Q1 2013 | RETAIL
THAILAND
BANGKOK RETAIL MARKET REPORT
Bangkok Retial Market EXECUTIVE SUMMARY Bangkok’s appetite for shopping and rapidly growing suburbs is driving expansion in the retail property sector, with new malls due to open throughout 2013.
MARKET INDICATORS Q4 2012- Q1 2013 NEW SUPPLY RENTALS OCCUPANCY
Local and international retail brands aggressively expanded their numbers of shops and presence in malls last year in Bangkok and other parts of Thailand, and that growth is set to continue in 2013. Convenience stores became the most competitive area of retail last year, with a number of big companies opening large numbers of new stores, while community malls are also still popular for developers, with the large number of residential developments springing up along mass transit routes in the capital driving demand for easily accessible shopping. The first quarter of this year saw slower growth than in the fourth quarter of 2012, with 27,500 sq m of retail space completed, all of it in community malls. However, more than 284,000 sq m is due to be finished throughout the course of this year, the majority of it in community malls in suburban Bangkok. Large numbers of malls, community malls and specialty stores are also due to open next year and the year after. Rental prices and take-up rose have risen slightly from last year, and some city centre malls have increased their rents by as much as 5-10%, but these isolated price rises have not affected the market as a whole. The Retail Index stood at its highest level for six years in Q1 2013, and while the Consumer Confidence Index dropped by 8% from the last quarter of 2012, it is still higher than the average for the past few years. Online shopping continues to grow in importance for both consumers and retailers, and all of the big-name companies are attempting to expand their presence online with promotions and new campaigns.
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BANGKOK RETAIL MARKET REPORT | Q1 2013 HISTORICAL SUPPLY HISTORICAL SUPPLY, Q1 2013
Source : Colliers International Thailand Research
Approximately 27,510 sqm of retail space was completed and opened in Q1 2013, and nearly 276,600 sq m is scheduled to be completed by the end of 2013. The total supply is estimated to have been around 6,522,300
sq m at the end of Q1 2012, and will be more than 6,771,000 sq m at the end of 2013.
ADDITIONAL SUPPLY BY QUARTER, Q1 2013
Source : Colliers International Thailand Research
Many shopping and community malls are scheduled to open in 2013 with a total area of approximately 276,600 sq m. Four retail centres were completed and opened their doors in the first quarter of 2013; the most
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popular is “Sena Fest”, the first community mall from Sena Development Plc. on Charoennakorn Road in the Outer City Area with a total saleable area of around 9,811 sq m comprised of approximately 120 shops.
BANGKOK RETAIL MARKET REPORT | Q1 2013
BREAKDOWN OF RETAIL SPACE IN BANGKOK BY LOCATION, Q1 2013
Source : Colliers International Thailand Research
Retail developers are trying to develop projects closer to their catchment areas in the Suburban Areas where more people live. However, only half of the total retail space in Bangkok is located in Suburban Bangkok Areas. All stand-alone department stores in Bangkok are located in urban areas due to the appeal of shopping in the city centre. The vast
majority of luxury shops are located in the City Area and some in the Outer City Area.
FUTURE SUPPLY CUMULATIVE FUTURE SUPPLY IN BANGKOK BY YEAR AND CATEGORY, Q1 2013
Source : Colliers International Thailand Research
More than 284,000 sq m of future supply was under construction and scheduled to be completed in 2013, with approximately 131,700 sq m at shopping malls and approximately 152,000 sq m at community malls. Most community malls scheduled to be completed in 2013 are located in
Suburban Bangkok Areas, although some community malls in Bangkok are not successful and cannot maintain their initial popularity.
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BANGKOK RETAIL MARKET REPORT | Q1 2013 DEMAND – OCCUPANCY RATE BREAKDOWN OF HISTORICAL OCCUPANCY RATE OF RETAIL SPACE BY LOCATION, Q1 2010-Q1 2013
Source : Colliers International Thailand Research
The occupancy rate in all locations continues to increase slightly from 2012. The retail market in Thailand has been growing during the past year, especially in Bangkok and all the bordering provinces of Thailand. Many foreign and local brands and shops are looking for new space to
accommodate their plans for expansion into existing retail centres, and new retail centres are under construction. New retail centres are letting out space prior to completion, and most are already fully occupied.
OCCUPANCY RATE OF CURRENT SUPPLY BY CATEGORY, Q1 2013
Source : Colliers International Thailand Research
The occupancy rates in all categories are above 95% except for supporting retail which weighed in at approximately 87%. Most retail centres in Bangkok have achieved a high take-up rate, especially those
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retail centres in the City Area. The average take-up rate of specialty stores is the highest because many of these stores own their own space and rent out portions of it to other tenants.
BANGKOK RETAIL MARKET REPORT | Q1 2013 DEMAND DRIVERS FOCUS CONSUMER CONFIDENCE INDEX (CCI), Q1 2013
Source: Bureau of Trade and Economic Indices, Colliers International Thailand Research
The Consumer Confidence Index (CCI) in Q1 2013 decreased by around 8% from Q4 2012, but is still higher than the figure during the past few years.
RETAIL SALES RETAIL SALES INDEX BY QUARTER, Q1 2013
Source: Bank of Thailand, Colliers International Thailand Research Note: Year 2002 = 100
The Retail Index in the first quarter of 2013 was similar to the previous quarter at around 233, the highest for the past six years. The last and first quarter of every year is the festive season and all retail centres
launched marketing campaigns and promotions to attract clients, so the figures for these two quarters were higher than for other quarters.
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BANGKOK RETAIL MARKET REPORT | Q1 2013 RENTS RENTAL RATES DURING Q1 2010 - Q12013
Source : Colliers International Thailand Research Source: Colliers International Thailand Research Note: The average rental rate is based on the rental rate located on the ground floor of the building.
Rental rates in the City Area posted a slight but marked increase in Q1 2013 compared to the previous quarter, reflecting the growing confidence of retail centres in the City Area. Other locations also saw slightly
increased rents compared to the previous quarter, but the rental rate in the Suburban Bangkok Area increased by more than 5% from 2012.
FORECAST Many international and local brands were looking to expand their space and open new shops in retail centres in Bangkok and the surrounding area in 2012, and are continuing to grow in 2013 in all locations. The retail business in Bangkok is very successful. Local demand is still strong for the Bangkok market and keeps growing in every area of the city. As there are mass transit extension lines under construction in the suburbs, many residential developers are starting new projects along these extensions, which in turn increases demand for retail centres in the area. In 2013, community malls will continue to grow compared to the past few years, due to many residential projects expanding to suburban Bangkok, especially community malls. Approximately 87,000 sq m are scheduled to be completed in 2013 in the Suburban Bangkok Area.
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The convenience store market was the most competitive in the past year after Central Retail Corporation (CRC) became the new owner of Family Mart in Thailand. Even though 7-Eleven has taken over the majority market share, CRC, Tesco, Big C, Max Value and the newest Lawson 108 from Sahapat Group still announced the expansion of their stores in all locations in Bangkok and up country. Online shopping is still a new market for all retail developers, but has shown continued growth since 2011. The big name players in the retail business are all putting more focus on online shoppers, launching new campaigns or promotions online.
BANGKOK RETAIL MARKET REPORT | Q1 2013 COLLIERS INTERNATIONAL THAILAND MANAGEMENT TEAM RETAIL SERVICES Asharawan Wachananont | Associate Director PROJECT SALES & MARKETING Monchai Orawongpaisan | Associate Director RESIDENTIAL SALES & LEASING Napaswan Chotephard | Manager RETAIL SERVICES Asharawan Wachananont | Associate Director RESEARCH Surachet Kongcheep | Senior Manager OFFICE SERVICES Nattawan Radomyos | Senior Manager INDUSTRIAL SERVICES Narumon Rodsiravoraphat | Associate Director ADVISORY SERVICES | HOSPITALITY Jean Marc Garret | Director ADVISORY SERVICES Napatr Tienchutima | Associate Director REAL ESTATE MANAGEMENT SERVICES Thanasit Tonsatcha | Associate Director
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