What is wrong with Promenada?

[anonymouse]

I do enjoy it but they defiantly need more shops in there.

What they need is more coffee shops.

Yeah after my 16th Cup of coffee at Promenada trying out each of the coffee shops I'm always stumped where to go next

[Sparkles]

I visited this place for the first time this morning and I have to say yes it is a superb environment to stroll around without the crowds. So from the consumer's point of view it's excellent. And today was no different, it seems to all the other occasions when posters here have commented on how quiet it is.

But what I worry about is the poor old developer/investor.

Being a foreign developer I would assume (and I would sincerely hope) that they carried out an in-depth feasibility study before starting this project and I would be very interested to read the findings, particularly who they considered would be their target audience that would actually spend money rather than use the place for entertainment. I can only imagine that any study was carried out prior to the 2008 financial crisis and that even the building was still in progress after the crisis began, so that the developer didn't envisage what was coming and how things would change. And it was probably too late by then to pull the plug. This is all I can think of because otherwise I couldn't understand someone building this in that location, knowing what we know now.

I kept thinking about the unusually large common areas that all have to be air-conditioned as well as the extensive landscaped grounds which all have to be regularly maintained and surely even if the rents are comparatively low, I would imagine the tenants are still made to contribute towards these additional maintenance costs.

There are still large areas that have never been occupied and there are also some areas that have been occupied before but have now been vacated , which makes me feel uneasy.

Everyone should go out and have a look at the place and while I was there I discovered there is now a free shuttle service from the Amora Hotel near Thappae Gate.

Interesting you feel sympathy for the investor/developer, why ? Poor location unless that part of the city suddenly goes through a population explosion. Poorly sign posted. I and many others have

driven around for ages trying to find it.The most basic requirement for any new business is telling people where you are and what you offer. As for the free shuttle service from the Amora Hotel ,a well

kept secret,and once you get there is there is there anything you can't see closer to the city,the answer is no.Its pleasant and architecturally appealing but as a business model a total failure. Unless you can

encourage financially, the Chinese tourist operators to put it on the itinerary it will stagnate. And how many tourists want to go to Rimping, the major tenant

The golden rule of successful business has always been position ,position, position. A few investors are going to do their shirt on this project.

PS...... Did we have a financial crisis in Thailand in 2008 ? I don't think so.

“Interesting you feel sympathy for the investor/developer, why ?”

Only because they are described on one website as being a “ Dutch retail developer that has created many successful shopping centers throughout Central Europe “ so I feel sorry that perhaps some of the assumptions in this instance they made were overly ambitious. But it seems very strange to me that an experienced retail shopping centre developer would do this because you usually learn very quickly what works and doesn't work when big money is involved and in this case they said it cost them 2.9 billion baht.

This is why I mentioned the feasibility study. I wonder who this was prepared by and whether they made some ambitious assumptions?

It's interesting that you refer to the Chinese because that was one of the reasons I wanted to go there to see who exactly is shopping there. I didn't see any Chinese.

When you talk about, position, position, position its a trade-off isn't it? I mean maybe the developer chose this location because the land was cheap (which presumably leads to cheaper rents ) compared to something more centrally located where the land costs wouldn't allow you to even consider this kind of low intensity development.

What I noticed is that I couldn't find any kind of directory board or map giving information as to which retailers were there and where they were located in the centre. When I asked at the information desk if they had any of this kind of information the employee said no because there were more tenants coming? So I do agree with your comments that it could do with perhaps more aggressive marketing and information but the details of the shuttle service are provided on their website

http://www.promenadachiangmai.com/en/news-events/Update%20Shuttle%20Bus%20schedule/30

Well we would need a current tenant, or a prospective one, to advise us if the rents are cheaper than other shopping centres they certainly would need to be with the low volume traffic through the

centre. I would imagine some smaller retailers are on a "rent free holiday" for a period but that's only ok in the short term.You will never see many Chinese there,they would hardly know of its existence unless a tour

operator took them there and how many people refer to a web site for details of free transport to a shopping centre, not many I would suggest.

Presuming it is a Dutch based ,successful, retail developer you would have though they would have utilised some local knowledge and be aware that competition was on its way in the form of

Central and Maya it was pretty common knowledge for quite a while.

Perhaps they could persuade Thai immigration to move their office there ,that would certainly create some floor traffic

No one wants Promenada to fail but without a major tenant they have given themselves a massive task to make it viable.

[weary]

Still quiet, but picking up a bit lately. I think the word has started to slowly spread among Thai introverts, as well as Southern Thai food aficionados - the place opposite Rimping is making a killing. Go Prommy!

[tfc]

Promenada itself is fine, it's just the location that makes it unappealing to myself and others I know as it doesn't have anything (that I can't get closer) that makes the trip out there worthwhile.

[Ulysses G.]

Ragu is what makes it worthwhile to me. IMO, it really is a step above The Duke's and pretty much every other restaurants in town. The food is really good, but the deserts would stand out anywhere on the planet. That is an impressive feat for a Western restaurant in Chiang Mai.

[NancyL]

Talked to David Duke's yesterday and he says things are progressing on the new restaurant at Maya. Oh finally, there's hope for good eats at that mall.

[midas]

I visited this place for the first time this morning and I have to say yes it is a superb environment to stroll around without the crowds. So from the consumer's point of view it's excellent. And today was no different, it seems to all the other occasions when posters here have commented on how quiet it is.

But what I worry about is the poor old developer/investor.

Being a foreign developer I would assume (and I would sincerely hope) that they carried out an in-depth feasibility study before starting this project and I would be very interested to read the findings, particularly who they considered would be their target audience that would actually spend money rather than use the place for entertainment. I can only imagine that any study was carried out prior to the 2008 financial crisis and that even the building was still in progress after the crisis began, so that the developer didn't envisage what was coming and how things would change. And it was probably too late by then to pull the plug. This is all I can think of because otherwise I couldn't understand someone building this in that location, knowing what we know now.

I kept thinking about the unusually large common areas that all have to be air-conditioned as well as the extensive landscaped grounds which all have to be regularly maintained and surely even if the rents are comparatively low, I would imagine the tenants are still made to contribute towards these additional maintenance costs.

There are still large areas that have never been occupied and there are also some areas that have been occupied before but have now been vacated , which makes me feel uneasy.

Everyone should go out and have a look at the place and while I was there I discovered there is now a free shuttle service from the Amora Hotel near Thappae Gate.

Interesting you feel sympathy for the investor/developer, why ? Poor location unless that part of the city suddenly goes through a population explosion. Poorly sign posted. I and many others have

driven around for ages trying to find it.The most basic requirement for any new business is telling people where you are and what you offer. As for the free shuttle service from the Amora Hotel ,a well

kept secret,and once you get there is there is there anything you can't see closer to the city,the answer is no.Its pleasant and architecturally appealing but as a business model a total failure. Unless you can

encourage financially, the Chinese tourist operators to put it on the itinerary it will stagnate. And how many tourists want to go to Rimping, the major tenant

The golden rule of successful business has always been position ,position, position. A few investors are going to do their shirt on this project.

PS...... Did we have a financial crisis in Thailand in 2008 ? I don't think so.

“Interesting you feel sympathy for the investor/developer, why ?”

Only because they are described on one website as being a “ Dutch retail developer that has created many successful shopping centers throughout Central Europe “ so I feel sorry that perhaps some of the assumptions in this instance they made were overly ambitious. But it seems very strange to me that an experienced retail shopping centre developer would do this because you usually learn very quickly what works and doesn't work when big money is involved and in this case they said it cost them 2.9 billion baht.

This is why I mentioned the feasibility study. I wonder who this was prepared by and whether they made some ambitious assumptions?

It's interesting that you refer to the Chinese because that was one of the reasons I wanted to go there to see who exactly is shopping there. I didn't see any Chinese.

When you talk about, position, position, position its a trade-off isn't it? I mean maybe the developer chose this location because the land was cheap (which presumably leads to cheaper rents ) compared to something more centrally located where the land costs wouldn't allow you to even consider this kind of low intensity development.

What I noticed is that I couldn't find any kind of directory board or map giving information as to which retailers were there and where they were located in the centre. When I asked at the information desk if they had any of this kind of information the employee said no because there were more tenants coming? So I do agree with your comments that it could do with perhaps more aggressive marketing and information but the details of the shuttle service are provided on their website

http://www.promenadachiangmai.com/en/news-events/Update%20Shuttle%20Bus%20schedule/30

If you go back in the history of it you will find a thread here where every one was excited about it. They figured it would almost kill the airport mall. It was going to be the greatest thing since sliced bread. The developers did indeed run into some financial problems and there was a delay in opening it. In my opinion it should not have opened when it did. They really were not ready for it. I believe that they were considering the future in their decision to build it out there. Not sure if they figured on Central Festival to be opening and be so big.

One other thing that hurt them was there original plans were calling for a lot of high quality fashion stores. It was supposed to be an upscale mall. I do enjoy it but they defiantly need more shops in there.

“One other thing that hurt them was there original plans were calling for a lot of high quality fashion stores “

What I noticed in both Promenada and Maya is the presence of cheap clothing retailers that occupy space in common areas where all the merchandise is just piled in a heap onto stands with huge signs advertising between 50 to 70% discount.

I don't think this fits in with the image of an upmarket shopping centre and reminds me of MBK Centre in Bangkok.

[tommo10]

Quite a timely and interesting topic.

From someone who has personal experience with "Promenada" or ECC Real Estate (the developer); what is wrong with Promenada is the whole entire concept, development and ultimately, the implementation.

The idea is modeled on an outdated concept devised in Warsaw Poland by ECC in 1996.

They had the arrogance to think that a rehashed version of their first 'success' would work in Chiang Mai almost 20 years later.

ECC used 'mezzanine financing' from funds raised from bond holders (just below the level that requires FSA approval) with the senior debt from an Islamic bank loan.

Their projections were incredibly lofty (~90% occupancy) with no real consideration to the ultimate demographic they were investing in.

Couple the above with the fact that the 'CEO' utilizes his wife as the PR/Marketing Director (a Dutch national with limited to no Thai based experience) and you have the birth of a very expensive cluster .

So how has ECC or Promenada dealt with the issue of low traffic, hefty loan repayments (senior debt); easy, default on numerous service agreement contracts with their suppliers leaving many Thai local businesses/suppliers out of pocket mounting into the 10s of millions of THB.

If you google ECC Real Estate you will also learn that they were a partner to a now defunct development in Vietnam and from insider knowledge they have been in legal proceedings in the past (to which they lost) with a another failed development in the south of Thailand.

Google map their head office too - it's a small house in bum nowhere.

In a nutshell, shonky cowboy developers with a history of defaulting on obligations/contract agreements.

As a 'legal consultant' in Thailand (I'm aware of the WP restrictions) I have advised more than 3 contractors of their rights in regards to unpaid bills from the Promenada.

I'm hoping, and relativity confident, that ECC (Promenada) will learn a valuable lesson from this 'eggs in one basket'/screw the local providers at any cost approach.

See attached Information Prospectus (in Dutch) for more information.

The projections are so absurd it makes you want to cry to baby Jesus.

IM - ECC Promenada.pdf

[JulieM]

Talked to David Duke's yesterday and he says things are progressing on the new restaurant at Maya. Oh finally, there's hope for good eats at that mall.

NancyL, this is wonderful news. Any idea as to timing?

[northernjohn]

Quite a timely and interesting topic.

From someone who has personal experience with "Promenada" or ECC Real Estate (the developer); what is wrong with Promenada is the whole entire concept, development and ultimately, the implementation.

The idea is modeled on an outdated concept devised in Warsaw Poland by ECC in 1996.

They had the arrogance to think that a rehashed version of their first 'success' would work in Chiang Mai almost 20 years later.

ECC used 'mezzanine financing' from funds raised from bond holders (just below the level that requires FSA approval) with the senior debt from an Islamic bank loan.

Their projections were incredibly lofty (~90% occupancy) with no real consideration to the ultimate demographic they were investing in.

Couple the above with the fact that the 'CEO' utilizes his wife as the PR/Marketing Director (a Dutch national with limited to no Thai based experience) and you have the birth of a very expensive cluster .

So how has ECC or Promenada dealt with the issue of low traffic, hefty loan repayments (senior debt); easy, default on numerous service agreement contracts with their suppliers leaving many Thai local businesses/suppliers out of pocket mounting into the 10s of millions of THB.

If you google ECC Real Estate you will also learn that they were a partner to a now defunct development in Vietnam and from insider knowledge they have been in legal proceedings in the past (to which they lost) with a another failed development in the south of Thailand.

Google map their head office too - it's a small house in bum nowhere.

In a nutshell, shonky cowboy developers with a history of defaulting on obligations/contract agreements.

As a 'legal consultant' in Thailand (I'm aware of the WP restrictions) I have advised more than 3 contractors of their rights in regards to unpaid bills from the Promenada.

I'm hoping, and relativity confident, that ECC (Promenada) will learn a valuable lesson from this 'eggs in one basket'/screw the local providers at any cost approach.

See attached Information Prospectus (in Dutch) for more information.

The projections are so absurd it makes you want to cry to baby Jesus.

Don't know all about the financing but I do know they had a big problem with them. As for the concept I will have to agree with you. It talked about all upscale type stores and delivered pretty much the opposite. As for the mall I personally like it. I like the lay out. Not what every one likes but they can always go to the Central Festival for a big box. I have been told there is 20 new stores coming in. How long they will be there well that is any ones guess. I see ones closing in the Airport, Central Festival and KSK is more ghost town than stores. It is just an excepted fact of doing business in Thailand.

[northernjohn]

Talked to David Duke's yesterday and he says things are progressing on the new restaurant at Maya. Oh finally, there's hope for good eats at that mall.

NancyL, this is wonderful news. Any idea as to timing?

Not good news. Every time he opens a new outlet the service gets worse at the river.

[JulieM]

Talked to David Duke's yesterday and he says things are progressing on the new restaurant at Maya. Oh finally, there's hope for good eats at that mall.

NancyL, this is wonderful news. Any idea as to timing?

Not good news. Every time he opens a new outlet the service gets worse at the river.

Yeah, but I live two minutes walking distance from Maya so it's good news for me : )

Edited November 19, 2014 by JulieM

[Saan]

Anyone who says Vegemite at any price is not worth having automatically identifies themself as non-Australian or un-Australian. Also can never be a happy little Vegemite.

Too bad we can't get Ozemite in Thailand as Vegemite is now owned by the Yanks and is Halal approved. Talk about un-Australian.

[Bill97]

So how has ECC or Promenada dealt with the issue of low traffic, hefty loan repayments (senior debt); easy, default on numerous service agreement contracts with their suppliers leaving many Thai local businesses/suppliers out of pocket mounting into the 10s of millions of THB.

In a nutshell, shonky cowboy developers with a history of defaulting on obligations/contract agreements.

Have to wonder why anyone would want to do business or support a company like that. Ignorance or greed?

[Saan]

In Nakon Si Thammerat I saw a family of Thais afraid to use the esculator.They were viewing it with great suspicion.

I remember when KSK opened in Chiang Mai and the Thais were afraid to get on. They would stand at the end and suddenly leap on a stair and go up. It was really annoying to use them as sometimes you had to stand in line. That was 20 years ago though. I don't think many Thais are that backwards in 2014.

I saw exactly the same thing happen a few weeks ago at the Maya Mall. Old Thai lady was afraid to get on the escalator despite the pleadings of two younger family members.

I can remember an old bloke from the bush in Australia talking about his first visit to the big smoke and his wonderment about the moving ladders (escalators) they had in the big shops.

[Robert24]

not an expert but my sense is that people here don't like such type of resort/half outdoor type malls. Asians like indoor malls, with strong aircon, luxury shops, luxury style similar style to Maya, Central or other malls like Siam Paragon and others that you see in Bangkok, Hong Kong or China.

Also CPN is an excellent company with great track record, I put my money any time into this company. Same with Ichitan Group, most projects they run are very successful and no doubt Maya mall will be a success. Not sure about this Dutch investor of the Promenada mall, what research they have done and what other presence/track record they have in Asia. Maybe if Chiang Mai grows a lot more, this mall may turn to profitability at some point.

[LarryBird]

I spent half an afternoon at Promenada a few weeks ago waiting on a friend delayed because of an accident.

I found it relaxing, civilised, elegant and an absolute pleasure.

All staff, including the parking attendants were friendly, air con temperature just right, no loud music or inane announcements, and every other criteria you would want: whether shopping, banking, browsing eating, drinking, or watching a movie. Rimping here must be one of the most refined and eye-pleasing supermarkets in Asia.

If some people love the noise, crowds and the stress of places like Central Festival, so be it. Give me Promenada any time - just a pity that for people without a car, it is out on a limb.

That brings us to the lamentable, incomprehensible lack of public transport in an ever-expanding city already choked with traffic ........ ah well.

Hot chicks too?

[Ulysses G.]

They are a lot hotter at Central Festival and a lot more numerous too.

[midas]

Quite a timely and interesting topic.

From someone who has personal experience with "Promenada" or ECC Real Estate (the developer); what is wrong with Promenada is the whole entire concept, development and ultimately, the implementation.

The idea is modeled on an outdated concept devised in Warsaw Poland by ECC in 1996.

They had the arrogance to think that a rehashed version of their first 'success' would work in Chiang Mai almost 20 years later.

ECC used 'mezzanine financing' from funds raised from bond holders (just below the level that requires FSA approval) with the senior debt from an Islamic bank loan.

Their projections were incredibly lofty (~90% occupancy) with no real consideration to the ultimate demographic they were investing in.

Couple the above with the fact that the 'CEO' utilizes his wife as the PR/Marketing Director (a Dutch national with limited to no Thai based experience) and you have the birth of a very expensive cluster .

So how has ECC or Promenada dealt with the issue of low traffic, hefty loan repayments (senior debt); easy, default on numerous service agreement contracts with their suppliers leaving many Thai local businesses/suppliers out of pocket mounting into the 10s of millions of THB.

If you google ECC Real Estate you will also learn that they were a partner to a now defunct development in Vietnam and from insider knowledge they have been in legal proceedings in the past (to which they lost) with a another failed development in the south of Thailand.

Google map their head office too - it's a small house in bum nowhere.

In a nutshell, shonky cowboy developers with a history of defaulting on obligations/contract agreements.

As a 'legal consultant' in Thailand (I'm aware of the WP restrictions) I have advised more than 3 contractors of their rights in regards to unpaid bills from the Promenada.

I'm hoping, and relativity confident, that ECC (Promenada) will learn a valuable lesson from this 'eggs in one basket'/screw the local providers at any cost approach.

See attached Information Prospectus (in Dutch) for more information.

The projections are so absurd it makes you want to cry to baby Jesus.

It looks like you have answered my earlier question

from what you say it appears the investors carried out very little, if any due diligence either with regards to the development participants or indeed even the concept of the shopping centre itself. If that is the case I would have very little sympathy for them.

I am just very surprised because I never believed it was still so easy to raise finance like this. Looks like some people have learnt nothing from the global financial crisis.

Considering all the years it has taken them to plan and build that shopping centre and all the hassle that would have been involved they could have taken that money and simply bought prime West End of London real estate and sat back to enjoy far more spectacular capital gains, than they will ever see in this instance.

Edited November 20, 2014 by midas

[mania]

Ragu is what makes it worthwhile to me. IMO, it really is a step above The Duke's and pretty much every other restaurants in town. The food is really good, but the deserts would stand out anywhere on the planet. That is an impressive feat for a Western restaurant in Chiang Mai.

true about those deserts...scary good...I try to not look when I walk past

[MESmith]

Am I the only one who found the walk from the car park to Rimping, around the store (big), and then back to the car to be a very long way?

Looks like it.

[kaptainrob]

Am I the only one who found the walk from the car park to Rimping, around the store (big), and then back to the car to be a very long way?

Looks like it.

From the western carpark Rimping is a very short ride up an escalator. They even have green arrows to follow [back] from parcel pickup.

Nice store as far as Rimpings go but I have to wonder if the oyster bar and Jap [Nippon Kai] can survive.

Promenada may survive ... Dave will take over and turn it into Thai Old Geezer retirement apartments 555

[MESmith]

I enjoy to actually do some walking when I'm out shopping. I usually park as far away as possible, to avoid having my doors dented. I also walk up the moving walkways in Big C etc. Good fun weaving around the stationary locals, with my kids & Thai wife following close behind.

[Mapguy]

Just to pause a moment, what is the obvious TV Chiang Mai obsession with shopping malls ?

[LawrenceChee]

Just to pause a moment, what is the obvious TV Chiang Mai obsession with shopping malls ?

Guess there ain't much else for some living here ...throwing another challenge out there for those with time to spare ...count the number of items available in 7-11

[kaptainrob]

Just to pause a moment, what is the obvious TV Chiang Mai obsession with shopping malls ?

Eye candy, exercise and food ... what else does a man need?

[northernjohn]

Just to pause a moment, what is the obvious TV Chiang Mai obsession with shopping malls ?

Try to find a movie theater with out one. Let us know how that works out.

[searcher22]

Just to pause a moment, what is the obvious TV Chiang Mai obsession with shopping malls ?

Love them or hate them, Chiang Mai's shopping malls are sanctuaries of comfort, safety and civility. At a price.