BANGKOK, Oct 24 – High-end commercial complexes in Bangkok are in great demand among luxury goods retailers worldwide, according to a report by real estate service company Jones Lang Lasalle.
The property management firm says the Thai people’s higher purchasing power and increasing arrivals of foreign tourists have contributed to a brisk business for luxury goods, consequently more rental demand at shopping complexes.
The arrival of foreign tourists to Thailand has increased 21.4 per cent in the first eight months of this year and their spending volumes were high, says the report.
Average spending per visitor was Bt4,393/day last year, an increase from Bt4,187/day year-on-year, and one-fourth of the spending were on shopping.
Bangkok’s low rental rates compared to Asian countries like Singapore and Hong Kong has attracted foreign retailers of luxury products.
As of mid-this year, rentals at high-end commercial centres in Hong Kong and Singapore were Bt13,391/sq m and Bt10,201/sq m respectively while the rate in Bangkok was only Bt2,274/sq m.
The challenges for Bangkok’s commercial complexes are the market landscape and domestic taxation system.
Among the total 8.9 million square metres of space at shopping centres in Bangkok, 4.6 million square metres are in premium complexes and the vacant space available for lease is less than 6 per cent – a limitation for luxury brand retailers who want to expand their businesses in the Thai capital.
The overall landscape of Bangkok’s shopping centres from now until next year remains positive with more luxury goods retailers opening their outlets here while the existing ones will expand their businesses to cash in on Thai people’s and tourists’ higher purchasing power.
Rentals will be higher but still competitive compared to shopping centres in major Asian cities.
