Central Retail's regulated brands in the food sector include Central Food Hall, Tops Market...

Business direction

According to Central Pattana's Thai Stock Exchange records, CPN Global Vietnam Ltd has a registered capital of VND 20 billion ($815,578) and is engaged in real estate management and project execution in Vietnam.

Central Pattana (CPN) is a listed company of the Central Group, which is owned by the Chirathivat family and operates Central Retail, Thailand's largest retail property developer.

Central Pattana currently manages 39 projects, including 37 Central shopping centers (15 in Bangkok and perimeter, 21 in provincial Thailand, and one in Malaysia), one Esplanade shopping center and one Mega Bangna (a joint venture), and 17 community malls, for a net total leasable area of 2.3 million m2. The firm also operates 33 food courts.

Since 2012, Central Group has been investing in Vietnam through its subsidiary, Central Retail. Central Retail's regulated brands in the food sector include Central Food Hall, Tops Market, Tops Daily, Tops Superstore, Tops Online, Family Mart, GO!, Mini go!, and Lan Chi Supermarket.

Central Pattana's five-year business plan (2022-2026) calls for further investment in the development of new projects, both stated and unannounced. These include retail-led mixed-use development, hotel and residential developments, and the value-added refurbishment of existing assets, as well as expenditure management through smart cost reduction to preserve financial liquidity and prepare for unpredictable scenarios.

The company will continue to investigate investment opportunities in other forms of business, acquisitions, and overseas investments in Southeast Asia, such as Malaysia and Vietnam, as well as new types of business with high growth potential, in order to generate new revenue streams and align with the targeted growth achievement for a stable and sustainable future.

What challenge for Central Pattana?

With the Vietnam retail property market being viewed as critical in Southeast Asia, where many peers have operated, Central Pattana in general, and CPN Global Vietnam Ltd in particular, may confront several hurdles.

Many analysts believe that competition in Vietnam's supermarkets and retail complexes is becoming more severe. In recent years, both domestic and foreign merchants have actively participated in a number of shopping mall developments in Vietnam.

AEON is also a Japan's major player in the Vietnamese retail property industry

THACO has inaugurated the 10,500-square-meter Emart supermarket in Gò Vấp District, HCM City. Da Quang Minh Stock Company, another THACO affiliate, has also received approval to build a retail center on 2.4 hectares Vietnamese property in Tay Ho District, Hanoi. This initiative will bring THACO's total number of Emart outlets to ten by 2025.

Vincom Retail, Vietnam's largest shopping center operator, currently has five retail establishments totaling over 10,000 square meters. They also operate seven retail malls in congested locations. Vincom Retail also has outlets in a variety of minor categories.

Furthermore, South Korea's Lotte Group has constructed Lotte Mall West Lake, a 350,000-square-meter commercial center, hotel, and residential complex in Lake West, in the third quarter of 2023. They presently operate 19 other retail centers in Vietnam.

AEON, a Japan's major player in the retail property industry, has also made significant investments in Vietnam. AEON presently runs six large supermarkets around the country, with aspirations to extend to 20 in the next years.

As you can see, in a promising retail real estate market like Vietnam, with many big enterprises from both home and abroad, Central Pattana, despite strong backing from Central Group, may face a fierce rival and several challenges in establishing strategies in Vietnam.

In addition, Central Pattana may face several more challenges in Vietnam. Simon Smith, Head of Research and Consultancy at Savills Asia-Pacific, warned that retailers would have economic issues in the short to medium term, and the danger of e-commerce to asset owners has not subsided. During the epidemic, online purchasing grew more popular across the region. This means that businesses and shopping malls should provide greater experiences to attract and keep customers.

"Inflation is driving up building and labor expenses, so asset owners must hope that retailer confidence continues to rise and supports rental growth," he stated.