“Main Streets Across the World”, the latest retail report from Cushman & Wakefield, provided some upbeat news for Bangkok’s retail market. Demand from luxury retailers looking for space in prime locations remains strong while the F&B sector saw the best growth recently.
The retail market in Bangkok has been seeing strong competition for space particularly along prime streets like Sukhumvit Road where supply is limited and the vacancy rate is below five percent, Cushman & Wakefield’s research revealed. At the moment there are a number of retailers waiting to rent space in this area and that is putting strong upward pressure on rents and positive growth continues to be evident. This is a trend that is expected to continue over the course of the next 12-18 months.
Rajprasong and Sukhumvit continue to lead the way when it comes to positive rental growth in the region increasing 15.2 percent over the last twelve months to Q2 2015, the report noted. A number of new spaces opened in luxury shopping malls throughout the Bangkok Central Retail District which helped alleviate some of the pent up demand. Cushman & Wakefield used the example of the opening of the new Tiffany & Co. store in Emporium to highlight this trend. Even with the new supply that came onto the market, vacancy in this area remains low and rents continue to rise because of this.
Cushman & Wakefield’s report also noted that the F&B sector is seeing the strongest growth while demand for space from the luxury sector continues to remain stable. It is believed that going forward demand will be driven by the rising number of visitors making their way to Bangkok which will boost spending power.
In other retails news across the Asia Pacific, some international retailers are setting up operations but others are not as eager to do so due to the economic instability in many countries throughout the region. Theses hesitant brands are instead opting for franchises. Luxury brands in particular need to revisit their strategies as currency weaknesses currently found in several countries will reduce profits, shake sentiment and leave them exposed after their aggressive expansion in the recent past, the reported claimed.
