The supply of shopping centre space in Phnom Penh is set to triple in the next five years, according to a CBRE Cambodia report, and one insider said the jump in higher-end retail venues would come even sooner.
A Parkson Corporation Sdn Bhd shopping centre, one of two large-scale international retail developments in the country, would push that increase in retail supply.
If planned developments come to fruition, there could be as much as 312,000 square metres of retail venues in shopping centres by 2017, up from last month’s count of about 105,000 square metres, the CBRE report said.
Malaysia’s Parkson has started construction on a shopping centre in Phnom Penh, Sung Bonna, president of National Valuers Association of Cambodia, said yesterday, although he declined to give details on the project.
Japanese retail developer Aeon Co Ltd was also in the process of developing what would be one of the country’s largest retail shopping centres on the capital’s Sothearos Boulevard.
A lack of world-class brand management in Cambodian malls is driving the demand for internationally developed shopping projects, Knight Frank country manager Sunny Soo said yesterday.
“At malls here, you have two floors of people selling shoes – sometimes the same shoes. It’s not profitable for the retailer or the mall owners,” he said.
“Until today, the city doesn’t have first class shopping malls ... All the shopping malls here are suffering from bad leasing management.”
Shortfalls in funding have led to developers selling off retail space, which limits the control they have over brand placement, he said.
International developers such as Aeon and Parkson could alleviate layout problems that hinder sales and dissuade name brands from entering the country.
Increased spending power among urban Cambodians has continued to lure brands such as Mango and Axara into the Kingdom, Sovereign Retail Group told the Post in February.
Brand awareness – largely non-existent five years ago – has seen many working-class Cambodians opt for name-brand shirts and shoes rather than the imitations found in some traditional marketplaces, Sovereign’s Ly Souden said at the time.
Per capita gross domestic product was slightly higher than US$900 in 2011, according to the Ministry of Economy and Finance, a 70 per cent jump since 2006.
Citing Economic Institute of Cambodia data, CBRE said that figure could rise to $1,000 next year.
“This is one of the main reasons for more retail here: disposable income,” Soo said.
CBRE’s projected tripling of retail space could happen by 2015 if Aeon and Parkson projects, as well as other shopping centres such as Cambodia Plaza, are completed on time, Sung Bonna said.
Although CBRE reported a 78 per cent occupancy rate at current shopping centres, large-scale, international retail venues would bring with them a surge in name brands.
“People are starting to pick up name brands … but high quality brands don’t want to be in small buildings. They are waiting for the grade-A space,” Sung Bonna said.
The Aeon and Parkson projects would attract high-end brands, and name brands already in the country would most likely move to the new venues, he said.
To contact the reporter on this story: Don Weinland at email@example.com