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Retail Space for Lease Bangkok steady demand

By on Jul 23, 2013 in Retail

Published on The Nation dated 19 July  2013 by Aliwassa Pathnadabutr, Managing Director of CBRE Thailand

In addition to the residential sector, retail space is one of the most dynamic sectors in Bangkok and continues to experience steady growth backed by a strong domestic demand as well as tourism.Qiss Condo

Bangkok has total retail space of 6 million square metres. This represents 0.5sqm of retail space per person, a healthy level compared with 2.5sqm per person in the United States and 1.5sqm in Europe. It indicates that the Thai market has room to grow for future projects in the right locations.

With a strong retail space demand in Thailand, global brands across all sectors are expanding into the market. In the first quarter of this year, Domino’s Pizza, Coffee Bean & Tea Leaf and KidZania opened their first stores in Bangkok, while brands such as Ikea, Uniqlo and TWG also continued their expansion to more locations.

Global brands tend to focus on large shopping centres rather than small-scale retail or community malls, which further strengthens the tenant mixes of major retail centres. The entry of global brands not only offers greater variety for consumers, but also increases their time spent in retail centres.

Increased sophistication and competition in the retail sector are also driving the need for new approaches to retail. Retailers need to be increasingly proactive and creative to ensure competitiveness. Many existing retail centres are undergoing renovations with new decorations, merchandise mixes and new brands.

Superstores and supermarkets have size limitations due to zoning, but they are also exploring new retail formats such as small stores combined with additional services.

For example, in response to growing demand for home improvement and finishing products, HomePro plans to open a “Mega Home Store”, which would provide wholesale and retail construction materials.

Community malls face the greatest challenges in terms of attracting major brands, because of size limitations and the need to find the right quality local brands to serve the neighbourhood. Newer community-mall developments also appear to be larger to attract a greater tenant mix and thus more consumers.

Like condominium projects, you can also have a very successful retail development next door to an unsuccessful one in the same location with a big difference in rents. There is also a wide gap in rents among different types of retail centres, even within the same shopping centre on different floors. Retail rents continue to increase, particularly in Grade A shopping centres in the downtown area and major shopping malls in key suburban locations. Rents in community malls and strip malls in offices, hotels and residential projects are also growing, but at a slower rate. To continue reading, please visit : CBRE Thailand.

 Source : The  Nation  19 July 2013

Aliwassa has been the Managing Director οf CBRE Thailand for a number of years. As a Thai national, Aliwassa is extremely knowledgeable about the sale of property in Thailand, specifically large scale high value condominium developments largely in Bangkok.

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