Clashing titans, mall wars, and windows of opportunity in Bangkok

June 3, 2015 / By

The opening of The EmQuartier in March 2015, a 100,000 sqm (NLA) luxury shopping centre operated by The Mall Group, has been the talk of the town in recent months, with the centre already averaging 150,000 visitors per day. The EmQuartier is the latest example of one-upmanship in Bangkok’s retail sphere between The Mall Group and Central Pattana PCL (CPN), with the two giants collectively operating one-quarter of Bangkok’s prime retail space.

The longstanding rivalry between the two operators dates back several decades, with both making their first large-scale forays into luxury retail in 2005-06 with the opening of Siam Paragon and Central World. Over the last ten years, the two centres, each of which have nearly 200,000 sqm (NLA) of space, have served as the first port of call for new domestic and foreign brands seeking high-profile entry into the Bangkok market. With both popular centres perennially fully-let, both developers have upped their game by opening new centres to take advantage of increasing domestic spending power and high-spending foreign tourist arrivals, providing a new window of opportunity for foreign brands to enter and/or expand their presence.

Since the beginning of 2014, Siam Paragon has hosted one new foreign retailer and three new branches of retailers within an existing footprint in the market. At the same time, three new foreign brands entered the market at Central World while one brand with an existing presence opened a new branch. In contrast, with the opening of Central Embassy, CPN’s newest luxury centre in 2Q14, 28 new-to-market foreign brands opened while 16 brands with an existing presence opened new branches. By the same token, foreign brands seized on the opening of EmQuartier, with 18 new-to-market brands opening branches with a further 23 branch expansions.

The intense rivalry between dueling operators is perhaps best illustrated by The Mall Group’s press release on 7 May 2014, one day before the opening of Central Embassy, detailing its planned USD 700 million investment to create The EM District, a mixed-use development with more than 650,000 sqm (GFA) of retail space, in which the existing Emporium and now The EmQuartier centres reside.

CPN’s response in 1Q15 rang loud, with the announcement of an agreement with other real estate developers to connect 18 buildings in the Ratchaprasong district, one of the most high-profile destinations in the city, where three major CPN shopping centres exist, including Central World. The 3-year plan relies on the concept of “Walkable Urbanism” to link the retail, office, MICE and hospitality markets in the area together via pedestrian walkways that are expected to support daily foot traffic of 600,000 – 800,000.

While the market seems to be adopting an “if you build it, they will come” mentality, if recent successes can be replicated in new planned investments, Bangkok’s Clashing Titans should remain a good bet for foreign retailers looking to enter Thailand for the first time or expand their footprint.

Current Prime Retail Stock in Bangkok by Key Developers, 1Q15

Picture2_3Jun2015Source : JLL Research


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