More competition between new and existing malls in suburban areas of Bangkok will be a key feature of the retail market this year.
According to research from CBRE, Bangkok is one hotspots for developments in Southeast Asia with more than 1.7 million sqm of new retail space due to be completed in the next few years.
Most of that new supply will be in suburban locations, which are mostly in emerging residential areas and along the extensions of mass transit systems.
“In this segment, we can expect to see a bit of a battle of the giants,” said James Pitchon, Executive Director – Head of CBRE Research, Thailand, referring to the increased competition amongst malls of all types.
The newer malls are going head to head against older, more established malls. For example, the upcoming Bangkok Mall will be up against Mega Bangna and Central Plaza Bangna.
Further afield Mega Rangsit, which will launch with Thailand’s second IKEA outlet as its anchor tenant, will be up against Future Park Rangsit, which currently dominates that area.
Recently, community malls have also become popular but it remains to be seen how many of them actually have the capacity to hold their own, seven days a week, 12 hours a day. Thus far, their performance has been mixed.
La Villa, off BTS Ari, is a success due to its location, density of local population including residents and office workers, ease of accessibility, mix of tenants and lack of direct competition in the area. Elsewhere, however, community malls struggle with low occupancy and rental rates despite their central locations.
Despite this, the number of community malls is on the rise in the suburbs. Rental rates and occupancy remain dependent on various factors such as area, grade, and reputation of developer.
CBRE is also monitoring the push to expand retail upcountry. Low spending power due to a combination of high personal debt and low agricultural prices have had an adverse effect on these locations.
Main image: A new mall in central Bangkok under construction (c) PropertyGuru 2015.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
