Percentage of retail investment in the Kingdom may likely increase near the end of 2017
A new report from US real estate corporation CBRE puts Cambodia at close to the bottom of desirable destinations for foreign retail investment in Southeast Asia.
The results are based on the seventh edition of the company’s ‘How Active are Retailers Globally?’ report, which showed that 26 per cent of retailers worldwide who were surveyed identified Southeast Asian countries as target markets for 2016.
However, Cambodia was identified as a potential target market by only 2 per cent of those retailers surveyed. This was higher than Laos, which was of interest to only 1 per cent of retailers.
Every other country in the region recorded a considerably higher number.
Leading the field was Singapore, which was of interest to 21 per cent of retail companies. This was followed by Malaysia at 10 per cent, and Indonesia at 9 per cent.
Thailand, Vietnam and the Philippines tied at 8 per cent each.
Of the retailers surveyed, 48 per cent who expressed an interest were from Europe, and 33 percent were from the United States.
Meanwhile, 23 per cent of retail companies surveyed were involved in mid-range fashion; the same amount that fell under the description as ‘luxury and business’. 18 per cent were described as ‘specialist clothing’ and 10 per cent as ‘health and beauty.’
CBRE stated that “cautious sentiments prevail”, with a majority of surveyed retailers targeting to open fewer than 10 stores in any chosen Southeast Asian country.
CBRE Cambodia Manager, Chris Hobden, said that the figures were not as discouraging as they might initially seem.
“While Cambodia is yet to attract the level of interest enjoyed by more developed South East Asian markets, with 2 per cent having noted Cambodia as a target market for this year, the arrival of new high-quality shopping malls, combined with growing domestic disposable income, will continue to act as key drivers for retailer entrants over the course of 2016,’’ he said.
“The fact that 26 per cent of global retailers surveyed identified South East Asia as a target market for 2016 expansion is highly encouraging, with European mid to high-end fashion retailers showing particular interest.”
CBRE’s last survey on Phnom Penh’s retail environment, in late 2015, noted that there was likely to be an increase in available store space of 112 per cent by the end of 2017, with the opening of Parkson’s Phnom Penh City Centre and Lion Centre shopping malls, as well as Hongkong Land’s Exchange Square. They will be joining Aeon Mall, which will soon. celebrate two years of operations, and is still maintaining a commitment rate of 100 per cent. Additionally, Aeon Mall has announced plans to develop a second mall near Tuol Kork.
“The ability of Aeon Mall to maintain a high retailer commitment rate, in addition to the strong performance of prime high-street locations, indicates that market fundamentals are well placed to absorb retail supply due to come on stream in the near future.”