The new CPN's shopping centre in Silom as a part of the 46-billion-baht Dusit Central Park development. New retail property supply in 2025-26 is projected to outpace demand

New retail property supply in 2025-26 is projected to outpace demand, pushing occupancy rates below 95% while capping rental growth at 1-2% annually, as competition among major developers intensifies and demand recovery remains sluggish.

Chotika Tungsirisurp, head of consulting and research at property consultancy CBRE Thailand, said roughly 1.09 million square metres of retail space are in the pipeline, either under construction or in planning.

"The retail sector was subdued by declining tourist arrivals and consumer confidence," she said. "The overall outlook remains challenging, with oversupply risks if consumer demand fails to rebound significantly."

Thailand's Consumer Confidence Index continued its downward trend, falling for a fifth straight month to 52.7 in June 2025, the lowest since February 2023.

With a robust pipeline, supply pressures are expected to intensify through late 2025 and into 2026, when an additional 300,000 sq m from large-scale developments is scheduled for completion.

As of the second quarter of 2025, total retail supply in Bangkok reached 8.3 million sq m, up 0.7% year-on-year, but down 0.2% quarter-on-quarter as new completions were offset by closures of several mid-size retail projects downtown and in the suburbs.

The occupancy rate stood at 93.8%, down 1.3 percentage points year-on-year and 0.1 point from the previous quarter. Rents were flat at 2,000–5,500 baht per sq m per month.

According to SCB Economic Intelligence Center (SCB EIC), subdued domestic growth, rising household debt and mounting expenses continued to weigh on purchasing power.

Foreign tourist arrivals, particularly from China, have fallen in 2025, dragging down overall retail traffic.

However, traffic at projects by leading developers across Bangkok and surrounding areas remained resilient, thanks to diversified tenants, frequent renovations and strategic locations.

Demand for retail space is still projected to expand modestly by 1-2% annually in 2025-26, in line with the growth of available leasable space during 2022–24, with large-scale projects leading the way.

However, new supply is forecast to rise faster at 3-4% per year, likely pushing occupancy below the 95% recorded in 2024, though it should remain above 90%, according to SCB EIC.