Community malls were the big trend in Bangkok retail a few years ago, but the slowing performance of existing projects may see demand for new ones shrink, reports local media. Lettable space at community malls rose by nearly 150% over the past decade but a string of failures at some projects have made developers cautious about bringing new ones to the market.
“As players are not limited to experienced retail operators but also new-to-market individuals or landowners who had no direct experience in retail development and management, many community malls have turned unsuccessful. Some failed to fill up space with retailers, others failed to attract shoppers despite full occupancy by well-known retail brands,” says Krid Jarungruk, Head of Retail Consultancy and Leasing at JLL, to the Bangkok Post.
A total of 14% of the total lettable retail space across Bangkok is now in community malls, according to estimates from JLL. However, since 2015, there has been a slowing of new supply after a number of developers had notable success with this retail format.
“The success of several pioneering community malls has motivated more players to jump on the bandwagon. This, coupled with the fact that this retail format is relatively easier to build due to its generally smaller development scale, has resulted in the fast growth of supply in this retail segment,” says Krid.
There is currently 856,000 square meters of net lettable space at Bangkok’s community malls which is up from the 345,600 square meters that were available in 2008. The malls, which usually serve the residential community they are located in, have a big supermarket along with a mix of restaurants, drugstores, sundries, banking facilities, and other personal services. Usually these projects fail when they don’t connect with the community or offer the right services.
“While there are many causes of the failure, the most common ones include location away from residential communities, inconvenient access, wrong positioning, poor retail mix and inefficient marketing, as well as operators’ inability to adapt or identify appropriate solutions when challenges arise,” says Krid.
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