One of the most complicated types of real estate development, according to CBRE Thailand is retail property, due to changes in consumer needs. 

Since establishing an office in Bangkok over 30 years ago, CBRE notes a fast change in Thailand's retail market with the growth of E-commerce.  

30 years ago, the Bangkok retail property market was limited to a handful of department stores and a few shopping centres like CentralPlaza Ladprao, Amarin Plaza, and the original Siam Centre. While the rest of the sector was made up primarily of shophouses and wet markets.

CBRE Research shows that there is now almost 7.5 million sqm of modern retail property in Bangkok, split between shopping centres at 46.5%, big box stores at 17.7%, department stores at 15.1%, community malls at 14.5% and other formats at 6.1%.

Source: CBRE Research Thailand, Q2 2018

Over the last three decades, CBRE has observed an increased move from traditional retail in wet markets and shophouses to modern retail formats ranging from convenience stores and community malls to giant regional shopping centres such as CentralPlaza Westgate.

The modern retail format has spread throughout Thailand with many provincial cities now having modern shopping centres. However, the challenge of E-commerce is now an issue facing the Thai retail market also. 

Currently, E-commerce sales account for less than 1% of total retail sales in Thailand, but this is expected to grow rapidly as E-commerce platforms and infrastructure, including payment systems and distribution, have now been established.

Source: Electronic Transactions Development Agency, August 2018

“Simply building a nice glass box and filling it with brand names, will not work anymore, “said Ms Jariya Thumtrongkitkul, Head of Advisory and Transaction Services - Retail at CBRE Thailand. 

“Many retailers are trying to pursue an omnichannel approach with both online and offline channels that are fully integrated whereby the digital and physical options complement each other.” 

“The shopping centre is one of the most successful business models and will not fade away, but competition from E-commerce means that the model will have to evolve to survive,” Thumtrongkitkul.

For more information about the future of E-commerce in Thailand's retail space, phone or email Ngamjai Jearrajarat, Head of Marketing and Communications, CBRE Thailand. 

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