Leasing activities resume as new supply enters the market

• Leasing activities picked up in Q4 2024 after minimal movement in the first three quarters of 2024. Active demand was observed in newly opened centres, with tenants securing space ahead of the festive season.
• International brands expanded consistently throughout the year, with nearly 150 deals recorded across prime centres in Q4 2024. F&B tenants dominated activities in the CBA, while mass-market fashion drove growth in suburban areas.

Market continues to be resilient despite supply influx

• Bangkok’s prime retail vacancy rate recorded a slight increase of 5 bps q-o-q to 4.7% in Q4 2024. Positive drivers, such as the high tourist season and growth in private consumption from government stimulus, were offset by supply pressures.
• Over 200,000 sqm of new and refurbished prime retail space was introduced to the CBA market during the quarter, while several large-scale centres in decentralised submarkets underwent asset enhancement initiatives.

New and refurbished premium centres fuel rental growth

• Prime gross rents showed significant growth of 2.8% q-o-q in Q4 2024, contributing to the continuous improvement since 2023, fuelled by the post-pandemic recovery and the opening of high-end shopping centres with premium rental rates.
• The introduction of new projects also reflected significant capital value growth. However, this trend has put pressure on yields as tightening competition has forced developers and owners to invest more in asset enhancement to stay competitive.

Outlook: Intensifying competition to reshape Bangkok retail landscape

• The ongoing challenges caused by supply pressures are likely to persist or intensify with the upcoming mega-scale retail centres, the reintroduction of under-renovation projects, and more big players entering the small-scale retail scene.
• However, intensifying competition should drive innovative retail concepts, potentially elevating Bangkok’s retail scene to compete as a regional destination. This aligns with expected tourism growth, a key driver of retail performance in 2025.