Edmund Tie & Company’s Real Estate Times report for the second quarter revealed that rental rates in both midtown and downtown Bangkok remained the same, but noted that an influx of new stock schedule to come online in the next three years could change things.
According to the firm’s research, the average retail rent in Bangkok’s downtown area remained unchanged at THB 2,630 per sqm, per month. It was a similar story in midtown where rents were unchanged at THB 1,590 per sqm. per month.
Nearly 271,000 sqm. of retail space is expected to be completed in the downtown area between 2017 and 2019 while total retail stock in the midtown area increased by 11.3 percent in the second quarter. This new supply could affect rents in both places.
In the midtown area, several new retail spaces were launched in the second quarter including Show DC and Habito on Sukhumvit 77, which is located within one of Bangkok’s fastest growing residential and retail areas. Additionally, the newly opened FYI Centre is a mixed-use development that features some 4,000 sqm. of retail space.
This, along with several new projects set to be completed in the next 12 months, should see competition in midtown’s retail sector increase significantly. Edmund Tie & Company pointed out that the average occupancy rate for midtown dropped in Q2 due to the rise in stock.
Occupancy levels in the downtown market remained stable during the second quarter as no new projects came online. Retail supply is expected to be limited for the remainder of 2016 with no large-scale projects set to be completed. Next year, most of the retail supply launched in the downtown area will come from Gaysorn Tower II located on Ratchadamri Road.
The report concluded that retail rental levels in both midtown and downtown Bangkok are likely to remain roughly the same as high household debt and a slowdown in domestic consumption hurt purchasing power in the country.
Image: Habito on Sukhumvit 77 is one the new retail projects launched in the Q2 this year.
