Shopping mall business rebounds

Nattha noted that the retail market in Bangkok rebounded strongly in mid-2023 due to an increase in foreign tourists. Some 12.9 million foreign tourists had visited Thailand by the end of June, and it is estimated that by the end of 2023, the total will reach 28.5 million, approximately 71% of the 2019 pre-Covid level.

From January to May of this year, the top five nationalities of tourists visiting Thailand were Malaysians (2.10 million), Chinese (1.44 million), Russians (791,000), South Koreans (763,000), and Indians (761,000). This positive trend in international tourism has significantly impacted the retail market in Bangkok, Nattha noted.

In the first quarter of this year with revenue recovering to near pre-Covid levels, many shopping centres felt able to discontinue the significant discounts on leases, maintaining them at around 0-4%.

Revenue was also boosted by various promotional events, especially during festivals, and tenants have been gradually returning, especially businesses related to foods, restaurants, beauty and wellness services.

As of mid-2023, Bangkok had about 7.6 million square metres of retail space. However, many new projects have yet to open due to the overall economic situation and several large shopping centre projects are still under construction, such as One Bangkok, Bangkok Mall, Dusit Central Park and The EmSphere.

Retail businesses within the major shopping centres have consistently recovered, driven by an increase in workers returning to the office, international visitors and consumer spending stimulation measures.

Data compiled from leading shopping centre operators in Thailand show that overall revenue has recovered to 87% of the pre-Covid period. The average profit margin has reached 76%. For the Thai retail sector this year, it is anticipated that the recovery will be close to that of 2019, Nattha said.