Consumer retail demand underpins rise in shopping malls

Source: Phnom Penh Post

AEON Mall, which opened in 2014, is expanding in the Kingdom with AEON Mall 2 set to open in 2018. Photo supplied

Cambodia’s retail scene is making big leaps and bounds as many new mall entrants ready to open their doors in 2018, despite a study by Bonna Realty Group showing more than 30 retail precincts are already operating across Phnom Penh.

A recently completed study by Bonna Realty Group which surveyed the capitals retail market for the first half of 2017 found that the city has 31 shopping precincts of varying scale and grade.

Segmented into A, B and C grades – with grade A encompassing larger malls like AEON and the upcoming Parkson Mall – the study found that grade A shopping malls share a total size of about 80,000 square metres while grade B malls in the city comprise about 24,000 square metres.

The same study also found that the average rental fee per square metre had increased slightly, with grade A space costing $35 to $40 per square metre. Grade B rentals averaged $25 to $30 per square metre while grade C cost $12 to $25.

Pen Sokea, Bonna Realty’s director of evaluation, told Post Property that a number of big malls would be emerging in 2018, including Aeon Mall 2 and Parkson Mall.

“The demand for more shopping malls is being triggered by the arrival of famous brands, however, the buying capacity in the shopping malls themselves hasn’t changed much,” he said, adding, “More shopping malls also poses concerns as supply seems to be large when compared to the buying capacity of the locals.”

Thida Ann, director of CBRE Cambodia, said that while there were many new shopping outlets emerging in Phnom Penh, there was concurrently a rise in food and beverage precincts.

“Entertainment, food and beverage outlets are still leading the trend in Phnom Penh,” she said.

Bonna Realty Group’s study also highlighted the large foreign interest that Cambodia’s retail sector is attracting, with Royal Group recently signing a memorandum of understanding with South Korea’s largest retailer, E-Mart Inc, to build a massive retail outlet that combines a supermarket with a department store in the Kingdom.

While new retail developments are emerging, old shopping centres are undergoing makeovers to keep up with the newer and more modern shops. Kap Rithy, general manager of Sorya Shopping Center, said the complex had just finished its $5 million renovation and was planning to re-launch the centre at the end of this year.

According to Rithy, the renovation has resulted in more international brands coming in, which he hoped would translate to higher foot traffic at Sorya.

“Sorya focuses more on attracting the locals, though the huge shopping malls coming next year will be equipped with international standards which is a drawcard for locals. But in my opinion, I think the huge malls coming to Cambodia is a good thing as it will help drive economic growth,” he said.

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