Singapore-based Ikano Private Limited is trying to get a slice of the tightly held Thai shopping mall market. The country’s property developers own the majority of Bangkok’s famous shopping spots.
Ikano, which operates the stores of Swedish furniture retailer IKEA in Singapore and Malaysia, is opening a mega shopping mall with an attached IKEA store in Bangkok.
Called Megabangna, the mall is Ikano’s first venture into Thailand. Located in the outskirts of Bangkok near Suvarnabhumi Airport, it has a land area of 400,000 sq m.
Ikano, the Asian franchisee of Luxembourg-based holding company Ikano Group, said the entire project costs 14 billion baht ($611.3 million) and is slated to open in early 2012.
Ikano managing director Mr Tom Huzell revealed that Megabangna’s conceptualisation began four years ago.
But as a foreign retailer, it is difficult to break into the Thai retail market, he said.
“The Thai market is concentrated around two developers – the Central Group and the Mall Group. They basically share the market between them,” said Mr Huzell.
The Central Group’s retail arm, Central Pattana, owns Bangkok’s CentralWorld, which has more than one million sq m of office, hotel and retail space.
On the other hand, the Mall Group owns the seven-storey luxury shopping centre Emporium in Bangkok, as well as mixed development Siam Paragon.
Ikano sought a joint venture with leading Thai shopping mall operators Siam Future Development and IKEA furniture suppliers SPS Global Trade to establish Megabangna.
Called SF Development, the joint venture is 49 per cent owned by Siam Future Development. Ikano owns another 49 per cent of the venture, while SPS Global Trade owns the remaining 2 per cent.
And as Asian consumer spending rises on the back of robust economic growth, Ikano embarks on its biggest retail concept yet.
Mr Huzell said the reduction of trade restrictions regionally and with the West present major retail opportunities.
“On one hand, you have growth. On the other, you have import prices that will probably be lower so you can offer a lower price. That is a very good combination,” said Mr Huzell.
Megabangna is more than two months into its construction phase. The mall is on the lookout for its estimated 400 tenants to occupy its 180,000 sq m of net leasable area. Some of its anchor tenants are cinema operator Major Cineplex Group, hardware store HomePro and hypermarket chain Big C.
Shoppers can look forward to a variety of fashion and dining outlets. Bowling alleys, theatres and an ice-skating rink are some of the entertainment features they will find.
The IKEA store adjoining Megabangna will be South-east Asia’s largest. Spanning 40,000 sq m, it will also be the biggest furniture store in Thailand.