'Tiny luxury malls' are a strategic move to cover up the "pork barbecue theory" trap and shut down high-end purchasing power in Phuket and Pattaya.

Unveiling the blueprint for the luxury retail model 'POP Phuket – Tops Wongamat,' targeting new territories in prime locations across the country. Highlighting the billion-baht success story of 'Porto de Phuket,' balancing design and financial figures amidst global economic turmoil. An exclusive interview with 'Pong Sakuntanak,' discussing how he's more than just a custodian of a treasure trove, but a pioneer of innovative formats, passing on the legacy to two retail giants.

May 16, 2569 – In an era where the Thai retail landscape is dominated by mega-projects worth tens and hundreds of billions of baht, another aspect of the business equation is the movement of 730 million baht under a sharp strategy, signaling a highly interesting shift in the Thai real estate and retail industries. This is especially significant as this move occurs in 2569, a year when the global economy faces widespread volatility and uncertainty.

If we were to compare it to a battlefield, large retail chains under publicly traded companies might act like the royal army, storming in to seize public space. However, there is an entity called… "Central Land and Development" Instead, they are acting like a special forces unit, scanning for gaps in the market on prime land locations to transform those properties into cash-generating machines with the highest possible return on investment.

An in-depth conversation between Mr. Pong Sakuntanak, Managing Director, Central Land and Development, Central Group. with bank finance It reflects the in-depth background and vision of real estate development in dimensions that go beyond simply constructing buildings and collecting rent, but encompasses the science and art of calculating costs, opportunities, and human behavior.

Lessons from small-scale retail and a warning about the 'Thai BBQ Theory'.

When examining the blueprint of the current shopping mall market, one finds that the competition is as fierce as any other battlefield. Mr. Pong began by frankly illustrating the infrastructure of community malls and small shopping malls in Thailand.

"Currently, small shopping malls are quite diverse and popular in Thailand because the barrier to entry is low. You can build one with just 10-20 rai of land, or even 2-3 rai in the city. However, creating differentiation or variety, especially for luxury small shopping malls, is difficult. Finding unique features in a small space and attracting luxury customers is very challenging."

One economic fact is that most small shopping malls scattered around cities tend to choose routes that focus on mass traffic, as this carries lower risk in the initial stages. This concept is explained from a management perspective as follows:

"A common success story is attracting customers to buffet-style or mass-market shopping malls because of the low investment costs and lower rent, while still offering options. However, this comes with competition; the market can become saturated if too many places open, as customers have many choices."

The appeal of this analysis lies in its strategic warning directly to the Thai retail industry, which often falls into the quagmire of business model imitation, leading to price undercutting and ultimately destroying the industry. Mr. Pong explains this phenomenon using a vivid analogy.

"Therefore, developing small shopping malls targeting the mass market is difficult because there are many competitors, similar to convenience stores. Because with smaller spaces, everyone can develop them. Thailand has..." The Moo Kratha Theory "Sometimes we develop in the same direction and use price to compete, until ultimately we all go bankrupt because nobody makes a profit."

the word 'The Thai BBQ Theory' This becomes a perfect reflection of the lack of creativity among capital groups or land developers. When they see someone else succeeding in a particular area, they all rush to copy it, resulting in an oversupply and inevitably leading to price wars—a path that Central Land & Houses chooses not to take.

On the other hand, looking at mid-sized shopping malls, while there are still market opportunities, a major limitation is that not everyone has the management skills. "While mid-sized shopping malls still have opportunities, there are few developers with the potential to attract stores to complete the community. Without marketing and careful selection of stores to avoid overlap,"

The differences between 'Central Land & Houses' and its short-term crisis shield.

A key question on investors' minds is: how does Central Land and Development's role differ from its larger conglomerates like CPN (Central Pattana) and CRC (Central Retail), both of which are already publicly listed companies? Mr. Pong clarified this point, providing a clear picture of the Central Group's internal structure.

“CentralLand Development actually manages private properties owned by Central Group, including buildings and land. We have many plots of land that we want to develop but don't match CRC or CPN, which are publicly traded companies. Therefore, our role is to develop malls and related operations that are quite unique. We focus on developing small malls and small businesses that complement various properties, including warehouses, factories, small hotels, and golf courses.”

From this explanation, it can be seen that the company acts as a selector, extracting hidden value from assets overlooked by large public companies. This allows them to create projects that are highly flexible, agile, and deeply tailored to specific needs. Examples of the diverse portfolio under their management include:

“Regarding malls, there are general shopping malls, smaller malls, and specialty malls such as the Jewelry Trade Center which sells only jewelry and gemstones, or the former Central Wang Burapha which has been transformed into China World, selling only textiles. In Chiang Mai, we also have the Jinjai Market, a project that supports the community both in Chiang Mai and other regions.”

 "We own land and properties, whether owned by Central Group itself or its subsidiaries. Of course, in the future, we plan to develop the potential of this land, whether for commercial or social purposes, simultaneously."

When asked about the current geopolitical and economic tensions in the world, Mr. Pong shared some interesting insights and perspectives on risk management.

"Those with limited financial resources may need to halt or be more selective in their investments. We are also considering which projects should be delayed or replaced, but these two projects have proven to have minimal impact and high potential for return on investment."

A deeper analysis of the numbers and behavior of tourists at this time reveals a significant shift in the flow of money. Mr. Pong disclosed this insightful information to the Financial and Banking Journal.

"The tourism sector most affected is the Middle East, where travel is difficult. Conversely, because we haven't experienced a war, a considerable number of Thai tourists have come to Thailand instead. Therefore, while the overall picture might show a slight decrease, it doesn't diminish Thailand's potential. We view this current crisis as more of a short-term one. In the long term, neither of the two projects should be significantly affected."

The 'POP Phuket' model taps into the high-end real estate market in Chalong.

When the name "Pearl of the Andaman," Phuket, is mentioned, investors picture a world-class tourist destination with a year-round flow of cash. From Central Land's perspective, Phuket is a destination that cannot be overlooked. "Phuket is a jewel of the sea and a pearl of Thai tourism, with over 14.1 million tourists per year and generating economic value from tourism of approximately 540,000 – 550,000 million baht annually. Even during periods of unrest or conflict in the Middle East, Phuket is virtually unaffected."

"No matter what happens, Phuket Island is usually the least affected, so there's still potential for development, whether it's shopping malls or hotels."

However, venturing into areas with soaring land costs requires a clear and sharp customer screening strategy, and the concept of upgrading projects to the high-end market is emphasized.

“We are targeting high-end residences, or a segment with higher-than-average financial capacity. Currently, land prices in Phuket are quite high. Therefore, to maximize value, we must develop malls in high-end residential areas or high-end properties.”

This is the origin of the project. “POP Phuket” With an investment value exceeding 300 million baht and a total project area of ​​5,490 square meters, the project was developed under the concept of a Playful Destination to support the rapid growth of "Choeng Thale Subdistrict, Thalang District," which has now become a prime location with continuous development of over 20,000 luxury residential units and a high growth rate of 18.8% per year.

Mr. Pong explained the value and direction of the project, stating, "Cheang Talay is a high-potential area and well-suited to CentralLand Development's market, which doesn't focus on typical shopping malls. We want to create something unique, different, and fun to attract new customers. We expect to attract more than 1 million visitors per year, with approximately 80% being foreigners and 20% Thais."

The foundation of confidence in establishing this beachfront project partly stems from the successful formula previously used with previous projects in the same location. "Porto de Phuket" This serves as a prime example of balancing international-standard architecture and financial performance. Mr. Pong recalled his memories of developing that project, saying...

“At Porto de Phuket, when we were developing it, there were many neighborhood malls. But developing one with a unique design that blends seamlessly with nature and balances financial efficiency is very difficult. Building a beautiful or high-quality mall is easy, but making it beautiful, easy to navigate, convenient, and profitable is not. Sometimes, after factoring in rental costs or land expenses, it fails, especially for smaller shopping malls. But Porto de Phuket is the only luxury open mall in Thailand that has succeeded in both opportunities and financial viability.”

The science of luxury mall design and the reality of traffic figures.

The approach behind creating a mall like Porto de Phuket, which generates over 1,000 billion baht in annual sales, differs completely from that of typical local developers. The key to their decision not to compete in the mass market has been deciphered as follows:

"Typical open malls tend to have low investment costs, resulting in few high-quality shops. Most are mass-market stores to match the investment. But Porto de Phuket has annual sales exceeding 1,000 billion baht. Therefore, we see potential in this area and want to develop other projects in this direction so we don't have to compete with anyone for customers. However, achieving success isn't easy."

When delving deeper into the details of "traffic" figures, or the number of visitors, Central Land & Houses is trying to point out that economic viability is not measured solely by crowd density, but also by per capita purchasing power and its suitability to the size of the space.

“At Porto de Phuket, current traffic during high season is around 6,000-7,000 people, while during low season it's around 4,000 people. However, since the two new projects are smaller, with an area of ​​4,000-5,000 square meters, we anticipate traffic to be around 3,000 people. This figure should allow the projects to be successful in terms of both numbers and the number of shops.” However, Mr. Pong also made an important technical observation and note. This figure represents Tops traffic, not the mall's, because Open Mall cannot accurately track its traffic.

'Tops Wongamat': A partnership equation in the prime Pattaya area.

From the Andaman Sea, crossing over to the Gulf of Thailand, lies Pattaya, Chonburi province, the economic hub of the Eastern region. Economic data clearly indicates that it is a key engine of Thailand's service sector. "Chonburi province is also a major tourist destination, attracting approximately 19-22 million tourists annually and generating an economic value from tourism of around 220,000 billion baht per year."

The second project in this roadmap is... “Tops Wongamat” With an investment value of over 430 million baht, the project is based on the concept of a Premium Neighborhood Lifestyle Mall and occupies a total area of ​​4,711 square meters in the Wong Amat Beach area.

The interesting thing about this big Pattaya project is that it didn't come about solely from Central Land's investment budget, but rather through a model of leveraging assets within the Central Group. "This project is a collaboration with Centara, which is publicly traded, so there were plans to present this project as well. However, the Central Land Development team has expertise in shopping mall development, which led to the creation of this project. This allowed them to develop the existing land into Tops Wongamat."

The project's location is strategic, surrounded by a densely populated upscale population. "Tops Wongamat is in a prime location in Pattaya, with both hotels and condominiums nearby. There are many new projects happening around, but there's still plenty of room for further development. With such a large population, we were able to integrate this project to suit our customers."

Another economic catalyst that has made Pattaya a lucrative market is the seamless transportation network connecting Bangkok and the Eastern Economic Corridor. Pong analyzes the direction of this infrastructure as follows:

"Currently, traveling to Pattaya is very convenient, whether you're from Bangkok or other areas, you can use the motorway. Hopefully, a train will be added in the future. Some foreigners coming to Thailand come directly to Pattaya from Suvarnabhumi and U-Tapao airports via the Eastern Seaboard, so customers in this area include both Thais and foreign tourists."

The synergy of two tourist cities and the vision of the creators of a new 'Format'.

Considering the overall picture, the simultaneous decision to establish locations in both Phuket and Pattaya is no business coincidence, but rather a strategic approach to diversify risk and seize opportunities in locations that generate significant revenue for the country. Mr. Pong has provided a detailed comparative overview of both projects as follows:

“Phuket and Pattaya are undeniably the pearls that generate more than half of Thailand's tourism revenue. This is why we want to develop projects in these two cities. Each location is different, but they all share the concept of small shopping malls that focus on lifestyle, dining, and shopping, including food and various services. We chose premium locations in both Phuket and Pattaya. Cherng Talay is more luxurious than other parts of Phuket, while Wong Amat is an established area with a high level of luxury development.”

The culmination of Central Land and Development's journey in a new decade may not be solely measured by the number of square meters of leased space or the increase in the number of branches. Rather, it lies in its asset management philosophy, which aims to break away from the conventional mindset of what it means to be a "land owner."

When asked about the direction and future goals of the organization, Mr. Pong Sakuntanak concluded with a very interesting statement:

"We are not guardians of a treasure trove. We must develop our assets to maximize financial benefits, including finding new formats and innovations for the group, which CPN or CRC sometimes use for further development."

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