A rendering of a Simon Property Group outlet mall. Simon plans to develop three outlet malls in Thailand through a joint venture with Siam Piwat.
Simon Property Group, the owner of Gotemba Premium Outlets, has entered a joint venture with Siam Piwat Co, the developer of Siam Paragon shopping mall, to develop a premium outlet mall in Bangkok and one each in Thailand's North and South at a combined cost of at least 10 billion baht.
The entry of the US retail giant, which racks up more than 2.5 trillion baht in annual sales across its platforms, promises to rapidly escalate competition in Thailand's already hotly contested retail market, where Central Group is still the biggest player.
A new company, Siam Piwat Simon Co, was set up with registered capital of 130 million baht after the joint agreement was signed Tuesday. Each party holds an equal stake in the venture.
The scheme will not only expand the nascent premium outlet market in Thailand, but also mark the first time that Siam Piwat will extend into the provinces after three decades in Bangkok retail business.
Chadatip Chutrakul, chief executive of Siam Piwat Group, said the company plans to spend at least 10 billion baht to develop a premium outlet mall in Bangkok and one each in the northern and southern regions over the next 3-5 years.
The first premium outlet mall will occupy a 150-rai plot in eastern Bangkok, visible from one of the city's busiest highways. Construction of the 50,000-square-metre complex will start this August and open in October 2019.
The outlet stores will offer designer apparel, footwear, fashion accessories, leather goods, and specialty brands similar to those found in Simon's existing premium outlet malls worldwide.
"My father brought me to Woodbury's outlet mall in New York 20 years ago and said one day we will implement the luxury outlet model in Thailand to extend our retail and property business," Mrs Chadatip said, adding that the complex will attract residents to Siam Piwat's new town development project.
The idea of developing premium outlet malls was on Siam Piwat's drawing board for the last three years, given the readiness of the Thai market. The country has a population of almost 70 million and a booming tourism business that attracts 35 million visitors a year. Thailand's retail sector has grown continuously over the past few years.
Central Pattana Plc, the operator of Central shopping complexes, recently announced a premium outlet mall in eastern Bangkok that will likely open the same year as Siam Piwat's premium outlet mall.
Rangsit Plaza Co, the operator of Future Park Rangsit, has also shown interest in developing a premium outlet mall on a 100-rai plot.
"Bangkok is one of the world's greatest cities, and its metropolitan population combined with its huge international visitorship make it the ideal first location for our initial premium outlet," Mark Silvestri, Simon's executive vice-president, said during a visit to Thailand Tuesday.
He said the joint venture is Simon's first in Thailand and its fourth in Asia after inking deals in Japan, South Korea and Malaysia.
Simon Property Group is a global player in shopping, dining, entertainment and mixed-used destinations. Its portfolio includes more than 230 properties with a leasable area of 18 million sq m.
The group has 96 premium outlet malls worldwide, including 15 in Asia (nine in Japan, four in Korea and two in Malaysia).