half of 2013.
In its latest Pulse Bangkok Market Report, real estate agency Jones Lang LaSalle (JLL) noted there are challenges facing some community and neighbourhood malls built by inexperienced developers. It noted that such projects are finding it difficult to generate repeat customer business, and are faced with relatively high vacancy rates.
In 2Q13 only one retail project – Kurve 7 – was completed. This development consists of a Gross Floor Area of 9,600 sqm. JLL also noted that some projects that were scheduled to open in 1H13 have faced construction delays. In 2H13, it expects 23 projects totalling 472,319 sqm to come to the market.
Despite reduced consumer purchasing power in the face of higher household debts in 1H13, Thailand remains a favourable destination for many existing and new retailers.
The overall retail vacancy rate in Bangkok as of 2Q13 was 7.3 percent, down 1.2 percent year-on-year, according to the agency.
International brands such as Uniqlo and Boots gace aggressive expansion plans for the Thai market, and in order to boost consumer spending, many retailers have offered a variety of sales and promotions in recent months.
Looking ahead, Jones Lang LaSalle expects retail demand to remain strong in Bangkok and other major markets in Thailand including Chiang Mai, Phuket and Pattaya.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote
this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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