Demand for prime retail space remains resilient

• Despite persistent headwinds and supply pressures, Bangkok’s retail market sustained positive momentum in Q3 2025, recording quarterly net absorption of 43,700 sqm, generated from both newly completed and existing projects.
• F&B tenants led demand trends, accounting for half of total take-ups, followed by the household retailers. The market also benefited from a resurgent international brand leasing activity, with a 50% q-o-q increase in number of deals.

Vacancy improvement hindered by temporary renovation activity

• Positive demand trends contributed to a marginal improvement in the vacancy rate by 9 bps q-o-q to 4.6%. Ongoing renovation works in major shopping centres created temporary vacancy, and subsequently limiting further recovery prospects.
• On the supply side, Bangkok’s prime retail stock reached 3,871,500 sqm, representing a 1.1% q-o-q increase following the completion of Central Park Bangkok. This new mixed-use development by Central Pattana PCL added 42,000 sqm to the market.

New premium supply and robust demand supports positive rental growth

• Bangkok’s prime net effective rent increased by 1.7% q-o-q, reaching THB 1,714 per sqm per month. This growth, improved from the previous quarter, was primarily driven by new projects commanding premium rents above market average.
• Whilst market yield remained stable at 8.75% in Q3 2025, ongoing macroeconomic challenges and weak consumer and tourist sentiment continued to exert pressure, despite sustained momentum in demand and rental trends.

Outlook: Mounting pressure drives market transformation to achieve sustained growth

• Two further prime retail projects are anticipated to add 85,000 sqm to Bangkok’s retail market in H1 2026, increasing supply pressure amid already fragmented consumer sentiment and ongoing economic challenges.
• Intensified competition is likely to result in further yield compression, as developers and operators increase investment in innovative retail concepts and managing higher occupancy costs to remain competitive.