As purchasing power slows in mature markets like the USA and the Eurozone, international luxury and high street brands are seeking expansion opportunities in dynamic, rapidly growing Asian markets. Thailand is fast becoming the destination of choice for a number of these brands and for international tourists from large, high-expenditure source markets alike. Locating in Bangkok offers retail brands the combination of low rents and high exposure to both domestic and foreign consumers. With 1.54 million sqm of prime grade specialty space, rents in Bangkok as of 2Q13 are roughly USD 72 per sqm per month, much lower than the USD 323 per sqm per month found in Singapore and the USD 424 per sqm per month in Hong Kong.
Looking ahead, we expect new international brands to enter the Thai market along with existing brands expanding their market presence, attracted by low rents in prime centres and the growing purchasing power of both domestic and foreign consumers. Many brands are choosing to locate in one of two new high-profile projects expected to come online in the next 12 months from Thailand’s leading retail developers, Central Group and The Mall Group. Central Embassy, with a GFA of 71,000 sqm, has achieved a pre-commitment rate of 90% and will include stores by Chanel, Gucci, Prada, Hermes and Paul Smith, while Emquartier, with a GFA of 200,000 sqm, has achieved a pre-commitment rate of 100%.