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Guide to Retail Lease Terms

September 14, 2020
There are two types of leases for retail premises in Thailand: a rental lease with a term of normally three years and a “Saeng” long lease, with a term of 15-30 years.
Image | CBRE

Guide to Retail Lease Terms and Conditions (Shopping Centres)

There are two types of leases for retail premises in Thailand:

  • A rental lease with a term of normally three years.
  • A “Saeng” long lease, with a term of 15-30 years.
There are also other retail structures such as consignments.

Retail Rental Rates and Costs (Rental / Lease)

1. Rent Quotation and Payment
Retail rents are quoted in Thai Baht on a square metre basis per month, and are normally paid one month in advance. Rents can be quoted as gross (including service charge) but larger retail landlords will charge rental separately from the service charges.

2. Security/ Holding Deposit
Six months’ gross rental is normally paid as a security deposit. The security deposit is refundable on expiry of the lease, excluding any interest earned during the lease term.

3. Service Charges, Repairs and Insurance
Retailers renting shop space pay for the utilities, communications and third party insurance. The service charge is normally included in the rent but, at large retail centers, service charges are charged separately.

Guide to Retail Lease Terms

4. Operating Expenses
  • Insurance premiums
  • Electricity
  • Telephone
  • Water
  • Gas
  • Household tax
5. Incentives
A rent-free fitting out period of one month is normally allowed, depending on the size of the retail space and the rental paid.

6. Lease Contracts
A standard legal binding lease document provided by the landlord is normally signed.

7. Rent Escalation
Retail rent escalation rates exist only for the monthly payment method, which is normally raised every three years. The landlord and tenant should discuss the rate of rent escalation prior to the signing of a contract.

8. Typical Lease Length
Retail leases are generated for a long-term period generally of approximately 10 years or longer.

9. Subletting or Assignment Rights
Retail tenancy agreements generally do not allow tenants any right to sublet or assign the lease without prior consent from the landlord.

10. Lease Termination
Tenancy agreements generally do not provide retail tenants or landlords with any right to terminate the lease during the term of the lease.
To inquire about this property guide, please contact:
Image | CBRE
Jariya Thumtrongkitkul
Retail & Group Transaction Management Head of Retail and Group Transaction Management
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