Cushman & Wakefield Global Cities Retail Guide
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Cushman & Wakefield Global Cities Retail Guide
Thailand is a country located in a strategic
location, serving as a gateway into the
heart of Asia at the centre of the Indochina
peninsula in Southeast Asia. It has a market
of some 66 million people as of 2018. Thai
culture has been influenced by many
countries over the years, including Indian,
Lao, Burmese, Cambodian and Chinese.
Tourism is an important component of the Thai economy with
over 38 million visitors per annum; the majority from China,
Malaysia, Korea, Japan and India.
Thailand’s economy grew by 2.8% in Q1 2019, compared with
3.6% in the previous quarter. In 2019, the Thai economy is
projected to grow by 3.3%-3.8 driven by favourable growth in
domestic demand, improvements to the export sector, recovery
of the tourism sector, and a low base effect in the second half of
the year.
The retail sales index in Thailand has been steadily rising over
recent years, and this trend is expected to continue in 2019.
Though significant e-commerce growth, Thai retail developers
continue to enlarge their physical footprint aggressively, with
more than 1 million square meters in the pipeline.
A change of lifestyle has been impacting retail developers,
including low consumer purchasing power in the past year. The THAILAND
OVERVIEW
overall retail sector is still growing however, and online is
becoming more popular among the younger generation.
Significant growth in the value of Thai e-commerce has been
enlarged by 14% in 2018 to 3.2 trillion baht according to the
Electronic Transactions Development Agency (ETDA).
Cushman & Wakefield | Thailand | 2019 1
THAILAND
ECONOMIC OVERVIEW
ECONOMIC SUMMARY
ECONOMIC INDICATORS* 2018 2019F 2020F 2021F 2022F
GDP growth 4.1 3.4 3.2 3.0 2.9
Consumer spending 4.6 3.6 3.2 2.9 2.8
Industrial production 3.7 2.4 3.0 3.4 3.6
Investment 3.8 3.7 3.8 3.6 3.3
Unemployment rate (%) 1.1 1.1 1.2 1.2 1.2
Inflation 1.1 1.0 1.4 1.6 2.0
Baht฿/€ (average) 38.1 36.2 37.5 38.5 38.6
Baht฿/US$ (average) 32.3 31.7 31.5 31.2 30.8
Interest rates Short Term (%) 1.5 1.8 2.1 2.6 2.8
Interest rates 10-year (%) 2.6 2.6 2.9 3.3 3.4
ECONOMIC BREAKDOWN RETAIL SALES GROWTH:
% CHANGE ON PREVIOUS YEAR
Population 69.2 Million (2018)
GDP (nominal) US$ 505.1 Billion (2018)
THAILAND 2018 2019F 2020F 2021F 2022F
Public Sector Balance -1.6% of GDP (2018) Retail Volume* 6.8 6.2 5.1 4.8 4.6
Public Sector Debt 34% of GDP (2018)
Current Account Balance 6.9% of GDP (2018)
Constitutional monarchy
Parliament under military junta
Head of State King Maha Vajiralongkorn
Prime Minister Gen.Prayut Chan-o-cha
Election Date November 2018
NOTE: *annual % growth rate unless otherwise indicated. Figures
are based on local currency and real terms. E estimate F forecast.
Cushman & Wakefield | Thailand | 2019 SOURCE: Oxford Economics Ltd. 2
CITY POPULATION (2018)
Bangkok 5,676,648
Nakhon Ratchasima 2,646,401
Ubon Ratchathani 1,874,548
Khonkaen 1,805,895
Chiang Mai 1,763,742
Buriram 1,594,850
Udon Thani 1,586,666
Nakhorn Si Thammarat 1,560,433
Chon Buri 1,535,445
Srisaket 1,473,011
THAILAND
LARGEST CITIES
Cushman & Wakefield | Thailand | 2019 3
THAILAND RETAIL OVERVIEW MAJOR DOMESTIC FOOD RETAILERS Gourmet Market, Villa Market, Foodland, Tops supermarket MAJOR INTERNATIONAL FOOD RETAILERS Mark & Spencer, Donkihote, Fuji Supermarket MAJOR DOMESTIC NON-FOOD RETAILERS SuperSport, PowerBuy, Office Mate, B2S, SE-ED INTERNATIONAL RETAILERS IN THAILAND (Selection) H&M, Uniqlo, Sephora, Zara, IKEA, Boots FOOD AND BEVERAGE OPERATORS McThai, Minor Food, PTTRM, ZEN Corporation Group, MK Restaurant Group, ThaiBav, CRG Group, Central Food Retail TYPICAL HOURS MONDAY - FRIDAY SATURDAY SUNDAY 10:30 - 21:00 10:00-22:00 10:00-22:00 NEW ENTRANTS TO MARKET Gram Apple Store Irvins Song Fa Bak kut Teh Karl Lagerfeld The Alley Taco Bell RAPL ELLE Café CPS Café Cushman & Wakefield | Thailand | 2019 4
THAILAND
RETAIL SCENE
The retail market in Thailand continues The trend of international brands entering the Thai retail market
has moved on from mid-range fashion to more F&B operators,
to expand and not only in the capital of such as coffee shops and restaurants. This influx of F&B began
Bangkok. In every large city in Thailand in 2016. Additionally co-working space is booming in Thailand.
Some of the new shopping mall developments are adding co-
there are new retail developments
working space into their schemes.
underway of all sizes.
It normally takes 3-6 months for retailers to occupy retail space,
The retail market in Thailand is dominated by shopping malls and however this can vary depending on the space selected.
a couple of large developers. Many international brands are
located in prime shopping areas especially in Bangkok and also A registered Thai company is required to operate in Thailand.
have flagship stores in other large cities. Prime shopping malls Foreign companies will need to register as a Thai company, with
help to promote brand image, particularly in the Rajprasong and 51% Thai shareholding, before business can commence, unless
Sukhumvit areas. Demand is high for prime space, so in many the company is registered with the Board of Investment (BOI).
malls there is a waiting list which can take a while to get off.
E-commerce in Thailand is now booming, with the biggest player
Lazada using social media and other platforms to promote their
products at a low cost. According to A.T. Kearney’s Consumer
Industries and Retail Practice in APAC study, the online retail
market in Thailand has growth potential of $12-15 billion, or
approximately 1% of total retail sales in Thailand.
Cushman & Wakefield | Thailand | 2019 5
THAILAND
SHOPPING CENTRES
TOP TEN SHOPPING CENTRES BY SIZE
NAME CITY SIZE (GLA SQM) YEAR OPENED
Central World Bangkok 192,500 1989, 2007 renovated
Mega Bangna Bangkok 185,000 2012
Siam Paragon Bangkok 170,000 2006
Seacon Bangkae Bangkok 170,000 2012
Seacon Square Bangkok 135,000 1994
Future Park Rangsit Pathumthani 132,000 1994
Fashion Island Ramindra Bangkok 106,000 1995
Central Nakhon Ratchasima Bangkok 104,000 2017
Paradise Park Bangkok 90,000 2009
Central Grand Rama 9 Bangkok 89,600 2011
Cushman & Wakefield | Thailand | 2019 6THAILAND
KEY FEATURES OF LEASE STRUCTURE
SUB-HEADING
KEY FEATURES OF LEASE
ITEM COMMENT
Lease Terms Typical term of 1-3 years is a short term lease. A lease of 4-30 years is defined as long term lease and it is needed to have Lease Registration
at land department office. A 30-year lease is the highest number of years that can be registered at a time.
Rental Payment Rents are payable monthly in advance. Fixed monthly rents are the most practical in the market. Percentage rents are seen in some shopping
centres especially in food & beverage zones. For long lease retailers (maximum of 30-year lease term), they pay all the rent at once when they
occupy the premise and pay common area charge by monthly. A security deposit is required for a tenant for guaranteed; it practically requires
3- 6 months’ rent equivalent commonplace for a 3-year lease term.
Rent Review Indexation is not common practice but is being seen on an increasing basis. It is practical to up rent to 5%-15% in every lease term of 3-year,
the increasing is upon negotiation.
Service Charges, Repairs and Tenant is responsible for service charges; it covers utility charges and VAT of rented accommodation. Repairs and insurance of rented
Insurance accommodation is tenant’s responsibility. Landlord is responsible for repairs and insurance of building structure and common area.
Property Taxes and other costs Tenant is responsible for property tax (12.5% of rent), VAT at 7% and Common area charge. Common area charge covers the maintenance of
external rented accommodation, cost of utilities in common area, cost of management fee, security, cleaning, landscaping, air-conditioning,
servicing of elevators and escalators.
Disposal of a Lease Sub-letting is usually possible under the terms of the lease, subject to landlord’s approval. Assignment rights are not normally barred in the
lease but will also be subject to consent – which should not be unreasonably withheld. Early termination is only by break clause – to be
negotiated at outset of lease by mutual consent upon negotiation. At lease end, the tenant is responsible for re-instating the premises to the
same condition as at the start of the lease, subject to normal wear and tear. All tenant improvements must be approved by the landlord subject
to the alteration covenant in the lease and the fact that approval should not be unreasonably withheld.
Valuation Methods Retail measurements are normally quoted in sqm on a Net Internal Area basis, which excludes walls, restrooms, elevators and common areas.
Legislation Lease must be in writing and the lease document forms the standard documentation is required. Lease term over 3-year, maximum 30-year, is
needed to be registered at land department office.
Cushman & Wakefield | Thailand | 2019 7TEERAWIT LIMTHONGSAKUL Managing Director Nexus Real Estate Advisory Co., Ltd. 31st Floor, Bangkok Insurance Building/Y.M.C.A 25 South Sathorn Road, Thungmahamek Sathorn, Bangkok 10120, Thailand Tel: +662 286 8899 Mob: +6681 803 8841 teerawit@nexus.co.th No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and the same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. © 2019 Cushman & Wakefield LLP. All rights reserved.
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