c o l l i e r s i n t e r n at i o n a l | T H AILAN D

The Knowledge Report

B a n g ko k R e ta i l M a rk e t | 1 s t Q U A RT E R | 2010

Executive Summary
The most prominent shopping area in Bangkok was devastated by the political disturbances that
occurred in Bangkok during April and May which resulted in considerable damage and destruction,
after rioting following the crackdown on May 19.
Market Indicators
Rentals rates remained stable with a slight fall being recorded in the centre due to the protests
occurring there.
Q1 2010 - Q2 2010
Around 110,000 sq m of retail space was completed in the first half of 2010 and 126,000 sq m is
scheduled to come online in H2 2010.
SUPPLY
The Outer City area is set to remain the largest location of retail space in Bangkok. Shopping malls
Demand dominate but community malls are also setting an ever growing trend for the retail market.

Rentals

occupancy

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The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

Retail Locations

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 The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

Retail Market Categories

The organized retail market in Thailand can be divided into Note: For the purposes of the report retail refers to organized
seven main categories, based on size, characteristics, goods sold, retail services and excludes traditional single proprietor outlets
and pricing. often located in shophouses and markets consisting of predomi-
nantly small traders. Also supermarkets have been excluded from
1) Shopping Mall / Shopping Centre this report.
2) Department Store (figures for this report include
stand alone stores only, those located in shopping
malls are not included)
3) Hypermarket
4) Community Mall
5) Specialty Stores
6) Entertainment Complex (this does not include
entertainment areas in shopping malls as these
represent an intrinsic part of the shopping mall
mix)
7) Supporting Retail

Historical Supply

Source : Colliers International Thailand Research

Remark : E = Estimated supply

Approximately 236,000 sq m. is scheduled to be completed by
the end of 2010 with around 110,000 sq m completed in the first
half of 2010.
Q2 of 2010 was a difficult period for retail businesses, particularly
retail centres located around the Rajprasong intersection which
were directly affected by the protest taking place in the centre of
this intersection. Every retail building in the area was closed for
more than one month during the protests. Central World suffered
most damage from the protests with its anchor Zen Department
Store being completely destroyed while Zen tower was partially
destroyed. Center One, located in Victory Monument area, was
also reduced to rubble from this protest and Big C Rajadamri was
damaged on the ground floor. CPN planned to close the whole
Central World for renovation until October 2010 while Isetan
Department Store in Central World reopened on 24 June and
Center One’s owner required more time than the intended one
year for renovation. Central Pattana delayed the 3.6 billion baht
renovation of Central Ladprao until February 2011 due to the
closure of Central World.
While the City area was impacted from political violence, the
Outer City and Suburban area suffered far less. Siam Piwat, the
operator of Siam Center, opened a new shopping mall on Srina-
karin road, after they bought the original Seri Center which was
then renovated and renamed Paradise Park.

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The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

Breakdown of retail space in Bangkok by location and year, Q2 2010

Source : Colliers International Thailand Research

Remark : Suspended supply

Since 2007 onwards until Q2 2010, retail space in the Outer City
area increased by more than 13% while Suburban Bangkok –
North area increased more than 34%, due to lower land prices
in these zones and the proximity of these locations to a strong
customer base.
retail developers are focusing their attention on serving the needs
of these new residents. The greater density of condominium
developments compared with landed property means greater
opportunities for retail developers.

More residential projects, especially condominiums, are

being undertaken in the Outer City and Suburban areas, so

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 The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

Future Supply

Breakdown of future supply in Bangkok by category, Q2 2010

Source : Colliers International Thailand Research

The future supply scheduled to be completed is approximately Rama 9 Intersection, is scheduled to be completed with a total
126,000 sq m for the second half of 2010 and more than 220,000 area of approximately 120,000 sq m., increasing the supply of
sq m in 2011. In Q4 2011 Central Rama 9 on Ratchadapisek – shopping malls.

Breakdown of future supply in Bangkok by location, Q2 2010

Source : Colliers International Thailand Research

The Outer City area still remains the most popular location for other retail projects are under development, such as Gateway
retail. Alongside Central Rama 9, located in Outer City area, Ekkamai, JJ Center and The Nine.

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Demand – Take up

Breakdown of historical take up rate of retail space by location, 2000 - Q2 2010

Source : Colliers International Thailand Research

The first half of 2010 was an extremely difficult time for the retail The take up rate in the City area decreased from Q1 by approxi-
market in the City area, especially around the Rajprasong inter- mately 0.5% and significant revenue was lost while take up rates
section where retail centres were forced to close for more than in the Outer City and Suburban Bangkok area increased 2% and
two months during the protests. 1% respectively.

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 The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

Take up rate of current supply by category, Q2 2010

Source : Colliers International Thailand Research

Take up rate of all categories, except supporting retail, is
more than 90% and has remained robust throughout the past
turbulent 18 months. The low take up rates of supporting retail
centres can be attributed to the earlier trend for developing
large supporting retail space within an office building. This
space in many centres has been too large in relation to demand
coming from office workers in the building and are also unable to
interest significant numbers of shoppers from outside who are
more attracted to a stand alone retail centres. Many of these
outlets on the higher floors have been converted into office
space and recent and future office developments have been less
ambitious with any retail component.

Take up rate of current supply by location, Q1 - Q2 2010

Source : Colliers International Thailand Research

Take up rates for retail in Q2 2010 was higher except for the
City area which decreased from Q1 by approximately 0.5%, due
to the political gathering at Rajprasong intersection, the prime
location for retail market in Bangkok. In the Outer City take
up was better than Q1 by approximately 2%, because of damage
inflicted on Central World and Center One which resulted in
some outlets moving to the Outer City and Suburban Bangkok
area.
The highest take up rate is in the Suburban Bangkok – North
area with approximately 97% followed by Outer City area with
approximately 96%. The lowest rate is in City area at about 95%.
The falls in tourism have affected the City area as this is located
in a prime tourism district and many higher end outlets rely more
on foreign demand than in other locations.
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Demand Drivers Focus

Consumer Confidence Index (CCI)

Source : Bureau of Trade and Economic Indices, Colliers International Thailand Research

The falls in consumer confidence from 2003 until the present began to take on a sustained upward path in the winter period
day reflect the ongoing political uncertainty in the country, of 09/10, this was severely dented following the protests in April
various health outbreaks such as bird flu and the economic and May.
downturn that occurred at the end of the decade. While confidence

Domestic credit card usage volume

Source : Bank of Thailand, Colliers International Thailand Research

Credit card usage over the past five years has increased more centres. The recent numbers indicate a fall in spending during the
than 198% and these cards are often used in organized retail protests.

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 The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

Planned brand branch expansion in Thailand during the year 2010

No of stores planned
Brand Product To open in 2010
Neo Suki Restaurant 3
MK Restaurant Restaurant 20
Pepper Lunch Restaurant 5
Sizzler Restaurant 5
Dairy Queen Restaurant 27
Kazokutei Restaurant 3-5
Oishi Shabushi Restaurant 8-10
Maido Ookini Shokudo Restaurant 3-5
Black Canyon Restaurant 12
Mister Donut Fast Food 16
Dunkin Donut Fast Food 20
Beard Papa’s Fast Food 10
Daddy Dough Fast Food 15
Pizza Hut Fast Food 20
Mos Burger Fast Food 3
Chester’s Grill Fast Food 20
McDonalds Fast Food 15-17
The Pizza Company Fast Food 17
Burger King Fast Food 3
Beard Papa’s Fast Food 10
Bapple Fast Food 10
Mr. Bun Fast Food 50
S&P Fast Food 40
Daddy Dough Fast Food 15
Pizza Hut Fast Food 20
Mos Burger Fast Food 3
Red Mango Ice Cream 3
Swensen’s Ice Cream 9
Cold Stone Creamery Ice Cream 10
Gloria Jean’s Coffees Coffee Shop 4
Body Shape Cafe Coffee Shop 1-2
J Mart Phone & Accessories Shop 93
TWZ Shop Phone & Accessories Shop 5
Smart English Educational 12
Unisearch Educational 2
B2S Book Store 1
Nai In Book Store 50
SE - ED Book Store 20
Swatch Watch Shop 3
Body Shape Lifestyle Shop Healthy Shop 1-2
Watson Cosmetics and Pharmacy 15
Oriental Princess Cosmetics 6
Fitness First Sports Club 1-2
Daily Farm Milk Product 4-5
IKEA Furniture Center 1
Source : Colliers International Thailand Research

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The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

Planned brand branch expansion in Thailand during the year 2010

No of stores planned
Brand Product To open in 2010
Boonthaworn Tiles & Sanitary Wares 2
Wizard Car Care 15
CP Fresh Mart Convenience Store 30
7-11 Convenience Store 400
Villa Market Super Market 2
Tops Daily Super Market 40
Tops Market Super Market 3
Tops Supermarket Super Market 2
Mini Carrefour Super Market 10
Mini Big C Super Market 10
Source : Colliers International Thailand Research

The planned expansions from retailers or brands were hit by retail centers in the city. However many players wish to expand or
the protests in Bangkok from the end of February at the prime enter the market for the first time.

Rentals

Rental rate

Source : Colliers International Thailand Research

The rental rates in the City area were affected by the protest rates remained the same from the last quarter.
violence, and they decreased by nearly 2%, but in other areas the

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 The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market
Forecast
The expansion of retail in Bangkok will continue to take place
outside the centre as future laws are likely to restrict retail
development in the prime retail areas in the centre. However
developers will thus focus on quality rather than quantity in the
centre with greater emphasis on utilization of existing space and
more inventive ways of driving shoppers up its floors, a constant
challenge for the retail industry.
With a squeeze on new supply in the centre, expect future growth
in rental rates with a greater differentiation between rates in
the centre and those further out where most new supply will be
located.
Future attacks are likely to prompt tighter security measures in
the retail outlets including body checks and CCTV monitoring
aiming to reduce the risk from terrorism. This is commonplace in
the Philippines and does not affect the retail environment.
Future residential development will go a long way in determin-
ing the direction of retail growth with more community malls
likely to spring up to cater for condominiums located near
the mass transit lines and the increase in large scale, low cost
projects in the suburbs.
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 The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market

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