Retail development will continue to expand this year with shopping malls driving the growth of retail space with health, beauty and drugstores becoming the new retail battlefield.
Surachet Kongcheep, associate director of Colliers International Thailand, said 14 retail projects will open in Bangkok and its suburbs this year. Of the total, five are shopping malls, seven community malls, one department store and one retail plaza in an office building.
The 14 projects will create 272,800 square metres of space. Of the total, about 178,640 sq m will come from shopping malls, 51,850 sq m from community malls, 36,000 sq m from department stores and 6,310 sq m from retail space in office buildings.
As of Nov 30, 2016, total retail space nationwide was 18 million sq m from 91 shopping projects, according to the Thai Shopping Centre Association (TSCA).
Colliers said the seven community malls that are due to open in Bangkok this year are We Retail Nana with 2,100 sq m on Sukhumvit Road, ZY Walk Chula Soi 5 (4,500 sq m) on Banthadthong Road, Happy Avenue Don Muang (4,053 sq m) on Songprapa Road, Canapaya (17,094 sq m) on Rama III Road, Landmark Mahachai (5,000 sq m) on Rama II Road, Muang Thong City Park (phase 1, 17,000 sq m) on Chaeng Watthana Road and Hyde Sukhumvit (2,100 sq m) on Sukhumvit Raod.
Mr Surachet said the number of new community malls to be opened this year is lower than the past few years after some community malls were less successful in the past 1-2 years.
The five shopping complexes to open are Iconsiam, a luxury retail project developed by a joint venture between Siam Piwat Co, the operator of Siam Center and Siam Discovery, and Magnolia Quality Development Corp, on Charoen Nakhon Road with 51,500 sq m, Show DC on Rama IX Road, Ikea@CentralWestgate in Nonthaburi's Bang Yai district, Gaysorn II near Ratchaprasong intersection with 6,000 sq m and G Tower with 7,140 sq m on Ratchadaphisek Road.
Meanwhile, one department store to be opened this year is Iconsiam with 36,000 sq m. Pearl Bangkok is a retail plaza on Phahon Yothin Road with 6,311 sq m.
In addition to Bangkok, several retail projects from small to big formats are set to open upcountry this year.
Central Pattana Plc plans to open at least three shopping complexes with one each in Samut Sakhon's Maha Chai district, Nakhon Ratchasima and Phuket.
Meanwhile, Robinson Department Store Plc plans to develop three new branches this year. Two are lifestyle shopping complexes in Phetchaburi and Kamphaeng Phet provinces and the location of the remaining one has not been disclosed.
Wallaya Chirathivat, president of the TSCA, said new investment in shopping malls during 2016-17 has declined to 70 billion baht, down from 100 billion over the past 4-5 years. Retail investment did not increase as much as in the past due to the impact of the economic slowdown both at home and abroad.
Chatrchai Tuongrattanaphan, adviser to the Thai Retailers Association, said retailers will expand their stores at a slower pace as the projects are for long-term investment. He also believes consumer purchasing power will gradually improve this year.
"The health and beauty sector will be the new retail battlefield this year because Thailand is gearing towards an ageing society and when people earn more, demand for health and beauty products also rises," he said.
The local health and beauty business in 2016 is expected to be valued over 280 billion baht. Health and beauty store chains are Boots, Watsons, Tsuruha, Pure and Matsumoto Kiyoshi.
Siam Makro Plc, the operator of Makro cash-and-carry stores under CP Group, will slow the opening of new stores in Thailand and shift focus to nearby countries instead.
Siam Makro recently set up a subsidiary, Makro Ros, to operate its cash-and-carry store operations in Cambodia. The opening of Makro stores in Cambodia will be under a joint venture with a local partner.
For the domestic front, Siam Makro will focus on opening Makro Food Service stores with the aim to cash in on the continuing growth of the hotel, restaurant and catering business.
Meanwhile CP All Plc, the operator of 7-Eleven convenience stores, is expected to open some 700 new stores this year, on par with last year.
Mr Chatrchai expects Thailand's retail market worth 3.4 trillion baht will grow by 3% last year and growth in 2017 will probably be higher.