Bangkok Retail Market Report Q2 2010

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Th Kd Rprtco l l i e R s i n T e R n aT i o n a l | T H a i l a n D

eut summryThe most prominent shopping area in Bangkok was devastated by the political disturbances thatoccurred in Bangkok during April and May which resulted in considerable damage and destruction,ater rioting ollowing the crackdown on May 19.

Rentals rates remained stable with a slight all being recorded in the centre due to the protests

occurring there.

Around 110,000 sq m o retail space was completed in the rst hal o 2010 and 126,000 sq m isscheduled to come online in H2 2010.

The Outer City area is set to remain the largest location o retail space in Bangkok. Shopping mallsdominate but community malls are also setting an ever growing trend or the retail market.

MaRKeT inDicaToRs

Q1 2010 - Q2 2010

sUPPlY

DeManD

RenTals

occUPancY

www.colliers.co.th

B a n g Ko K R e Ta i l M a R K e T | 1 s T Q Ua R T e R | 2 0 1 0


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ReTail locaTions

The Knowledge Report | 2nd Quarter | 2010 | Bangkok Retail Market


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ReTail MaRKeT caTegoRies

The organized retail market in Thailand can be divided intoseven main categories, based on size, characteristics, goods sold,and pricing.

1) Shopping Mall / Shopping Centre 2) Department Store (gures or this report include

stand alone stores only, those located in shoppingmalls are not included)

3) Hypermarket4) Community Mall

5) Specialty Stores 6) Entertainment Complex (this does not include

entertainment areas in shopping malls as theserepresent an intrinsic part o the shopping mallmix)

7) Supporting Retail

Note: For the purposes o the report retail reers to organizedretail services and excludes traditional single proprietor outletsoten located in shophouses and markets consisting o predomi-

nantly small traders. Also supermarkets have been excluded romthis report.

HisToRical sUPPlY

Approximately 236,000 sq m. is scheduled to be completed bythe end o 2010 with around 110,000 sq m completed in the rsthal o 2010.

Q2 o 2010 was a dicult period or retail businesses, particularlyretail centres located around the Rajprasong intersection whichwere directly aected by the protest taking place in the centre othis intersection. Every retail building in the area was closed ormore than one month during the protests. Central World suered

most damage rom the protests with its anchor Zen DepartmentStore being completely destroyed while Zen tower was partiallydestroyed. Center One, located in Victory Monument area, wasalso reduced to rubble rom this protest and Big C Rajadamri wasdamaged on the ground foor. CPN planned to close the whole

Central World or renovation until October 2010 while IsetanDepartment Store in Central World reopened on 24 June andCenter Ones owner required more time than the intended oneyear or renovation. Central Pattana delayed the 3.6 billion bahtrenovation o Central Ladprao until February 2011 due to theclosure o Central World.

While the City area was impacted rom political violence, theOuter City and Suburban area suered ar less. Siam Piwat, the

operator o Siam Center, opened a new shopping mall on Srina-karin road, ater they bought the original Seri Center which wasthen renovated and renamed Paradise Park.

Source : Colliers International Thailand ResearchRemark : E = Estimated supply



Since 2007 onwards until Q2 2010, retail space in the Outer Cityarea increased by more than 13% while Suburban Bangkok

North area increased more than 34%, due to lower land pricesin these zones and the proximity o these locations to a strongcustomer base.

More residential projects, especially condominiums, arebeing undertaken in the Outer City and Suburban areas, so

retail developers are ocusing their attention on serving the needso these new residents. The greater density o condominium

developments compared with landed property means greateropportunities or retail developers.

BReaKDown o ReTail sPace in BangKoK BY locaTion anD YeaR, Q2 2010


Source : Colliers International Thailand ResearchRemark : Suspended supply



BReaKDown o UTURe sUPPlY in BangKoK BY caTegoRY, Q2 2010

BReaKDown o UTURe sUPPlY in BangKoK BY locaTion, Q2 2010


UTURe sUPPlY

Source : Colliers International Thailand Research


The uture supply scheduled to be completed is approximately126,000 sq m or the second hal o 2010 and more than 220,000sq m in 2011. In Q4 2011 Central Rama 9 on Ratchadapisek

Rama 9 Intersection, is scheduled to be completed with a totalarea o approximately 120,000 sq m., increasing the supply oshopping malls.

The Outer City area still remains the most popular location orretail. Alongside Central Rama 9, located in Outer City area,

other retail projects are under development, such as GatewayEkkamai, JJ Center and The Nine.




The rst hal o 2010 was an extremely dicult time or the retailmarket in the City area, especially around the Rajprasong inter-section where retail centres were orced to close or more thantwo months during the protests.

The take up rate in the City area decreased rom Q1 by approxi-mately 0.5% and signicant revenue was lost while take up ratesin the Outer City and Suburban Bangkok area increased 2% and1% respectively.

DeManD TaKe UP

BReaKDown o HisToRical TaKe UP RaTe o ReTail sPace BY locaTion, 2000 - Q2 2010




Take up rate o all categories, except supporting retail, ismore than 90% and has remained robust throughout the pastturbulent 18 months. The low take up rates o supporting retailcentres can be attributed to the earlier trend or developinglarge supporting retail space within an oce building. This

space in many centres has been too large in relation to demand

coming rom oce workers in the building and are also unable tointerest signicant numbers o shoppers rom outside who aremore attracted to a stand alone retail centres. Many o theseoutlets on the higher foors have been converted into ocespace and recent and uture oce developments have been less

ambitious with any retail component.


TaKe UP RaTe o cURRenT sUPPlY BY caTegoRY, Q2 2010

TaKe UP RaTe o cURRenT sUPPlY BY locaTion, Q1 - Q2 2010



Take up rates or retail in Q2 2010 was higher except or theCity area which decreased rom Q1 by approximately 0.5%, dueto the political gathering at Rajprasong intersection, the primelocation or retail market in Bangkok. In the Outer City takeup was better than Q1 by approximately 2%, because o damageinficted on Central World and Center One which resulted insome outlets moving to the Outer City and Suburban Bangkokarea.

The highest take up rate is in the Suburban Bangkok Northarea with approximately 97% ollowed by Outer City area withapproximately 96%. The lowest rate is in City area at about 95%.The alls in tourism have aected the City area as this is locatedin a prime tourism district and many higher end outlets rely moreon oreign demand than in other locations.



The alls in consumer condence rom 2003 until the presentday refect the ongoing political uncertainty in the country,

various health outbreaks such as bird fu and the economicdownturn that occurred at the end o the decade. While condence

began to take on a sustained upward path in the winter periodo 09/10, this was severely dented ollowing the protests in April

and May.

Credit card usage over the past ve years has increased morethan 198% and these cards are oten used in organized retail

centres. The recent numbers indicate a all in spending during theprotests.

DeManD DRiveRs ocUs

consUMeR coniDence inDex (cci)

DoMesTic cReDiT caRD Usage volUMe

Source : Bureau of Trade and Economic Indi ces, Colliers International Thailand Research

Source : Bank of Thailand, Colliers International Thailand Research




PlanneD BRanD BRancH exPansion in THailanD DURing THe YeaR 2010

Brd Prdut n tr pd

T p 2010n suk Rturt 3

MK Rturt Rturt 20

Pppr luh Rturt 5

szzr Rturt 5

Dry Qu Rturt 27

Kzkut Rturt 3-5

oh shbuh Rturt 8-10

Md ok shkud Rturt 3-5

Bk cy Rturt 12

Mtr Dut t d 16

Duk Dut t d 20

Brd Pp t d 10

Dddy Duh t d 15

Pzz Hut t d 20

M Burr t d 3

chtr gr t d 20

MDd t d 15-17

Th Pzz cmpy t d 17

Burr K t d 3

Brd Pp t d 10

Bpp t d 10

Mr. Bu t d 50

s&P t d 40

Dddy Duh t d 15

Pzz Hut t d 20

M Burr t d 3

Rd M i crm 3

s i crm 9

cd st crmry i crm 10

gr J c c shp 4

Bdy shp c c shp 1-2

J Mrt Ph & ar shp 93

TwZ shp Ph & ar shp 5smrt eh edut 12

Urh edut 2

B2s Bk str 1

n i Bk str 50

se - eD Bk str 20

sth wth shp 3

Bdy shp lty shp Hthy shp 1-2

wt cmt d Phrmy 15

ort Pr cmt 6

t rt sprt cub 1-2

Dy rm Mk Prdut 4-5iKea urtur ctr 1





PlanneD BRanD BRancH exPansion in THailanD DURing THe YeaR 2010

Brd Prdut n tr pd

T p 2010Bthr T & stry wr 2

wzrd cr cr 15

cP rh Mrt c str 30

7-11 c str 400

v Mrkt supr Mrkt 2

Tp Dy supr Mrkt 40

Tp Mrkt supr Mrkt 3

Tp suprmrkt supr Mrkt 2

M crrur supr Mrkt 10

M B c supr Mrkt 10



The planned expansions rom retailers or brands were hit bythe protests in Bangkok rom the end o February at the prime

retail centers in the city. However many players wish to expand orenter the market or the rst time.

The rental rates in the City area were aected by the protestviolence, and they decreased by nearly 2%, but in other areas the

rates remained the same rom the last quarter.

RenTals

RenTal RaTe





oRecasT

The expansion o retail in Bangkok will continue to take placeoutside the centre as uture laws are likely to restrict retaildevelopment in the prime retail areas in the centre. Howeverdevelopers will thus ocus on quality rather than quantity in thecentre with greater emphasis on utilization o existing space andmore inventive ways o driving shoppers up its foors, a constantchallenge or the retail industry.

With a squeeze on new supply in the centre, expect uture growthin rental rates with a greater dierentiation between rates inthe centre and those urther out where most new supply will belocated.

Future attacks are likely to prompt tighter security measures inthe retail outlets including body checks and CCTV monitoringaiming to reduce the risk rom terrorism. This is commonplace inthe Philippines and does not aect the retail environment.

Future residential development will go a long way in determin-ing the direction o retail growth with more community mallslikely to spring up to cater or condominiums located nearthe mass transit lines and the increase in large scale, low costprojects in the suburbs.


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conTacT inoRMaTion

THailanD:Patima JeerapaetManaging [email protected]

Narumon RodsiravoraphatHead of [email protected]

Antony PiconSenior Manager | [email protected]

Surachet KongcheepManager | [email protected]

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480 oices in 61 coUnTRieson 6 conTinenTs

Us$ 1.9 Billion in annUal RevenUe

1.1 Billion sQUaRe eeT UnDeR

ManageMenT

15,000 PRoessionals

Colliers International Thailand

Bangkok Ofce : 17/F Ploenchit Center, 2 SukhumvitRd. , Klongtoey, Bangkok 10110Tel: 662 656 7000 Fax: 662 656 7111Email : [email protected]

Pattaya Ofce : 519/4-5, Pattaya Second Road(Opposite Central Festival Pattaya Beach),Nongprue, Banglamung, Chonburi 20150Tel: 6638 364 411-2 Fax: 6638 364 414Email : [email protected]

collieRs inTeRnaTional THailanDManageMenT TeaM

ASSET MANAGEMENTWasan Rattanakijjanukul | Manager

Nukarn Suwatikul | Manager

CONSULTANCYNapart Tienchutima | Manager

COMMERCIAL / INDUSTRIAL /RETAILNarumon Rodsiravoraphat | Senior Manager

FACILITY / PROPERTY MANAGEMENTViroj Piromthong | Management AdvisorBandid Chayintu |Associate Director

HOSPITALITY DIVISIONJean Marc Garret | Director

INVESTMENTNukarn Suwatikul | Senior Manager

RESIDENTIALPatima Jeerapaet | Managing Director

RESEARCH & ADVISORYAntony Picon | Senior ManagerSurachet Kongcheep | Manager

VALUATIONNicholas Brown | Associate DirectorPhachsanun Phormthananunta |Manager

PATTAYA OFFICEMark Bowling | Sales ManagerSupannee Starojitski |Business Development Manager

Documents

Bangkok Retail Market Report Q2 2010