MALLS MUSHROOM
Retailers are to continue developing projects this year despite sluggish sales growth, particularly upcountry.
Retailers are expected to continue developing stores this year despite sluggish sales growth overall.
According to Phattarachai Taweewong, senior manager of the research department at Colliers International Thailand, eight retail projects opened in the first half of the year, mostly shopping centres and community malls.
Projects that opened in the first quarter included Happy Avenue Donmuang, Ikea Bang Yai, Ladprao Hills and ABC World in Ramkhamhaeng, creating a total space of 59,579 square metres.
Two retail projects opened in the second quarter: Lasalle’s Avenue and The Park community mall in the Krungthep Kritha area, creating retail space of 14,978 sq m.
The opening of eight new retail projects has created new retail space of 74,557 sq m, bringing total retail space in Bangkok and surrounding areas in the first half of the year to 7,953,226 sq m, up from 7,661,172 sq m last year.
ONLINE THREAT
Mr Phattarachai said that while retail operators face low consumer spending amid the growing online shopping spree, overall retail space in Bangkok is expected to grow this year, boosted by new developments in surrounding areas of downtown Bangkok.
“The retail market in Bangkok and along the Chao Phraya River is likely to
become more active this year with the launch of the 54-billion-baht Iconsiam in the second half of this year, along with the opening of over 10 retail projects with a
combined 110 billion baht in investment costs,” he said.
Apart from the Iconsiam project, there are more than 10 retail projects scheduled to be opened in the second half of the year, creating new retail space of 666,320 sq m.
The retail projects to open in the remaining five months of the year include The Platinum Market, Singha Complex, Wisdom community mall and Gateway Bang Sue.
All new retail expansion will boost the total retail space in Bangkok and surrounding areas to reach 8,475,586 sq m this year.
The Thai Retailers Association (TRA) recently predicted that Thailand’s retail industry in 2018 would grow between 3.3% and 3.5% for the entire year, up from 3.2% in 2017, despite almost flat growth in the first half of the year because of weak consumption in upcountry areas.
URBAN RESILIENCE
The retail industry registered growth of 3.3% in the first half of the year against 3.2% for the whole of 2017 and 2.97% in 2016.
The lacklustre growth in the first half stemmed from a flat showing in nondurable goods.
Durable goods (home electric appliances, electronics and construction materials) grew by 2.2% in the period against 2% in 2017, while semi-durable goods such as fashion and leather goods, small domestic appliances and sporting goods grew by 4.1% against 4.3% in 2017.
The growth was primarily boosted by retail business in Bangkok, other major cities and tourist destinations.
But only 30% of retail stores are in Bangkok, with the remaining 70% being located in provincial areas where spending power is still relatively weak.
According to the TRA, the average rental fee of retail projects in Bangkok and nearby areas in the first half of the year rose by 3-5% on the same period last year.
The rental fees of large shopping centres in downtown went as high as 3,000-4,000 baht per sq m per month.
Rental fees at shopping complexes on the outskirts stayed strong at 800-3,000 baht per sq m per month, but rates for community malls fell to 300 baht per sq m per month for the first half.