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Thailand’s retail and property markets adapt and move online

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Thailand’s retail and property markets adapt and move online | Thaiger

Tourism, property, retail – 3 sectors of the Thai economy that have taken a huge hit from the impact of lockdowns and border closures. Whilst most of the lockdown provisions are now lifted, the borders remain mostly closed and the economy ‘sluggish’ at best.

The first half of 2020 has been one of the most challenging periods that Thailand retail industry has faced, probably ever. CBRE, an international property consultant, reveals that the degree of uncertainty in the second half of 2020 remains high. Retailers and developers alike must be adaptive and boost their e-commerce penetration to survive.

Thailand’s Covid-19 measures were put in place to contain the virus, but retail, the property market, along with tourism, has taken a significant hit.

“What we have been seeing in the past three months are brand-new challenges that took everyone by surprise. For around two years, we have been saying that those who cannot adapt quickly enough to the shifting retail landscape will not survive, but this is on another level. Retailers have to change their business operations not only to match the drastic drop in footfall but to accommodate a new way of shopping” – Ms. Jariya Thumtrongkitkul, Head of Advisory & Transaction Services, Retail, CBRE Thailand.

The retail sales index in May 2020 has dropped by 34% year-on-year, mostly from the decline in sales of cars and fuel. The Consumer Confidence Index dropped to the lowest point since 1998 at 47.2 in April but has managed to stumble back to just over 50 in July. While Thailand’s same-store-sales growth for Q2 has not been released, it is expected to indicate negative figures from both food and non-food retailers, as this period represents the time when most of Thailand was in some degree of lockdown and retail closure.

After the easing of business restrictions started in June 2020, CBRE notes that many landlords continued to restore their businesses by stimulating customers’ purchasing power via a variety of sales and marketing strategies, grand sales events and setting up frequent mall activities to help both permanent and temporary tenants. A few provided more flexible rental terms to retain existing tenants.

CBRE also witnessed that retailers who used to rent a bigger retail space turned to online platforms and are now refocusing their businesses online after the crisis, resulting in resizing or cancelling their current rental spaces in many retail centres. The move ‘online’ was simply accelerated by the impacts of the pandemic.

According to the Asia Pacific Retail Flash Survey conducted in May 2020, the majority of F&B and other experiential retailers will be focusing on opening fewer stores or focusing on smaller footprints for the second half of the year.

“Once the situation returns to normal, resizing existing rental space will become a more and more important approach that tenants take to be more cost-effective, especially for small and medium ones. Shopping mall operators thus need to revise their trade and tenant mix allocation more granularly and carefully.”

Thailand’s Covid-19 experience has accelerated the changes of traditional retail businesses and accelerated the growth of online retail business at the same time. CBRE notes that developers could reconsider the development concept of new malls to better suit the changes in shopping behaviour and better adapt to any unexpected events in the future. Convenience, hygiene, flexibility and online will be emphasised more for future retail developments.

CBRE believes e-commerce penetration will not be an option but a must for both brick and click businesses to survive. However, the Thai retail sector will be slow to fully recover unless tourist arrival figures reach a similar level to the pre-crisis period as many large-scale shopping malls, especially in downtown Bangkok, are fuelled by foreign tourists.

For property, sales have seen a sharp decline in demand from customers and agents report a risk-averse market. The price of new opening units from many developer companies has dropped significantly in line with the lack of customer demand at this time.

• Ananda Development, a leading company in the property market, is offering special prices on projects near BTS and MRT lines. The price reduction campaigns include a free transfer of ownership and five years of free common expenses.

• Lumpini Development is another leading company offering special prices. Their campaign includes a special discount of up to 50 per cent on existing projects.

• Supattra Kaewkwang, a property agent in the Bangkok area, says that she has been facing hardship since mid-February as both Thai and foreign customers are afraid of the travel restrictions throughout the country. The ongoing border ban and widespread economic recession, in Thailand and overseas, has caused a decline in her sales of up to 50%, compared to 2019.

But Brennan Campbell, CEO for FazWaz, notes that there is also considerable pent-up demand and searches on their website are still strong, along with reliable enquiries still coming through their office.

“In the early stages of the Covid disruption, we saw strong enquiries from, particularly, the Chinese and Hong Kong buyers. In recent months, despite the lack of tourist traffic, we’ve also started to see more European and SE Asian customers start to look at Thailand as a safe and reasonably priced market to invest in as the world starts to re-open.”

Thailand's retail and property markets adapt and move online | News by Thaiger Thailand's retail and property markets adapt and move online | News by Thaiger

SOURCE: CBRE

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1 Comment

1 Comment

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    Preesy Chepuce

    Tuesday, August 25, 2020 at 1:52 pm

    The property market is forever trying to talk itself up and defy gravity. House price growth has been waiting to crash for years. There is no “pent-up demand”, there is a giant bubble & unsustainable personal and corporate debt.

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Coronavirus (Covid-19)

Covid UPDATE: Wednesday’s new infections rise to 1,335 people, 36 people in “serious condition”

Tim Newton

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Covid UPDATE: Wednesday’s new infections rise to 1,335 people, 36 people in “serious condition” | Thaiger

Thailand’s CCSA has announced 1,335 new infections today, after a slight dip in the 10 day surge yesterday. 1,326 of those new infections are local, not imported, and mostly from Bangkok. Today’s tally takes the national total to 35,910 since January 2020 when the first case outside China was detected in Thailand on January 13.

The new infections have mostly emerged in Bangkok with 351 cases. Surrounding provinces report an additional 115 infections today. In other provinces, 877 people.

It’s also been reported today that 36 people are currently in a serious condition and 9 people are on ventilators. Here’s the number of cases reported each day since the start of April…

April 1 – 26 infections

April 2 – 58 infections

April 3 – 84 infections

April 4 – 96 infections

April 5 – 194 infections

April 6 – 250 infections

April 7 – 334 infections

April 8 – 405 infections

April 9 – 559 infections

April 10 – 789 infections

April 11 – 967 infections

April 12 – 985 infections

April 13 – 965 infections

April 14 – 1,335 infections

Meanwhile, Prachuap Khiri Khan officials have ordered the closure of “high risk venues” such as pubs, bars, water parks, children’s playgrounds, gyms, cinemas, game shops. The Governor says restaurants can open “but no alcohol can be served”. This includes the seaside town of Hua Hin.

In Krabi there is now a total of 11 infections, 6 new ones yesterday.

In Chon Buri, which includes Pattaya, there were 99 new confirmed infections of Covid today … a similar number to the past few days.

Total number of infections being treated in provinces…

• Bangkok: 1,689
• Chiang Mai: 880
• Chonburi: 594
• Samut Prakan: 416
• Narathiwat: 304
• Prachuap Khiri Khan: 265
• Samut Sakhon: 166
• Pathum Thani: 124
• Sa Kaeo 105
Covid UPDATE: Wednesday's new infections rise to 1,335 people, 36 people in 

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Coronavirus (Covid-19)

Bangkok police tracking down owners of Thong Lor clubs where virus resurfaced

Maya Taylor

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Bangkok police tracking down owners of Thong Lor clubs where virus resurfaced | Thaiger
PHOTO: Facebook / Krystal Club

Police in Bangkok are on the hunt for the owners of 2 nightclubs considered ground zero for a third wave of Covid-19 currently spreading around the country. The Krystal Club and Emerald Thonglor 13, in the capital’s fashionable Thonglor district, are currently closed, with the managers of both sentenced to 2 months’ imprisonment. However, officials are now attempting to track down the real owners of both establishments.

Nation Thailand reports that the authorities are examining ownership and shareholding documentation related to the 2 venues, after police chief Piya Tawichai confirmed a cluster of Covid-19 infections is believed to have spread from the clubs. The managers of both venues have been charged with violating the emergency decree and disease prevention regulations, with the Bangkok Municipal Court sentencing them to 2 months’ imprisonment on April 9.

The head of Metropolitan Police Division 5, Sophon Saraphat, has also transferred 2 Thonglor police officers, including the superintendent of Thonglor police station, while an investigation into the Covid-19 cluster continues.

Sophon says authorities are also examining the operating licences of both clubs, which have been closed for 30 days, while officials determine if they should be shut down for a period of 5 years.

3 nightlife venues in Phuket, thought to be behind a resurgence of Covid-19 in the southern province have been closed as part of a wider temporary shutdown of nightlife on the island. It is not yet known if the owners will face prosecution.

The Illuzion and Shelter nightclubs in Patong, along with the Café del Mar beach club in Kamala each held mass parties during the weekend of April 2- 4, with invited guests travelling from as far as Bangkok. Media reports put attendance at each party at over 3,000.

SOURCE: Nation Thailand

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Coronavirus (Covid-19)

UPDATE: Field hospitals being established in Covid hot zones around Thailand

Tim Newton

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UPDATE: Field hospitals being established in Covid hot zones around Thailand | Thaiger

UPDATE: The field hospital in Bangkok’s Bang Bon district, west of the Chao Phraya river, had its first 10 Covid patients today. The director of the medical services office of the Bangkok Metropolitan Administration says that the 10 patients into the makeshift hospital, located at the Chalerm Phra Kiat Stadium, will enable assessment of the performance by the medical team, before more patients arrive – Thai PBS World

ORIGINAL STORY: Despite the confident posture and Songkran going ahead, amid restrictions, there is a lot of background activity which suggest the authorities are getting ready for a surge of new infections at the end of the Songkran break, officially this Thursday (but in reality, next Sunday at the end of the weekend when most people who travelled home will return for a resumption of work).

The Thai lunar new year celebrations – Songkran – are the largest mass movement of Thais each year, a source for a huge leap in road deaths and accidents. And, this year, a potential super-spreader event.

Quietly, at least 3,000 extra beds have been prepared in 10 field hospitals around Bangkok. The government has also confirmed that additional field hospitals are being set up in other potential ‘hot zones’, including Phuket, Chiang Mai, Chonburi and Hua Hin. Some of them were set up last year, and since closed, and now being prepared for new positive infections.

One Thai person who had been in one of the field hospitals put together a check-list of things to take IF you end up as an invited ‘guest’ HERE.

The CCSA say they are looking for additional beds in hotels and previous state quarantine facilities (where repatriating Thais were housed for their free quarantine) to be used if needed.

This year’s Songkran had bad timing, coming just a week after a number of major clusters were identified around some of Bangkok’s popular nightlife areas in 3 key inner city districts. Even before Songkran these isolated clusters had already spread into the provinces. In the weekend before Songkran the government had already listed 37 provinces which had instigated some form of paperwork or restrictions for people who had been in any of the 3 Bangkok districts.

The government also leapt on the source of the new outbreaks – bars, clubs and entertainment venues – and promptly shut them down for at least 2 weeks. At this stage it looks likely that that ban will be extended beyond the 2 weeks and, depending on the extent of new infections following the Songkran holiday, additional restrictions will also be added.

Even today the Civil Aviation Authority published a number of new in-flight restrictions for passengers – another blow to the hard-hit domestic aviation sector.

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