New retail fizzles as pandemic persists
Lowest supply in a decade expected
New retail supply in Bangkok and the surrounding area in the first quarter of this year is expected to decline by 65% year-on-year because of an array of negative factors, including the coronavirus pandemic.
According to Surachet Kongcheep, managing director of Phoenix Property Development and Consultancy Co, there are about 9,000 square metres of retail space that opened in the first quarter of this year, a vast plunge from 25,840 sq m opened last year.
Only two retail stores opened in the first quarter of this year: The Commons project on Sala Daeng Road and the Japanese department store Don Don Donki at Ratchaprasong Intersection.
The Commons project with retail space of 5,000 sq m opened in January, while Don Don Donki on the ground floor of The Market Bangkok, opposite CentralWorld, was scheduled to open today.
“New retail supply in the first quarter of this year is likely to be the lowest in over a decade after slowing continuously in the last few years because of the country’s economic downturn,” Mr Surachet said.
Some retail projects that postponed their expansions in the first quarter of this year include Siam Premium Luxury Outlet, which has 50,000 sq m.
He said large retail developers, particularly hypermarket and department stores, are likely to put off their expansion into the second half of this year, not only because of the coronavirus pandemic but also the economic slowdown, PM 2.5 dust and widespread drought.
“The construction of some retail projects in Bangkok and surrounding areas are all but shelved because foreign workers are gradually returning
home,” Mr Surachet said.
An executive at Robinson Department Store who requested anonymity confirmed it is postponing the opening of a new Robinson Lifestyle mall with 25,000 sq m located at Bowin Industrial Estate.
The new complex was scheduled to open on April 3.
For 2019, Mr Surachet said 204,200 sq m of new retail space was opened in Bangkok and surrounding areas, with large malls accounting for 65%, followed by community malls at 15%.
Total retail supply in Greater Bangkok amounted to 8,450,660 sq m last year, 107,900 sq m of which was under construction and scheduled to be completed in 2020.
Of the total, 59% are large malls, followed by other sectors and community malls making up 25% and 16%, respectively.
The Thai Retailers Association said the retail market in 2019 looked tepid, with market growth of only
2.8%, easing from 3.2% in 2018.
“Although the Thai retail market still has room to grow, the slowdown may last for the next few years as online shopping is posing a direct threat to the traditional retail market,” said Mr Surachet.
He said though new retail supply in the future is unlikely to increase as much as in the past because retail centres are no longer the first destination for people looking to buy something, shopping malls and adjacent retail in the Bangkok area are expected to dramatically increase in the future, driven by the presence of mixed-use projects in particular.
Many mixed-used developments are under construction and scheduled to be completed in the next few years.
Mr Surachet expects 515,000 sq m of shopping malls to be opened in 2020-22.
Of the total, some 312,500 sq m are estimated to be in Bangkok and surrounding areas, he said.