Bangkok prime retail market to see slower rental growth amid cautious recovery

Prime retail gross rents rose 0.9% in Q4, the slowest pace since 2023.

Bangkok’s prime retail market showed resilience in 2025 despite economic headwinds and lingering supply pressures following the post-pandemic development cycle, according to a report by global real estate consultancy JLL.

JLL said the market navigated challenges including a build-up of new supply in recent years, softer tourism sentiment and broader economic uncertainty. Even so, leasing activity remained steady as both domestic and international retailers continued expanding in prime shopping centres.

According to JLL, demand in 2025 was supported by a mix of tenants, with food and beverage operators and fashion brands continuing to drive take-up. International retailers also played a role in sustaining leasing momentum, with Chinese brands among those actively entering or expanding within Bangkok’s prime retail sector.

Prime retail stock remained unchanged at about 3.87 million sq m in the final quarter of 2025, as no new projects were completed. JLL said this allowed landlords to gradually absorb vacant space created by malls that opened or underwent refurbishment since late 2024. Developers also maintained occupancy through proactive leasing strategies, targeting both new-to-market international retailers and emerging domestic brands, while marketing campaigns and seasonal events helped sustain shopper footfall.

Rental growth, however, has begun to slow as the post-pandemic recovery phase tapers off. JLL reported that prime retail rents rose 0.9% quarter-on-quarter to THB2,670 per sq m per month in the fourth quarter, marking the slowest pace of growth since early 2023. Landlords have increasingly prioritised maintaining occupancy over aggressive rent increases amid softer retail sentiment among both local consumers and tourists.

At the same time, investment yields continued to compress slightly, with JLL noting that prime retail yields edged down by 5 basis points to 8.7% during the quarter.

Looking ahead, JLL expects a more measured market environment in the near term. With no major new mega malls scheduled for completion, the consultancy said the prime retail sector should continue to absorb existing supply, although rental growth is likely to remain modest as landlords focus on tenant retention.

However, JLL cautioned that decentralised retail submarkets could face rising competition from upcoming large-scale developments and the continued expansion of suburban community centres in 2026, while broader economic weakness may continue to weigh on domestic consumer spending.