The retail market in Bangkok remained resilient in 2010 against the backdrop of the troubles in April and May, according the latest report from the Colliers International Thailand. Rentals remained stable over the year and th ere was even a slight uptick in occupancy in all areas. Around 185,000 sq m of retail space was added to supply in 2010 and in Q4 five community malls came online adding approximately 38,000 sq m. Although these community malls are small in size they represent an increasing feature of people’s daily lives, according to Patima Jeerapaet, Managing Director of Colliers. “They fit into the pattern of condominium development around the city”, he pointed out. “They are also beneficial to the environment as they reduce the need to drive long distances to shop”, he added.
The big story for 2010 was the sale of Carrefour’s hypermarkets to Big C, another hypermarket chain. This will create something approaching a duopoly and the high price recorded for the sale reflects the new reality for the retail sector in Bangkok’s urban area, contends Antony Picon, Senior Manager for Research at Colliers. “Impending legislation restricting large scale retail development in the centre of the city will lead to existing retail centres having a premium attached to them”, he said. Mr Picon believes that the Carrefour episode is unlikely to be last. “Developers are likely to scramble for these increasingly prized assets”, he added.
Future supply for 2011 is expected to be just shy of 300,000 sq m based on current projections. However one of the key stories over the next few years is the renovation of existing centres. Mr Picon referred to the total difference in design of retail centres now and those that are decades old. “Modern centres have designs that entice people to move up its levels by allowing them to see what is above, where older centres just have straight forward ceilings that block the views of the uppers floors”, he explained. Mr Picon pointed out that older retail centres need to be refurbished in order to maintain their customer base. “When a new centre is placed alongside a much older one the difference in appeal can be stark, so developers have no choice but to upgrade in order to remain competitive” he said.