Bangkok retail market recovered from floods

CBRE measured the level of shopping-centre development in 180 of the world’s major cities to identify the most active markets, both in terms of 2011 completions and space currently under construction.

The research found that development activity had reached significant levels, with 29.6 million square metres under construction globally – equivalent to all the combined existing space in France, the United Kingdom and Germany – while 7.8 million square metres of new space opened last year.

Emerging markets such as China, Turkey and India are far more active than the more mature markets of Western Europe and North America.

Last year, new shopping centres opened in 63 of the cities covered in the survey, of which 50 were in emerging markets. In contrast, only five cites in Western Europe saw the opening of a new centre.

"In Bangkok, the retail market saw a full recovery from the floods of 2011. All retail stores closed during the floods were reopened and retail sales improved," said James Pitchon, executive director – head of CBRE Research in Thailand.

"The two key trends are community malls in Bangkok and expansion of major retail developers to upcountry; CPN, the country’s leading retail property developer with a 22-per-cent market share of leasable area of Bangkok’s shopping malls, plans to open five new malls upcountry within this year."

The company said the total retail supply in Bangkok as of the first quarter of this year had risen to 5.75 million square metres, an increase of 1 per cent from the final quarter of last year and 5 per cent from the same period a year ago, with the majority of new additions in the community mall format.

Bangkok’s retail supply increased in all areas – downtown, midtown and the suburbs – during the quarter. More than half of the retail centres are in the shopping-mall formats. About 500,000 square metres of retail space is expected to be completed this year.

Chinese cities

Chinese cities currently dominate shopping-centre construction activity. In the 180 cities analysed, exactly half of all the space under construction is in China, with Asia accounting for 70 per cent of all schemes currently being built.

Outside China, the most active markets are Abu Dhabi, Hanoi, Kuala Lumpur (Klang Valley), |New Delhi and Sao Paolo.

Sebastian Skiff, executive director of CBRE Retail in Asia, said: "Due to the rapid increase of middle-class populations around the world, shopping-centre developments are on the rise to satisfy growing consumer demand. The shopping-centre concept has morphed into an integral element of retail development, especially in the East.

"With development now expanding rapidly not only in Beijing and Shanghai but also deeper into the highly populated provincial capitals, China is topping the charts for development growth and seeing great opportunities for expansion in these large cities.

"With this momentum, China will undoubtedly continue the push for more and better shopping centres, replicating the best retail venues now found around the world."

New shopping centres were completed in just 15 of the 96 European cities covered in the survey. Outside Russia and Turkey, only Ukraine and Italy saw the completion of more than one new centre.

Likewise, there was virtually no new development in the mature markets of North America and the Pacific region.

Skiff said that overall, retailers had shifted their focus to exploring new markets and opportunities in which they are able to grow their businesses and carry out cross-|border expansion initiatives.

This is contributing to the escalation of high-quality retail space in emerging markets, such as China, Malaysia and Vietnam.