Developers show resilience, sustaining solid demand amid market headwinds

• Throughout 2025, Bangkok’s prime retail market navigated challenges from post-pandemic supply buildup, economic headwinds and tourism setbacks. Despite these pressures, overall occupancy and leasing momentum remained strong in Q4 2025.
• In the quarter, new entertainment anchors emerged as leading contributors to net absorption, while F&B and fashion tenants continued to drive take-up. Both domestic and international tenants, particularly Chinese brands, underpinned this steady demand growth.

Vacancy continues to decline as supply pressure eases

• Prime retail stock remained unchanged at 3,871,500 sqm during the quarter. With no new supply completions, the market continued to gradually absorb available space in recently opened or refurbished malls since Q4 2024.
• Developers sustained healthy occupancy through proactive leasing, targeting both new-to-market international retailers and emerging domestic brands. Marketing campaigns and seasonal events also played a key role in maintaining steady footfall.

Yields compress further as rental growth moderates

• Prime retail gross rents recorded their slowest growth since Q1 2023, rising marginally by 0.9% q-o-q to THB 2,670 per sqm per month. The deceleration reflected the conclusion of the post-COVID recovery phase and the onset of a more cautious market period.
• Recent supply growth, combined with softer retail sentiment among both locals and tourists, weighed on rental growth as landlords adjusted expectations in favour of maintaining occupancy. As a result, market yields compressed further by 5 bps q-o-q to 8.7%.

Outlook: Slower rental growth is anticipated with selective demand recovery

• The CBA retail market expects gradual demand recovery, as no new mega projects are slated for completion, allowing continued absorption of existing space. Rental growth will likely moderate further as landlords emphasise tenant retention.
• Decentralised submarkets, however, face increasing pressure from upcoming large-scale projects in 2026 and continued growth in Community Centre supply across suburban areas, alongside persistent economic weakness constraining domestic spending.