Bangkok Retail Space – High Occupancy Rate in City
Thailand’s retail property market has showed strong growth, with Bangkok continuing to experience an occupancy rate of 95.4 per cent and a number of international brands opening branches this year and next, according to a survey by CBRE Thailand.
Likewise, for the luxury sector high-end brands continued to add new stores in Beijing and Shanghai, but were more focused on core areas in top cities as opposed to expanding elsewhere.
Entry of high-end retailers
In particular, in Southeast Asia, rising demand for new trends and styles from the emerging middle class continued to spur the entry of fast-fashion retailers into key markets.
In the third quarter, H&M launched its first store in Jakarta in early October, after the opening of its new flagship store in Bangkok. Zara opened its first store in Hanoi and its sister brands Bershka and Stradivarius established their first outlets in Manila.
Retailer demand is expected to remain firm overall, and will continue to be led by bridge brands and mid-range fashion groups, with many retailers in these categories focusing on key markets in China and Southeast Asia for new-market entry and expansion.
In markets where they are already established, retail groups are looking for brand extension opportunities to launch their related brands in premium locations, said Sebastian Skiff, executive director, CBRE Retail Asia.
“We expect core luxury retailers will remain active, although most groups already established in key markets such as Beijing, Hong Kong, Shanghai and Tokyo are now focusing the upgrading and repositioning of existing stores to improve customer experience.
“The relatively newer-to-market category now actively opening stores in the luxury segment are the creative or affordable luxury brands that will continue to build their presence across core markets like Shanghai, Beijing, Chengdu, Hangzhou and other key Chinese cities,” he said.
CBRE expects overall retail rents in the region will most likely continue to experience slight growth over the next three to six months.
In key markets such as Hong Kong, Shanghai and Singapore, slightly more subdued demand combined with a lack of space in core locations and high rents will continue to restrain retailer expansion and limit further rental growth.
Retailers in these markets will continue to focus on key requirements in core areas, a trend that will impact rents in secondary locations, said Jonathan Hsu, director, CBRE Research, Asia-Pacific.
Despite weaker consumer sentiment in emerging Southeast Asian markets in the third quarter, the likes of Bangkok, Manila and Jakarta should continue to see steady rental growth. All these markets continue to see robust leasing demand and strong competition for space.