Supply growth slowing q/q for Q1 2011 with just around 14,180 sq m being completed, all being community malls. Rentals rates escalated q/q by around 4% and take up increased by approximately 1% for the same period. Consumer confidence and spending over the past year are positively affecting the retail sector as a whole. The trend is not only the development of new retail centres but the renovation of older buildings with outdated retail designs and mix. This flight to the top can only be of benefit to customers and the sector as a whole.

1. Q1 2011 | Retail
ThAilAnd
Bangkok RETaIL MaRkET
Bangkok Retail Market
execuTive SummARy
Supply growth slowing q/q for Q1 2011 with just around 14,180 sq m being completed, all being
community malls.
Rentals rates escalated q/q by around 4% and take up increased by approximately 1% for the same
period. Consumer confidence and spending over the past year are positively affecting the retail
sector as a whole.
mARkeT indicATORS The trend is not only the development of new retail centres but the renovation of older buildings
with outdated retail designs and mix. This flight to the top can only be of benefit to customers and
Q4 2010/Q1 2011
the sector as a whole.
new Supply
The area encompassing the northern part of the neighbouring province of Samut Prakan along
RenTAlS with Bang na, which borders the province in Bangkok’s suburbs, is increasingly being seen as a
strategic hub for the wholesale and logistics market due to its location close to the city, airport
OccupAncy and Eastern Seaboard.
www.colliers.co.th

2. Bangkok Retail MaRket RePoRt | Q1 2011
AddiTiOnAl Supply by QuARTeR
Source: Colliers International Thailand Research
approximately 14,180 sq m was completed in Q1 2011, with nearly 10,400 renovation for six months from 14 February to the end of July 2011. The
sq m located in Suburban Bangkok and the rest in the outer City area. closing of this center has led to other retail centers attempting to attract
customers from Central Ladprao by launching many campaigns and
a section of Central World, including Zen department store, is still promotions.
undergoing renovation following the damage caused by the fire in May
2010, however CPn announced the closure of Central Ladprao for
Two new community malls opened in Q1 and these remain a very popular contains eclectic architectural designs.
and fashionable sector of retail business, especially in the Suburban
Bangkok area. one is the “amorini Boutique Lifestyle Hall” with on 21 March, Big C started the process to rebrand the Carrefour
approximately 5,000 sq m which had its official grand opening on 21 hypermarkets which the company purchased in 2010. Big C have already
March 2011 and is located in Suburban Bangkok – East. The other is announced that 34 branches out of the total of 42 will undergo a
“The Circle Ratchapruk” in Suburban Bangkok – West area. This centre rebranding makeover but the remainder will be sold as they are already
is on the Ratchapruk road in amongst the new high end villa developments in close proximity to existing Big C supercentres.
that exist or are being constructed. The centre is on one level and
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3. Bangkok Retail MaRket RePoRt | Q1 2011
bReAkdOwn Of ReTAil SpAce in bAngkOk by lOcATiOn, Q1 2011
Source: Colliers International Thailand Research
Retail developers are trying to develop projects closer to their catchment the attraction, as in most cities, of shopping in the centre. Before the
areas in the suburban areas, where more people live. However only half advent of cars for the masses the centre was the area that people flocked
of total retail space in Bangkok is located in the suburban Bangkok area; to for the retail experience. The vast majority of luxury shops are located
with every department store in Bangkok located in the urban area due to in the City area.
fuTuRe Supply
cumulATive fuTuRe Supply in bAngkOk by yeAR And cATegORy, AS Of Q1 2011
Source: Colliers International Thailand Research
The future supply scheduled to be completed in 2011 amounts to more in Q4 2011 with around 150,000 sq m of retail space. approximately
than 300,000 sq m, with approximately 217,000 sq m as shopping malls. 63,000 sq m is expected to be completed in 2012.
The majority will come from Central Rama 9 which is scheduled to open
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4. Bangkok Retail MaRket RePoRt | Q1 2011
OuTSide Of bAngkOk
an area in the province of Samut Prakan but adjacent to the Bangkok Road. In addition a developer from China plans to invest up to 45 billion
Metropolitan area will become a shopping hub. In the eastern part of baht in a major wholesale trade centre which will be named “Thai –
Bangkok along Bangna – Trad Road, Mega Bangna by Siam Future China International Products City” on Bangna – Trad Road near
Development Plc. and IkEa with a total area of approximately 400,000 Suvarnabhumi International airport with a total space of two million sq
sq m is scheduled to be opened in Q3 2012 However IkEa with around m with the first phase of 700,000 sq m scheduled to be opened in
40,000 sq m of store space is slated to open by the end of 2011. Currently october 2012. However this project has come under some controversy
retail statistics for this area are not contained in this report. from Thai traders who feel the project will crowd Thai products out of
the market with an influx of Chinese made ones.
other significant retail centers can be found in the same vicinity, such as
SB Design Square, Index Living Mall, Tesco Lotus, Big C in Central
Bangna as well as Seacon Square and Paradise Park on Srinakarin
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5. Bangkok Retail MaRket RePoRt | Q1 2011
demAnd – TAke-up
bReAkdOwn Of hiSTORicAl TAke-up RATe Of ReTAil SpAce by lOcATiOn, Q1 2010 – Q1 2011
Source: Colliers International Thailand Research
Small increases were registered in all zones for Q1 2011. The City and growing consumer confidence after the difficult local and global events
outer City areas were up by around 0.7 - 0.9% while in the Suburban of 2009 and 2010.
area an increase of approximately 1.1% was recorded. This reflects the
TAke up RATe Of cuRRenT Supply by cATegORy, Q1 2011
Source: Colliers International Thailand Research
Take up rate of all categories, except supporting retail, is more than 95%. account for this as this means less people using the outlets. In some
Supporting retail commands only 85% and can be explained by the situations the space for supporting retail is too large for the size of the
reliance on custom from workers in the offices that the retail component office it supports and some convert to office use or other functions such
supports. Lower levels of office occupancy over the past few years as educational/training centres.
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6. Bangkok Retail MaRket RePoRt | Q1 2011
demAnd dRiveRS fOcuS
cOnSumeR cOnfidence index (cci)
Source: Bureau of Trade and Economic Indices, Colliers International Thailand Research
The slump in consumer confidence for much of 2008 and 2009 was the trend and Q4 was the highest quarter in the last four years. In Q1 2011
result of the global Financial Crisis, which caused Thailand’s gDP to this fell from Q4 by approximately 24%, due to many factors, such as the
shrink. While confidence began to assume a sustained upward path in unrest in the Middle East and north africa, seismic disasters in Japan
the winter period of 09/10, this was severely dented following the and Myanmar, rising oil prices and floods in southern Thailand.
protests in april and May. However Q3 witnessed a return to the rising
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7. Bangkok Retail MaRket RePoRt | Q1 2011
ReTAil SAleS
ReTAil SAleS index by QuARTeR
Source: Bank of Thailand, Colliers International Thailand Research
Remark: Year 2002 = 100, E = Estimated by Colliers International Research
The protests in Q2 2010 had impacted the retail market but in Q3 2010 recent numbers indicate a fall in spending during the protests and a pick-
the overall pattern of spending returned, and this shows optimism for the up in Q3 2010. The fourth quarter, the last quarter of the year, includes
future. For Q4 2010, the Bank of Thailand forecast retail sales showing the Christmas and new Year festivals, so credit card usage volume in
the highest levels in the last five years, even compared to the previous this quarter of every year is usually the highest.
Christmas and new Year holiday seasons.
Credit card usage over the past five years has increased by around 60%,
and these cards are more often used in organized retail centers. The
TRendS
digiTAl ReTAilS and will promote more than 30,000 products in 11 categories. They also
plan to increase the number of products available for online shopping to
about 100,000 next year.
The national Electronics and Computer Technology Center (nECTEC)
reported the number of internet users in Thailand in 2010, based on
Central group launched their own shopping online website, www.central.
survey results from www.truehits.com, to be more than 21 million, an
co.th in which TnT will be responsible for the logistics. Big C also have
increase of nearly 15% from 18.3 million people in 2009; and according
a website for shopping online www.atbigclick.com, but buyers must go
to the nECTEC report the number of internet users is at around 33% of
to a Big C outlet to pick up the product. In addition to the major retail
the population in Thailand with a greater number expected for Bangkok.
players there are new entrants into the market such as “Uber Mall” the
Retail developers are therefore looking at opportunities to expand their
first 3D shopping mall online and www.2010MegaSale.com by kasikorn
sales channels, by opening their own online stores. However the number
Bank. a survey by Master Card Worldwide found that Thai people are
of Thais who shop online is still lower than many countries in asia. The
interested in shopping online, with an average value of products bought
air conditioned shopping experience in Thailand reflects a way of life that
online increasing to 18,150 baht per person, more than the last survey of
includes a significant entertainment component which allows family and
approximately 5,000 baht.
friends to enjoy their time together out of the tropical heat and the
internet will have difficulty competing with this for some time to come.
In the last quarter of 2010 two big players in retail business stepped into
the online shopping business. The Mall group officially launched the M
online Department Store (Mods: www.mods.co.th) on December 8 2010
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8. Bangkok Retail MaRket RePoRt | Q1 2011
RenTAlS
RenTAl RATe duRing The yeAR Q1 2010 – Q1 2011
Source: Colliers International Thailand Research
The rental rates in every area increased around the 4% mark q/q for Q1 of renovations of older properties.
2011 reflecting the growing confidence in the retail sector and the affect
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9. Bangkok Retail MaRket RePoRt | Q1 2011
SwOT AnAlySiS
STRengThS
Retail centres are places not only for shopping but entertainment
locations in their own right. Bangkok scores well in this regard and can
grow from this in further enhancing the retail experience.
Even in times of uncertainty shopping still remains a key focus of people’s
lives as well as a necessary activity and therefore the sector is more
immune from cyclical events than other sectors.
Many centres are undergoing renovation and this adds to the retail
experience as well as increasing rental rates. Improved design helps to
increase traffic flow to the upper floors of a modern retail centre and
therefore this allows higher rental rates to be charged.
weAkneSSeS
Many retail centers in Bangkok have been open for more than 15 years
and many more are in a state of decay, obsolete, or with bad layout and
retail mix, therefore developers and owners are starting to renovate or re
arrange the layout and concept again in the next few years.
With limited players in the retail market the design of retail centres may
need to be refreshed. More innovation in the architecture of retail centres,
especially Community Malls would help to invigorate the market and add
to the Bangkok shopping experience.
OppORTuniTieS
The opening up of aSEan economies culminating in the asian Economic
area in 2015 could lead to a greater demand for wholesale centers to
cater for growing trade. The Chinese project in Bang-na is a reflection
of this.
The development of new condominiums in previous greenfield or older
development areas presents continued opportunities for the creation of
community centres catering for these new population clusters.
Future relaxation of zoning restrictions based on a new census should
allow for the further development of larger scale retail and entertainment
centres outside of the city centre.
ThReATS
Current global economic uncertainties and a looming general election
still haunt sentiment going forward.
Future restrictions on the development of large scale retail centres in the
centre could stymie growth in the main shopping area of Bangkok.
However a move from quantity to quality by the constant innovative
redevelopment of existing retail space could lead to further dynamism.
Consolidation of the Hypermarket sector into effectively two main players
could lead to more monopolistic practices. However a duopoly can be
just as competitive and consumers have other choices such as
department stores and community malls if price becomes a problem.
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10. Bangkok Retail MaRket RePoRt | Q1 2011
Appendix
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11. Bangkok Retail MaRket RePoRt | Q1 2011
ReTAil lOcATiOnS
ReTAil mARkeT cATegORieS 5) Specialty Stores
6) entertainment complex (this does not include entertainment areas in
The organized retail market in Thailand can be divided into seven main
shopping malls, as these represent an intrinsic part of the shopping mall
categories, based on size, characteristics, goods sold, and pricing:
mix)
1) Shopping mall / Shopping centre
7) Supporting Retail
2) department Store (figures for this report include stand-alone stores
only; those located in shopping malls are not included) Note: For the purposes of the report, retail refers to organized retail services and
3) hypermarket excludes traditional single proprietor outlets often located in shophouses and markets
4) community mall consisting of predominantly small traders. Also, supermarkets have been excluded
from this report.
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12. Bangkok Retail MaRket RePoRt | Q1 2011
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