As we pointed out in former blog concerning Asean, Thailand and other nine countries will become the Asean Economic Community (AEC) in 2015, which will see many changes in the region and with the distinct likelihood that Bangkok will turn into the region’s shopping hub. Community malls are still the most fashionable for the retail market in Bangkok.
The purchasing power of visitors from Asean countries is markedly higher than before, so that total border trade between Thailand and its neighbouring countries has significantly increased to nearly Bt1 trillion in 2013. And, due to the increasing value of this trade, businesses are investing in the provinces as they prepare for the future.
Many retail developers have opened or plan to open retail centres in certain border areas, with shopping malls and specialty stores the largest category for those provinces. Many have already opened in past year or so. Even in areas that are not border provinces, many developers have opened up stores. Land & Houses opened a new HomePro in Chiang Rai and Mega Home opened in Mae Sot in the final quarter of 2013. They are also planning to expand to other provinces, especially industrial and border areas such as Nong Khai.
Retail developers are focusing more on other provinces across the country, especially in border areas in anticipation of the Asean Economic Community in 2015. Around 96,800 square metres of retail space was supplied in the final quarter of 2013 and around 152,800 square metres of new retail centres was added to the market last year and more than 781,000 square metres is scheduled to be completed by the end of 2014.
In Bangkok, shopping malls represent 59 per cent of the retail market, with more than 3.9 million square metres of space. More than 28 per cent of shopping mall space is in the north of Bangkok and approximately 26 per cent is in the city area. 60 per cent of community malls are located in Bangkok’s suburbs and other provincial areas that are connected to it.
However, political issues have stymied progress and are a major concern for investors, with rental and occupancy rates in 2013 still to the previous year rents will most likely be around 5-10 per cent higher this year. Having said this, many international and local brands have been looking to open up new shops in retail centres in the capital and surrounding areas.
The big players in the retail business are focusing more on online shoppers and have been launching new campaigns or promotions since last year. The older malls will need to renovate their centres to add new brands or shops that are better suited to the contemporary lifestyles. The main retail developers are now focusing their efforts in expanding their businesses in the border provinces and are eagerly anticipating the coming of the Asean Economic Community.