The New Hype On Community Mall
Community malls or lifestyle malls have become one of the most prominent projects for real estate developers since 2008. Community malls have gained popularity due to lifestyle changes of modern day Thais who demand greater convenience. While Bangkok city is notorious for its high traffic, Community malls have gained popularity because modern day Thais prefer easy living, quicker and easier physical access to dining and shopping, and easy-to-find parking spaces. It is no surprise that these malls have become the first choice as a hangout place.
Today, community malls take up 11% of all retail markets which is almost the same size as that of the hypermarket share. It is expected to overtake hypermarket share in number of outlets by 2014 retail market report half year 2013 (Source: Colliers Research) Due to city zoning restrictions, big retailers find it difficult to open large shopping malls and hypermarkets in the city area. While increase in housing projects, roads and shortcuts in these residential areas have boosted the convenience behind going to these community malls hence, making it not only a feasible choice for consumers but attractive for real estate developers who are confident of their success. An added benefit for real estate developers investing in community malls is that these malls are more cost-effective to maintain than big retail outlets located in urban areas. Therefore, it is no brainer for more and more real estate developers to penetrate and saturate this market.
Key Retail Developers
The biggest and first mover to penetrate this market is Siam Future Development (SF) being in the industry for more than 20 years. The first community mall by SF, Market Place Bangbon was up and running since 1995 to provide essential products and services such as restaurants, supermarkets and banking services. Community mall started to gain popularity since 2005 after the launch of J-Avenue; Japanese lifestyle mall. J- Avenue is favored due to its right concept - it was built at the right place and at the right time. It was built when Japanese residents started occupying the area and Japanese culture and cuisine was extremely well-received among Thais.
J Avenue is the second modern community mall in the area to service affluent residents in Thonglor after the Thonglor Market Place built by SF in 2003. Nevertheless, because it’s the first Japanese concept mall in Bangkok, it attracted people from all over Bangkok and became quite the “It” place in Thonglor.
Following the success of J-Avenue, all community malls built had a clear concept that was localized to target that particular residential area. SF was a monopoly in the community mall industry for a decade before KE land developer built The Crystal Shopping mall .
The Crystal Shopping Mall located in Ekamai-Ramintra is a crowd-pleaser for residents in the area. KE has stirred a dramatic shift in customer expectation for lifestyle mall from being just a convenience for residents to accommodating luxury, design, ambiance and atmosphere so consumers are given multidimensional experience in their residential area.
The Crystal Mall features a California landmark with well designed walking streets making it appealing not only for residents in the area but it attracts people from all over Bangkok as well as tourists.
In close proximity to the location of The Crystal Shopping Mall, SF launched a competing lifestyle mall called La Villa adjacent to Ari BTS Station. The first modern greenery mall, it offers trendy products and services that are fit for a cosmopolitan area. Its key selling points are its convenient location and its distinctive greenery setting making it just as sought-out for as Crystal Shopping Mall.
Both small and big real estate developers have built around 21 community malls between 2007 to 2010. Between 2007 to 2010 alone, SF had already built a total of three community malls which are La Villa in 2007, Major Avenue Ratchayothin in 2009 and Nawamin City Avenue in 2010. All of these malls are popular due to it’s catchment area - a good location and a good residential population mix.
From 2010 to 2012, Community malls industry had attracted both big and small players making the market saturated. Many land developers including TCC land, Property Perferct, Sena Villa Group, and MBK Group have built these lifestyle centers targeting local residents.
Sena Development became a key player in community mall opening five projects by the end of 2013. SENA fest, the first of the five is up and running in a prime location in Thonburi area. It’s success is due to a big enough resident population in the area which includes existing residents and newly erected condominiums located next to the Chaophraya river.
Designs And Concepts
With Crystal Mall as the role model, community malls built in 2012 are raising customer expectations in terms of design and ambiance. For instance - The Park Lane in Ekamai features a roman style architecture, The Promenade on Fashion Island has a European Landmark and Amorini on Ramintra Road features a recreation of Santorini landmark from Greece.
Further, Festival Walk Mall located on Nawamin road has recreated the antique European landmark and Chocolate Ville located in the same area features a popular landmark and design resembles that of a western village. Their concept is to be a one stop destination of international eateries; their concept is very successful that so many people drive for a visit including foreigners.
Now, most players compete on architecture design featuring either either a unique famous landmark or distinctive concept. The only outstanding mall that adopts the retail function as a key competitive advantage is Crystal Design Center, the same owner with The Crystal Shopping Mall. Crystal Design Center features itself as a center of design and home decoration showroom. Keeping La Villa, Festival Walk and Chocolateville in mind, the trend towards community malls adopting a greenery landscape is highly appreciated trend because modern day consumers are looking for a place to relax without having to drive to the country side. To emphasize, it is a hideaway from the hustle and bustle of the city yet located in close proximity to that of the urban area.
Another concept community mall, Rain Hill which was launched in 2012 imitates the freshness of forest hill while at the same time featuring a modern architecture making it apt for it’s location in a cosmopolitan area of Sukhumvit 47. The Nine neighborhood center is launched by MBK Group, located at Pharam 9 road with the fresh greenery landscape. “The Portico- Langsuan”, also launched in 2012 has a green concept but is located in the heart of business district (Chidlom). Most greenery-style malls always include Japanese restaurants because Japanese cuisine is celebrated among Thais. In close proximity to J-Avenue, TCC land opened Japanese lifestyle mall, Gateway Ekamai in 2012 to go with the popular Japanese trend. The motivation for building lifestyle malls for real estate developers is the city zoning restrictions that make it difficult to open large shopping malls in town, hence making lifestyle malls a more feasible outcome even in urban areas.
Community Mall Growth To Continue At Modest Pace
According to research by Colliers International (Thailand), all newly completed facilities of retail expansion in the second quarter of 2013 were community malls. The number of community malls has soared from 30 malls in 2010 to almost 100 malls in 2013.
This shows that community malls market has shifted from the growth stage to the maturity stage. However, most of them are in the suburbs area, due to the expansion of residential projects along the suburbs area such as Rachapruek, Kaset-Nawamin, Ramintra, Praram 2, Praram 3 and Bangna. Particularly, Ratchapruek, the center of western Bangkok has a catchment of over 100 residential high-end projects or 50,000 households with high purchasing power.
With the announcement of the road expansion with over 80,000 cars transported daily and this area is going to be a new economic development of Thonburi area. Now, five popular projects are located in this area; Homepro, Homeworks, The Walk, Pureplace and The Circle. The Circle; claimed to be the biggest community malls features a fusion of Thai heritage and modern European design with over 200 retailers.
Similar to any product in the maturity stage, variety and features are added to make it more interesting and increase sales. The Walk is the first indoor community mall with a recreation of Santa Monica landscape and is a mix format between being a furniture outlet, Index Living Mall and it houses a variety of dining outlets, local shopping outlets and supermarket. Similarly, The Paseo is a mix format of being a car showroom while also featuring a number of restaurants and is located on Onnut road since 2009.
Another much more appreciated feature added to the community malls are pub and bars notably, The Portico Langsuan features ChocoBar while The City Viva features WooBar.
Residential Condominium + Community Mall Concept Is On The Rise
The innovative concept is real estate developers are including Community Malls to their Condominium building projects. Over 10 new condos that included community malls were up and running in 2013. One of the distinctive concept is The Pickadaily Bangkok community mall which has an English old town architecture design located next to A Space Me condo in Sukhumvit 77. Another novel concept is community malls being built on Bangkok University Campus by SF.
The intensity of the competition is fierce as Community malls are imitating the 24 hours availability 7-11 business model. For instance, “W district lifestyle mall” within the high rise condo project on Sukhumvit road has a direct sky walk from the condo to the mall will be open 24 hours again. The Kurve 7 located at Bangkapi also promises 24 hours availability, hence showing that this could be another valuable feature for community mall.
In 2013, SF announced the plan to develop over 10 community malls in suburban area in the next 5 years. They are also cooperating with LPN condo developers to co-project on building condos with community malls.
Customization Strategy Is The Key Success Factor
The key success factor adopted by SF in ensuring the popularity of it’s community malls is customization strategy. There is no common plan for all community malls, one strategy may work in one place, while others may require a different strategy. It is certainly all about localization and studying the residential population in the target area.
The concept, design and tenant mix of the community mall should match the class and lifestyles of the community it is serving. Despite reaching the mature stage, a leading player in the industry confirms there is still room for growth in the community malls market.
The key in such an industry is innovation and mix community malls format that cater to consumers convenience and exceed their expectations by offering a multidimensional experience while at the same time matching the needs of the residents in that catchment area.
The ABAC polls concluded that that consumers have positive attitude towards community malls because of its superior design and it has better location than big retailers. A concept that is certain to steal the market share from big retailers, it has already changed the lifestyle of Thais. Indeed a dramatic shift as it changes shopping experience from being indoor to outdoor. The developers are now targeting more tourists to increase their customer traffic. In the future community malls will not only serve the resident in the community area, but will be a tourist destination welcoming AEC era.
In A Nutshell...
Altogether, community malls are everywhere! Along the lines of the BTS, the city areas, near old residential areas, new residential areas, building around housing projects that are yet to be completed, as a condominium facility, within university campuses and even outskirts of Bangkok! Yet there is still room for more, Why? The key success factor to entering this market is convenience, design, atmosphere and multidimensional experience that match or even better exceed consumer expectations! One food for thought?
A new community mall that is about to open will include a Cinema. Imagine having a cinema and pub or a bar within walking distance to your home.
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