The business of shopping in Bangkok received a boost in the fourth quarter of 2009 as the amount of retail space in Bangkok nudged upwards alongside consumer confidence.
According to a study by CB Richard Ellis, the total retail supply in the capital increased to 5.38 million square metres – up 2.1 per cent quarter-on-quarter and 6.6 per cent year-on-year – while the Consumer Confidence Index (CCI) increased from 76.5 in November to 77.7 by the end of the quarter. The CCI figures are the highest since September 2008.
The study said there are continued signs of improvement in the retail sector, but that global and local economic recovery and stable politics are crucial for a continued upswing.
Retail occupancy remained stable in Q4 2009 at 92.5 per cent, up 0.1 per cent quarter-on-quarter but down 0.1 per cent year-on-year. Suburban occupancy rates in Bangkok were the strongest at 94.9 per cent, followed by downtown rates at 93.7 per cent, and midtown at 89.3 per cent.
Total occupied retail space increased to 4.97 million square metres, up 2.3 per cent quarter-on-quarter and 6.4 per cent year-on-year. Suburban areas had the highest take-up in the fourth quarter and shopping malls recorded the majority of total Bangkok retail take-up and the highest growth. The suburban percentage of retail space increased to 41.4 per cent, up 4.4 per cent quarter-on-quarter and 9.6 per cent year-on-year. Suburban areas showed the highest growth of retail space.
Rental rates remained stable in the fourth quarter of 2009 after rising slightly in line with the global economic recovery in the previous quarter.
In terms of supply, three new retail centres opened in suburban and midtown area of Bangkok in the fourth quarter, adding 0.11 million square metres of area. There was no additional supply in the downtown area. CBRE researchers found that an additional 0.6 million square metres of retail space will be completed in Bangkok in the next three years, boosting total retail area to 6 million square metres. Some 0.14 million square metres of that space is expected to be completed in 2010.
The report concluded that property retail trends in Bangkok are shifting away from mega-malls towards small and medium sized “community malls” and lifestyle and entertainment complexes like Esplanade Rattanathibet. CB RE recommended that businesses constantly reassess their strategy in the constantly changing and fickle retail sector. With some new mixed-use and retail projects planned, the report advised that maximizing future rentals without an anchor tenant could prove difficult“
You may also like:
About the Author: