Thailand’s economy is projected to pick up further.
Retail is one of the most sophisticated markets.
In the past years the retail market in Thailand has expanded increasingly, rapidly and aggressively while many shopping malls in other countries have been affected by online shopping and dramatic changes in consumer behaviour. But Thailand seems less affected.
The retail market in Thailand continues to expand and, of course, this is led by Bangkok.
There are new retail developments ranging from the small to the mega end of the spectrum each year.
After a long while since Siam Paragon opened in 2006, followed by big renovation in the most of the shopping malls, in 2015, two luxury shopping malls have been launched on Ploenchit Road and Sukhumvit Road.
The retail market in Bangkok has been highly competitive, especially in prime areas, the vacancy rate is lower than 5% and rental rate is increasing significantly while tenants have been lining up for available space. Food and Beverage are the most increasing in demand thanks to social media, such as Facebook and Instagram, as many international and local brands enter the market by its popularity. Besides, tourist arrivals have also boosted the retail sector, with retail sales growth of 11.66% in last year according to Ministry of Tourism and Sports.
The newest supply entering Bangkok Centre Retail District (CRD) was Gaysorn Tower. Net lettable area is 10,000 sqm with the highest rental rate at THB3,500 psqm/mo at the opened time, made the total supply in Bangkok CRD to 660,000 sqm. The average rental rate was Bt3,900 sqm/mo same as previous year. The occupancy rate in Bangkok CRD was 96.4%.
Nevertheless, limited new supply will be added-in as a result of the dramatically increasing of land price that drives developers to consider more on lease land plots. Future supply is expected to be found in Bangkok Fringe and Urban area.
There are many kinds of business categories such as food and beverages, medical center, surgery clinic, and health & wellness. Surprisingly, consumer behaviour has greatly changed. Many retail operators have thought about opening their businesses around the clock and some already do.
Teerawit Limthongsakul, managing director of Nexus Real Estate Advisory, said: “There are a lot of enquiries about 24-hour businesses such as coffee shops, restaurants, co-working spaces and lifestyle entertainment. I found it is interesting opportunity for any business to operate 24/7. Retail market wouldn’t be the same, it will be more accessible and lively.”
Lifestyle platform has changed, technology becomes norm, and healthy trends have become significant trendy in this era especially it is appearing in Thailand in past few years. People care more about health and wellness in the meantime they also need convenience.
We can now notice that fitness is almost everywhere, especially in the residential project, shopping mall and community mall. Therefore, they are spreading into the office building and some stand-alone buildings which seem like gym is everywhere. Fitness business is doing a very good job in the past decade, many well-known brand is doing stabilised and continue to grow increasingly. However, most of international brands are targeting high-end segment. A collapse of big brand fitness centre during the past few years made a huge hole in the middle segment market.
To combine with convenience and healthy life, 24/7 fitness has been established.
At least three international fitness brands with the 24/7 concept have arrived in Thailand at the same time. They’re hunting for spaces on the ground floor which is convenient for their customers but is not a tropical type of fitness location. Some landlords won’t accept this. “It would take some time to change landlord perspective that fitness can be anchor and magnet store like Starbucks or McDonalds,” Teerawit added.