Market Overview

The Bangkok retail market, as of mid-2023, has made a significant recovery, thanks to an increasing number of foreign tourists since last year. The number of foreign arrivals as of June 2023 stood at 12.9 million. It is anticipated to reach a total of 28.5 million, which is approximately 71% of the levels seen in the year 2019, before the Covid-19 pandemic, by the end of this year. From January to May 2023, the top 5 countries in terms of foreign arrivals are as follows: 1. Malaysians: 2.10 million 2. Chinese: 1.44 million 3. Russians: 791 thousand 4. South Koreans: 763 thousand and 5. Indians: 761 thousand. 

Overall, the Bangkok retail market is on a positive trajectory in 2023, with foreign tourism playing a significant role in its recovery.

In the first quarter of 2023, retailers in Bangkok made several adaptations. Large shopping centres either cancelled rental discounts or offered discounts of approximately 0-4% after the number of arrivals returned to 80% of the pre-Covid-19 period. The recovery in the number of foreign arrivals has been swift. In 2019, there were 39.9 million foreign arrivals, and it is expected to reach 28-30 million arrivals in 2023.

The total revenue of shopping centres has recovered to 50%-60% of the pre-Covid period. Celebrations were held for every festival, and new community malls have started to be developed, especially in proximity to international schools. There has been an accelerated push for mobile applications and increased stimulation of sales through promotions and gamification with various coin rewards.

Moreover, demand has rebounded, and tenants are returning to sign rental contracts in almost every segment, particularly in the restaurant segment, which includes shabu, grilled pork, and beauty, health, and wellness establishments.

Supply

The total supply of retail properties in Bangkok and its surrounding areas was approximately 7.6 million square meters. There haven't been many new project openings due to the ongoing recovery of the economy and the tourism sector. Furthermore, most mega shopping centres, including One Bangkok, Bangkok Mall, Dusit Central Park, and The EmSphere, are currently under construction.

Demand

On the demand side, the shopping centre business is experiencing continuous recovery. Positive factors have emerged due to the resolved COVID-19 situation. Shopping centers are intensifying their activities and running promotions consistently during every festival. The increasing number of office workers and foreigners, coupled with government stimulus schemes like "Shop Dee Me Kuen" and spending stimulus schemes during the election period, have significantly boosted consumption.

 It has been observed that the total revenue of leading shopping centres in Thailand has recovered to 87% of the pre-Covid-19 period, while overall profitability has reached 76%. For the operating results in 2023, it is anticipated that they will recover to levels very close to those seen in 2019.