Will Bangkok become Asia's new shopping mecca?

Feb. 10, 2014 - PRLog -- If you have been reading the press over the last couple of months and are in any way interested in Thailand's political stalemate and have taken an interest its inherent economic problems, you could be forgiven for thinking that the idea of Bangkok becoming Southeast Asia's new shopping mecca is arrant nonsense.

However, Thailand has a history of climbing its way out of these internecine power struggles intact and, for the most part, people living in Bangkok have not experienced much stress unless they live or work right next to the rally stages.

With the Eurozone economies dogged by inflation and long-term unemployment, although slowly improving their economic fundamentals remain fragile. The consequences of this economic drag has been that purchasing power and international luxury and high street brands are receding and giving way to the more expansive, dynamic and growth-generating capacities of the Asian markets.

Asia fared reasonably well during the financial crisis and emerged as a stabilising force, mainly because of the dependability of its banking systems. The region has seen large capital inflows and growth over the last few years and is way ahead of the global average. It is expected that the Southeast Asian economic outlook will enjoy robust growth until at least 2017, according to the OECD.

Even with the Thai government in a state of limbo due to the on-going protests, with shrill calls for the prime minister to stand down after the general election at the beginning of the month, caretaker PM Yingluck Shinawatra is ploughing on regardless. What it means is that Bangkok is for the time being gridlocked in certain areas, but the country simply cannot leave this situation unresolved for very much longer.

Last year it was reported in the Thai press that Thailand was "on its way to becoming a shopping mecca like Hong Kong and Singapore", as the then cabinet of the governing Pheu Thai Party was expected to cut import duties on designer goods. It had in place a policy for the country to be a "shopping paradise" for luxury imports and taxes were to be reduced to help it become more competitive, which could draw in thousands of visitors from the Asian region and beyond.

Bangkok has 4.6 million square metres of prime grade retail space, with monthly rents averaging US$73 per square metre, a sum far lower than US$323 in equivalent areas of Singapore and US$429 in Hong Kong. While international arrivals were reaching new heights towards the end 2013, challenges to the authority of the government started to arise with the street protests and visitor numbers are way down in one of the busiest seasons of the year.

As of writing, with the protests escalating in an attempt to oust the government and postpone the vote ahead of the second round of elections due at the end of the month, Thailand is not best placed at the moment for the resurrection of the proposed tax reductions, which would have covered imported luxury goods such as cosmetics, perfumes and watches. But, as mentioned previously, this highly polarised political situation cannot go on forever.

Looking ahead, it can be expected that more international brands will enter the Thai market and be sold in malls that have far lower rents than their counterparts in Hong Kong and Singapore, with Siam Paragon, MBK, Gaysorn Plaza and Siam Discovery all set to do very well. In addition to this, developers are constructing many more of these megamalls in readiness for the onset of the AEC in late 2015.

This also bodes well for the luxury condo developments in the areas that surround these grand malls. For example, living space in modern condominium developments such as the Condo One Siam, which is only five minutes walk away from National Stadium BTS, can be rented for as little as Bt15,000 per month for a 30sqm unit. On the other side of the city, near to the Emporium at Phrom Phong, where rents are higher for more exclusive luxury condos, you can rent a one bedroom 52sqm unit for around Bt45,000 per month.

Rent Bangkok Apartments are looking forard to the day the political logjam clears and new legislation regarding the shopping malls is passed. For condominiums near to the locations of these malls at Siam Square, the National Stadium and Phrom Phong BTS stations, you can browse or search through our listings on our real estate website at http://www.rentbangkokapartments.com. If you are interested in knowing more about the stock we have in hand, please do not hesitate to contact us.