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News Release


Growth in community mall supply slowing

Failure of many malls discouraging new development

One of the fastest growing retail formats in Bangkok over the past decade is the community mall sector. The total amount of lettable space in community malls across Bangkok and vicinity grew by nearly 150% over the past ten years. However, the growth of new supply has seen a marked slowdown in the last few years as failure of several community malls has discouraged new development, according to property consultancy JLL.

Community malls are a small-scale retail format that mainly serves the retail needs of the residential community in the area where they are located. They typically have a supermarket as an anchor tenant with other retailers providing a wide variety of day-to-day goods and services such as restaurants, drug store supplies, sundries, banking facilities and other personal services. There are some community malls that are larger in scale and provide more offers such as entertainment facilities."

According to JLL's Thailand Property Intelligence Centre, the net lettable space of community malls in Bangkok totals 856,000 square metres at present, compared to 345,600 square metres recorded in 2008.  Community mall space now accounts for approximately 14% of the total lettable retail space across Bangkok.

Krid Jarungruk, Head of Retail Consultancy and Leasing at JLL, says: "The success of several pioneering community malls has motivated more players to jump on the ban wagon. This, coupled with the fact that this retail format is relatively easier to build due to its generally smaller development scale, has resulted in the fast growth of supply in this retail segment."

Nonetheless, data from JLL's Thailand Property Intelligence Centre also indicates that the growth in new supply of this retail format has slowed since 2015.

Krid comments that failure of many malls has made many new players more cautious when considering to enter into this retail segment, contributing to the slower growth of new supply.

"As players are not limited to experienced retail operators but also new-to-market individuals or land owners who had no direct experience in retail development and management, many community malls have turned unsuccessful. Some failed to fill up space with retailers, others failed to attract shoppers despite full occupancy by well-known retail brands," he explains.

"While there are many causes of the failure, the most common ones include location away from residential communities, inconvenient access, wrong positioning, poor retail mix and inefficient marketing as well as operators' inability to adapt or identify appropriate solutions when challenges arise," he continues.

Having said that, there remain some new players who are keen to develop a community mall and are looking to adopt a model of some successful malls such as Little Walk Bangna.

Developed and operated by Index Interfurn, Little Walk Bangna features 3,200 sqm of retail space. The development was 90% occupied upon opening in early 2017 and is now fully occupied by a variety of retailers such as Villa Market (anchor tenant), Starbucks, Burger King (its first lane-less drive thru outlet in Thailand), Au Bon Pain, A Ramen and Shoyuu Japanese Restaurant along with professional beauty services such as Kritthada Clinic and Beauty Maker Studio.

Little Walk Bangna is successful in terms of both the leasing and shopper foot traffic. It has received continued leasing enquiries from retailers looking for space to open their retail outlets.

While location in a well-established residential area, convenient access, ample parking spaces and a good mix of retailers were among key ingredients for success, the developer's open mind is no less important.

"At the design stage, the developer responded quickly to feedback from retailers they targeted for Little Walk Bangna. The project layout was revised for several times to meet prospective major tenants' requirements as the developer realized that retailers knew best what would work for their customers," Krid explains.

"As the urbanization of Bangkok continues, there remains room for both existing players and newcomers to develop new community malls. Though there is no magic formula to guaranteeing success of a community mall, understanding what prospective shoppers and retailers need will help minimize risk," he concludes.