Ten years ago, when low-rise malls such as Megabangna first opened in Bang Na, they were questions from the public, investors and retail chains about whether it could compete in a location with several other prominent retail chains boasting loyal customers.
As the digital age emerged over the past decade, shopping centres in Thailand were expected to plummet or perish.
While the outlook has changed, Palinee Kongchansiri, president of SF Development Co, the operator of Megabangna Shopping Centre and Megacity, remains ready to face new challenges and believes Thai malls will never lose their appeal.
"We want to build this plot to be a leading retail district where shoppers spend 2-3 days rather than 6-8 hours, with new anchors planned that will keep people engaged," she said.
TILTING AT LUXURY
Digital disruption allows consumers to shop anywhere at anytime, but Ms Palinee believes low-rise malls will remain popular if operators prioritise choosing tenants who share the same passion and direction.
The mall has five main anchors that cater to various customer groups spanning furniture and home decorations, grocery products, fashion, beauty and cinema. New planned anchors meet the specific needs of customers, she said, emphasising Megabangna as a meeting place for people and the community. They include three new international hotel chains for business travellers, a five-star hotel and a family hotel.
The company is also negotiating with US burger chains and other services that provide specific services to customers, including a water theme park, said Ms Palinee.
"We would like our tenant mix to reflect the latest business trends, as we continue to renovate the space to deliver an experience visitors cannot find anywhere else," she said.
"We also want to add several new luxury segments. This includes high-end brands and lifestyle products. For example, we may have a Tesla car centre here."
There are 900 tenants at Megabangna at present, 30% of which are restaurants, 25% sell fashion products, and the remainder are in the categories of sports and entertainment. Many more tenants will be added as the company expands its retail space, said Ms Palinee.
PROPER TENANT MIX
She joined the management of Megabangna via SF Development as a vice-president for leasing in 2014, two years after the complex opened.
"A decade ago, the country had never seen a low-rise mall with a regional scale. As a shopper, I feel this complex has potential to further develop," said Ms Palinee.
"For family reasons, I decided to leave Gaysorn mall, a luxury retail complex downtown."
Her experience with Gaysorn taught her how to choose tenants.
In her first year with Megabangna, Ms Palinee found shoppers preferred to spend their time at restaurants there before moving to Central Bangna.
"We conducted an in-depth study and research, which led us to adjust our mix of 150 tenants to meet the changing customer profiles in this community. New fashion and beauty shops such as Victoria's Secret, Sephora, Eveandboy, and 30-40 restaurants were added," she said.
Megabangna's image appealed to the mass market in the beginning, but it has shifted to a lifestyle complex, with the number of visitors increasing by 20% the first year after the changes and continuing to rise every year since, said Ms Palinee.
Topgolf, a leading sports brand from the US, is scheduled to open its first branch in Southeast Asia at Megabangna in September. The new attraction is expected to lure more tourists to the mall, she said.
SF Development is conducting a feasibility study on expanding its luxury products after its survey found the average spending of people living near Megabangna stood at 150,000 baht per month per household.
The company plans to double the retail space at Megabangna to 400,000 square metres in five years, said Ms Palinee.
MIXED-USE REJIG
SF Development is carrying on with developing its Megacity project, which features residential projects, a hotel and an office building covering 400 rai in the Bang Na area. The project completion date was extended by two years because of the pandemic.
The master plan for Megacity will be revised as demand for office buildings in that location may change because of the pandemic, she said.
The project is being developed in response to economic growth spurred by the government's Eastern Economic Corridor project, which is intended to attract foreign investment to the eastern part of Thailand, particularly the provinces of Rayong, Chon Buri and Chachoengsao.
According to Ms Palinee, once the master plan for Megacity is complete, the complex is expected to draw 250,000 visitors daily, up from 150,000 visitors now.
She said the landscape around Megabangna has changed greatly, while competition is expected to intensify as The Mall Group is constructing a 50-billion-baht massive mall at a nearby Bang Na intersection.
"Competition is healthy. We've tried to differentiate our complex from others in the area, but combined I think we give shoppers in Bang Na lots of options, from retail complexes to duty-free and luxury outlets within a 30-kilometre radius," said Ms Palinee.
"I believe we can become a shopping destination for tourists."
She said Thailand's shopping sentiment has improved and she expects Megabangna's sales and customer traffic to rebound to pre-pandemic levels by the end of this year after the government eased entry restrictions for foreign arrivals and allowed nightlife and child entertainment venues to reopen from May 1.
However, Ms Palinee said the company remains worried about the higher cost of living, driven by a rise in oil prices and electricity bills over the coming months. This could possibly lead to a hiccup in consumer spending in the short term, she said.
Despite the obstacles to sentiment, Megabangna's strategy for its tenant mix will remain unchanged, said Ms Palinee. As consumers have more alternative channels to shop, malls need to focus on emotional activities that shoppers cannot find online, she said.
"Thailand has a mall culture. We believe shopping malls will never die here, as reflected by the increasing number of visitors at each complex and the continued development of complexes from every major retail developer, such as Central Pattana, The Mall and Siam Piwat," Ms Palinee said.
