More than 4,000 people attended a ceremony in December last year that saw Japan’s largest shopping mall developer and operator, Aeon, breaking ground on its three-storey mall in Phnom Penh, and the company says it is already considering building more in the capital.
The mega-mall, which will cover more than 68,000 square metres, will be located on Sothearos Boulevard next to the Sofitel Hotel and the Russian Embassy.
Two months later, the foundations have been laid, and construction is underway.
Aeon Mall Cambodia managing director Makoto Yajima said the mall is expected to be finished in May 2014 if everything goes to plan.
The company is confident in opening a mall in Phnom Penh because the economy is growing, the politics are stable, and the mall will cater to the needs of the younger generation, he said.
In December last year Aeon Japan president Motoya Okada said the mall will cost $205 million, although Yajima would not confirm whether this figure was still applicable.
The mall’s location, in the southern part of Phnom Penh was chosen for its close proximity to other up-and-coming developments such as Diamond Island, Yajima said.
Aeon Mall will be different from the market-style shopping Cambodians are used to, because there will be internationally recognised brands, and a focus on customer service, he added.
“We want the customer to realise that they might be satisfied with the normal market in Phnom Penh now, but we can provide more. We will change their minds about how it’s different.”
Another point of difference will be Aeon’s large car park, which can house approximately 1,400 cars and 1,600 motorbikes.
Aeon said it will not announce what stores will operate in the mall until the tenants have signed the necessary paperwork. However, the 150 stores will be a mix of foodstuffs, restaurants and cafes on the bottom floor, with clothing, electronics, and general goods on the upper floors. The mall will also house a movie theatre and a bowling alley.
Yajima said he believes that the demand for such a mall exists in Phnom Penh.
“Even the Phnom Penh city itself is growing in size and population,” he added.
Based on figures from Aeon’s malls in Japan, the company expects about 10 million visitors at the Phnom Penh mall in the first year. The mall is aimed at Phnom Penh residents primarily, Yajima said. “We came to Cambodia to provide a service to the local people.”
Aeon is considering building about five other malls in Phnom Penh, and possibly expanding into other cities in Cambodia, such as Battambang and Siem Reap, Yajima said. However, nothing has been confirmed yet. “Even though we might have a second or third project, we give everything to this project.”
Aeon Mall says it aims to make Aeon Mall Cambodia a “totally local company” in the future, but at the moment the management of the mall is comprised of Japanese employees, Yajima said.
Other companies from around Asia are now looking to invest in Cambodia, but Aeon is not worried about potential competition. “Competition is very effective for the economy. But we are confident we can provide something different that the others can’t,” Yajima said.
Cambodia Properties Limited assistant business development manager Nguon Chhay Leang said he was optimistic about foreign investment in Phnom Penh.
“Conditions are good now,” he said.
“Japanese investors are coming in, and investors from neighbouring countries like Thailand, Malaysia and Singapore are starting to invest, because they also see the potential of growth in the future.”
However, foreign investment could be a double-edged sword, Leang said. “It could bring benefits and also some disadvantages for a lot of people.
“We need to have rules and regulations involving foreign investment, such as how much money stays in Cambodia and how much goes. We need to have our own standards.”
Foreign investment and international business ventures will become more prevalent in the near future with the 2015 ASEAN Economic Community integration on the horizon, Leang said.
Despite Leang’s optimism when it came to foreign investment, he said he was sceptical when it came to the retail sector. “I have a little feeling about the retail market in Cambodia . . . Cambodians are not so ready in the retail area.”
Cambodians are not used to Western styles, nor the Western-sized prices the Aeon Mall will offer, Leang said.
However, Aeon might be a boon for neighboring business, especially those courting the younger generation, he said.
The Elephant Massage and Spa is situated directly opposite the Aeon Mall site, and director Pok Navy said she thought the mall would provide a boost for shops in the area.
“I think it will be good, because many people will come to the mall, and then see my shop,” she said. “Maybe the number of customers in the area will increase.”