Why have so many retail spaces or property projects in Thailand adopted the mixed-use concept?

The competitive environment is changing and new-retail is on the rise, meaning that in many cases the traditional retail formats and stores are undergoing and about to change even more in the future. All of this is forcing developers to rethink assumptions about the industry, and the necessity of incorporating nontraditional elements such as housing, entertainment, and healthcare into retail spaces is one way to stay relevant for the consumers of tomorrow.

What is in it for the customer: Culture and lifestyle play significant roles in shaping a commercial development. As a result of urban density and the size of housing, we see more friends and families eating meals in a restaurant than at home. And because of the climate and in some cases poor air quality, indoor sporting facilities, kids entertainment and kids’ education venues, are very popular. Urbanisation also leads to an emergence of new communities and consumer groups looking for products and services that are not only original but able to answer their needs more effectively. Time is simply becoming more and more limited, so people simply want to shop and socialize close to the places where they work, go to school and live.

What is in it for the developer: There is a potential higher return on the investments when considering mixed-use projects; if the opportunity is optimized and the developer can be effective in responding to more needs than their single-use counterparts. A mixed use concept can also be less risky, have a greater variety of revenue sources, and can help average out the land costs by integrating a mix of components with different types of returns.

What is the trend and growth of mixed-use projects in Thailand and Southeast Asia? What are the supportive factors and opportunities?

The growth in mixed-use projects will raise competition within the property market as they can better meet the needs of consumers. Large-scale mixed-use projects that are currently close to completion will increase retail commercial and office space by 550 thousand square meters and 660 thousand square meters by 2025, as well as increase the supply of high end hotels and condominiums.

What are the key ingredients for a successful mixed-use development project, the live-work-play environment concept?

A more productive use of space, mixed-use developments bring about land use synergies. Combining multiple uses within a single development allow developers to share common resources within the overall development, lowering development costs and maximising the use of land

Prominent design and synergistic integrated components are part of success factors of large-scale mixed-use projects as this will differentiate the project and enable it to become a new landmark for the market area, city, country or even the entire region.

Developers in Thailand will likely seek business partnerships to develop large, more complex, and more valuable mixed-use projects. As the modern urban population demand greater convenience in their daily lives. Amid a limited supply of good potential property, large-scale mixed-use project developments will become increasingly popular.

Population projections: Mass Transportation to help generate traffic in the projects. Where American site selection strategies are often based on adjacency to highways or other main roads, in Asia proximity to foot traffic and transportation hubs are the leading drivers of where shopping centers and mixed use developments are built.

In your view, what are the challenges facing mixed-use project developers both in Thailand and the region?

As for all projects, there are challenges for the mixed-use concept, such as financial management, finding large and suitable development sites, and striking the right balance between residential, commercial, and other types of components.

In addition, each component within the development must complement the other and work well together, both short term and long term. Retailers benefit from a steady flow of foot traffic drawn from residential occupiers, hotel guests and office tenants. Residents gain from the convenience of having retail, leisure and Food & Beverage right on the door step. For office tenants, the diverse mix of offerings within mixed-use developments undoubtedly raises the appeal of office space to their staff. The presence of hotels and residential units within the same development provides an added benefit for office workers and visiting guests. All these also reflect mixed-use development’s ability to serve increasingly demanding consumers in an urban lifestyle.

What are their strategies set to overcome such challenges?

Significant efforts needs to be put into the market research and understanding of the targeted consumers, clients and customer demographics. The ability to analyse the current market situation, and also predict the behaviour and needs of people in the future, is crucial for a successful project.

Simple yet innovative design and solutions to stimulate maximum flow between functions.

Effective project management is also extremely important to secure the anticipated returns and ensure the different components live up to the expectations in the investment requests and feed off each other to create synergies and desired benefits.

Please give an update on the Megacity mixed-use project.

We continue to invest into this destination but also actively looking for investment partners and developers that share our ambition and also see the opportunities presented here. We have land available for both freehold and leasehold and also open for discussions about joint projects.

The Megacity first extension phase ‘Mega FoodWalk extension’, 10,000 sqm, and a 7-storey-carpark building, opened in December 2017. With this extension, we have strengthened our total food offer by providing more than 160 restaurants to our customers.

The first “Marvel Experience” in Southeast Asia, offering customers an interactive entertainment park, opens in May 2018.

The international preparatory school “Didyasarin” affiliated with American School of Bangkok, opening their doors in August 2018

A new 10,000 sqm extension, focusing on kids’ education and fun activities will open in 2019, aiming to further strengthen Megabangna’s focus on a family friendly offer.

A large green space called “Mega Park” where our customers can spend their quality time with families and friends for recreation and leisure in a green environment will open in 2018.

In addition, the centre has improved road infrastructure and extended its surrounding Ring Road, with its aim to cater for the increasing car traffic demand of its future development projects.

May I have the details of your plan to develop mixed-use projects in Thailand?

Our focus is on transferring Megabangna into Megacity, this is our biggest task in terms of our projects in Thailand at the moment. We are open to more projects but we have no new announcements to be made at this point. We are also busy building large IKEA stores, shopping centres and meeting places in Malaysia, Philippines and investigating other potential new markets in Southeast Asia.

What is the plan for more IKEA stores in Thailand, including the latest one at Central Westgate?

We see great potential in Thailand to provide home furnishing solutions that help people live a better life at home. The IKEA Bangna store opened 7 years ago and we just celebrated the grand opening of our second store in March, IKEA Bangyai, connected to the Central Westgate shopping centre in a western suburb of Bangkok. There is still a lot of people in Thailand that does not have easy access to purchase IKEA products and we are looking to continue to expand to provide more people with the opportunity to purchase well designed furniture from Sweden at an attractive price.

Construction will begin in April and the plant will come online in early 2019.

Jan Vleugels, chief operating officer international of Alliance Laundry Systems, said that before deciding to set up in Thailand the company did research on eight countries in Asia. The company was won over by the country’s “strong infrastructure, excellent geography, skilled workforce as well as an extensive supplier base”, due to the government’s initiative to develop the Eastern Economic Corridor.

“Choosing Thailand was a strategic decision, as sales to Asia Pacific have been the fastest growing in the world,” Vleugels said. “We see tremendous growth opportunities in many verticals in this region, such as hospitality, healthcare and institutions.

“This decision to add manufacturing capabilities in Thailand further strengthens Alliance’s commitment to our customers and distribution partners in Asia. Once online, the facility will dramatically shorten lead times for customers in this market.”

The company, based in Wisconsin in the United States, has a portfolio of five brands – Speed Queen, UniMac, Huebsch, Primus and IPSO – as well as a sustainable solution for cleaning delicate fabrics such as silk, wool, leather called SoftWash.

The new Thailand manufacturing plant “will focus on building Alliance’s advanced-technology clothes washing machines and tumble dryers”, Vleugels said. This will be the company’s fourth manufacturing location, after those in the US, the Czech Republic and China.

“In the first phase the plant is expected to produce up to 32,000 units per year. The plant, which will begin construction in April will be completed in January 2019. Once completed, the plant will be the main supplier for all countries in APAC,” Vleugels said.

“Then from January to April 2019 will be the training and trial production period,” he said, adding that the firm is in the recruiting process and plans to take on 350 employees from Thailand in the initial stages.

Vleugels said that the plant would then start its official production in April 2019 for washing machines; it is expected to take four months to reach its full capacity for that line. After that the plant will begin another line of production for tumble dryers, which is expected to take four months as well in order to reach its full capacity. Thus, it would take an estimated eight months from April 2019 for the first phase of the plant to reach its full capacity.

“Asia Pacific is the fastest-growing market for our products. Hence the increase in the hospitality, healthcare and other related industrial sector will translate to a direct growth in the need for quality commercial laundry machines and dryers,” Vleugels said. “Also, we expect to see a growth in the number of laundromats as there is a tremendous growth potential in Thailand and APAC for this type of business.

“In the next three years if everything goes according to plan, we plan to invest a similar amount (around Bt1.5 billion) on the second phase of the manufacturing plant.”

The centre, in Bangpoo, has also been designated as the “first centre of excellence for meat in Asia”, the company said.

Its opening is part of a larger series of upgrades to Kerry’s Bangpoo facility that is designed to increase Kerry’s local innovation pipeline as well as its research and application capabilities. Started in 2002, the facility employs about 200 people.

The facility, covering more than 8,500 square metres and equipped with the latest technologies, will be used by Kerry to work with local customers on all stages of their product development – from ideation to application and manufacturing – for a range of categories including meat, snacks, bakery, dairy and beverages.

The dedicated meat centre, including what the company calls best-in-class taste and functional technologies, will allow Kerry to co-develop signature meat profiles based on different protein types and help its customers to keep pace with the technically challenging and fast-changing meat markets in the Asia Pacific, Middle East and Africa (APMEA) region. With in-house application, sensory and culinary meat experts, the centre is well positioned to develop commercially viable and innovative products at unrivalled speed to the market, the company said.

John Savage, president and chief executive of Kerry APMEA, said that Kerry started as a private dairy company in southwest Ireland before becoming a dairy co-operative in 1974. The company is now regarded as a global leader in taste and nutrition solutions for the food and beverage industry, with customers around the world. The company posted 6.4 billion euros (Bt246.4 billion) in global sales last year and employs about 24,000 people.

“Thailand is an interesting market both for the local market and the very strong export market, including to Europe, Japan and other parts of the world,” he said. “The country has a strong food service market place, which will grow to Bt1 trillion by 2020, and a modern retail network with more than 13,000 convenience stores throughout the country.”

Savage said that another upgrade to Kerry’s regional development and application centre provides new facilities for food and beverage brands to develop authentic, savoury tastes and flavours. Drawing on Kerry’s expertise and market-leading position in cooking methods such as smoke and grill, the fully equipped application lab includes the latest Clean Smoke technology, for food and beverage brands to experiment with using smoke condensate to add a signature taste and smoke profile to meat, vegetables, dessert and even beverages, he said.

The additional down packing and blending lines not only double the centre’s production capacity but also provide food service customers with greater flexibility and efficiency in how their food products are packed.

“The latest centre of excellence for the region is what we believe will lead to an acceleration of innovation and speed to market for our customers. [Yesterday], it is a significant milestone for our Thai business as we take another step in our continued growth in APMEA regions (Asia Pacific, the Middle East, and Africa),” said Savage.

He added that the APMEA region is considered by Kerry as comprising its strategic markets, due to the strong population growth.

“The world’s population is projected to increase by 2.4 billion between 2015 and 2050 according to the United Nations, and 90 per cent of the growth will be from the APMEA region,” he said.

“With the regional development and application centre, Kerry will be able to bring our manufacturing expertise and world-class manufacturing for the future. The company will allocate strong investment for research and development into the centre.

“Thailand is a priority market and an important regional hub for many of our customers in South East Asia and beyond, so we’re delighted to be launching these new, world-class multi-application facilities in Bangpoo.”

He added that the centre will serve local and international food and beverage manufacturers in Thailand, whose products have been exported to many markets around the world.

Savage said that the market dynamics are changing very quickly. Today, consumers are looking for more variety of products, improved nutrition and are excited by new food experiences.

“Consumer food and beverage tastes are changing rapidly due to the region’s growing urban middle class and this is creating huge opportunities for the food and beverage sector,” he said. “We’re excited to combine our 15 years of heritage in Thailand with the very latest technologies and innovation to help our customers stay ahead of the curve and grow their market share now and into the future.”

Home to application labs, interactive customer suites and industry-leading research and sensory facilities, the centre also includes customer engagement kitchens and beverage bars where Kerry’s in-house chefs, mixologists and baristas will develop new menu concepts alongside customers. Food scientists and technologists will also work alongside dedicated teams of sensory scientists to develop products that surpass consumers’ expectation when launched, Savage said.

As one of the largest food manufacturers in the world, he said Kerry is also committed to achieving the highest standards of sustainable best practice. As part of this commitment, the centre employs automated pouch-filling technology to reduce energy consumption and improve operational efficiency.

Savage said that Kerry operates in 18 different markets in APMEA. The company achieved US$1 billion sales in the region last year and has 4,000 employees across the region.

“About 15 per cent of our global sales is currently contributed by the APMEA region. We also expect a double-digit growth every year from the APMEA region over the next five years.” he said.

Takorn added that the NBTC would propose the results of the one-time hearing on the auction rules for both spectra to the agency’s board for consideration on April 11, and would ask the board to consider whether to proceed with auctioning the spectra.

If things go as planned, the licences might be granted to the bid winners even before the expiration of the 1800MHz and 900MHz concession of Total Access Communication (DTAC).

DTAC’s concession expires in mid-September.

The NBTC consulted the Council of State a few months ago on whether it had the authority to auction the two spectra, given that it was now operating in an acting capacity.

Last month, its board resolved to put the brakes on the NBTC’s move to auction 1800MHz and 900MHz licences, pending the Council of State’s reply on the issue.

The watchdog had been expected to open the bidding for the two spectra this coming May.

The six-year term of the existing commissioners ended on October 7 last year, but the new NBTC law allows them to continue in the same capacity until they are replaced.

As part of this strategy, the brand owner has launched Equal Gold as a highlight product for the first half of 2018.

Equal is poised to extend its market leadership in Thailand for the eighth consecutive year, with a target to increase its market share to 55 per cent this year.

Mario Pascale, Merisant vice president & managing director for APAC, said: “Sweeteners and sugar substitutes have emerged as a healthier alternative to sugar for this group of consumers, resulting in continuing growth of the market in Thailand and across Southeast Asia. In Thailand, sales in the modern trade channel alone totaled Bt108 million in 2017.”

Made from sucralose, Equal Gold is a zero-calorie sweetener with a great-tasting sweetness just like sugar, he said.

It is being launched in an innovative zip-lock bag, which makes Equal the only brand in the market to offer a zero-calorie sweetener in such a bag as a lifestyle choice for consumers.

“The Thai market for sweeteners was valued at Bt108 million baht in 2017 [modern trade channel only], for a year-on-year increase of 2 per cent. With its growth projection of 4 per cent to Bt112 million in 2018, Equal is eyeing a 4-percentage-point greater share of the market in 2018 by increasing its share from 51 per cent to 55 per cent,” Pascale said.

“Based on this target, we hope to extend Equal’s lead as the No-1 brand of sweeteners in Thailand for the eighth year running, in line with its vision to be consumers’ favourite brand of sweetener,” he added.

The aircraft will go into service with Thai Lion Air, where its added capacity will help the airline launch several international routes, Boeing announced.

“The 737 MAX 9 is a perfect fit for our growing business in Thailand,” said Captain Darsito Hendro Seputro, CEO and chairman of Thai Lion Air.

“The 737 has been the backbone of our business since we began and we will use the added capacity the airplane provides to expand our network and start additional routes to Bangladesh, China and India,” he added.

Indonesia-based Lion Air Group is the launch customer for the MAX 9.

It was also the first operator to put the MAX 8 into service, and has announced a commitment for 50 MAX 10s.

The group also has an additional 200 737 MAXs on order and is one of the world’s largest operators of the 737.

“The Lion Air Group is the perfect example of how the 737 MAX family provides a common fleet solution across the single-aisle spectrum,” said Boeing Commercial Airplanes president and CEO Kevin McAllister.

“Not only will Lion Air Group benefit from the MAX’s range and capacity, they will enjoy the best economics and reliability in the industry,” he added.

The 737 MAX is the fastest-selling airplane in Boeing history, accumulating more than 4,300 orders from 95 customers worldwide.

Chief executive Christian Ask and country manager Natalia Folbrycht were at his side.

The Sweden-based gym chain allows members to design their own workout routines and access the facility 24 hours a day, seven days a week.

With their membership card they can access all Fitness24Seven gyms worldwide.

There is a variety of gym equipment, group training classes and a Women Gym area, all for Bt1,299 per month.

Krungsri Auto, which operates under Bank of Ayudhya, will also offer customers applying for a loan a variety of promotions and chances to select gifts collectively worth Bt2 million.

“Krungsri Auto has been consistently providing auto finance services at automotive events nationwide,” said Pairote Cheunkrut, head of Krungsri Auto Group. “At the Bangkok International Motor Show, we aim to enhance our services through the Krungsri Auto official Line account. Customers who add Krungsri Auto as a friend and fill in their personal information in Line Chat can receive free event tickets at the Krungsri Auto booth as well as on-the-spot consultancy services from our staff.

“In addition, we are offering a wide range of special deals for customers looking for new cars, big bikes, and motorcycles.”

The “Krungsri New Car” loan involves a minimum down payment starting at 5 per cent, a maximum of 84 months instalment payments and special interest rates.

Customers will have the chance to select a reward, such as a smartphone, electrical appliance, hi-tech sports equipment or car accessory.

Customers of “Krungsri Motorcycle” and “Krungsri Big Bike” can arrange zero down payment, special interest rates and maximum of 60 months instalment payments. Customers of “Krungsri Big Bike” also get a backpack worth Bt790.

More than 700 people work at the office and production centre where Nivea and Eucerin are manufactured for the Thai market and for export to 43 other countries.

“This reflects Beiersdorf’s commitment to doubling production performance in order to support demand in the region,” said Markus Daburger of Beiersdorf Thailand.

“We appreciate the ongoing support of the government and local agencies in our expansion project, which not only sees the production line expand, but also our Beiersdorf family, as up to 200 new jobs will be created in the coming years. We are proud to say that the operation in Thailand is now the company’s second-biggest hub after Germany.”

Both signed a memorandum of understanding yesterday on mu Space’s plan to open the lab in the park, said True Digital Park president Thanasorn Jaidee.

The lab is expected to be opened in October, when True Digital Park will soft launch the first phase of the digital park project.

mu Space’s chief executive officer and founder James Yenbamroong said that mu Space will operate the lab at True Digital Park to develop space technology. It will also attract the talent in the field to help it carry out the research development.

“We are doing this to support the implementation of the Thailand 4.0 economic policy to make the country a hub for technology and innovation in Southeast Asia,” James said. “We believe that the innovation we develop will help to improve the quality of life and help create more sustainable cities in the future.”

He added that at present most of the global investment in the space and satellite technologies came from private companies, unlike in the old days when the state sector led the way. James said that last year private investment in space technology in the US was about US$5 billion, in Europe about US$3.9 billion, and Southeast Asia about US$128 million.

mu Space, which is 100 per cent Thai-owned, was founded in 2017. It plans to launch its own satellite in 2020. The company holds a licence from the National Broadcasting and Telecommunications Commission to operate a satellite service.

True Digital Park provides four fully integrated areas, comprising space for co-working, enterprises, innovation, and events and business services. It is under construction in Sukhumvit 101.

The digital park covers 77,000 square metres, making it the largest of its kind in Southeast Asia. The first-phase construction is expected to be completed in late 2018, featuring around 40,000 square metres.

Thanasorn said the park aims to build a complete ecosystem for startups that enables open innovation and collaboration between multinational companies, startups, small and medium-sized enterprises, investors, universities, and the public sector. This, he said, makes True Digital Park a knowledge-sharing centre that drives digital innovation and enables the sustainable growth of the startup ecosystem in Thailand.