The launch of 12 new commercial developments in 2021 has brought the total retail space in Phnom Penh to more than 400,000sqm, according to research by real estate company CBRE Cambodia.
CBRE Cambodia reported that the new developments added more than 88,000sqm of retail space in the capital, compared to the five projects in 2020 totalling over 40,000sqm.
Its latest report showed that the retail occupancy rate in the capital averaged 67 per cent in 2021, down from 84 per cent a year earlier.
The report lists the average monthly rental prices during the year at $27 for “average shopping mall” units (down six per cent year-on-year), $24 for “prime high-street” units (down 10 per cent), $21 for “community mall” units (down 36 per cent) and $20 for “prime retail podium” units (down 17 per cent).
CBRE Cambodia noted that 20 famous international brands made their debut in the Kingdom last year, including 7-Eleven, Pizza Hut, Papa John’s, Fila and Ralph Lauren.
The real estate firm forecast that retail space in the capital would expand by more than 190,000sqm this year – through units categorised as “shopping mall” (over 110,000sqm), “community mall” (over 50,000sqm), “retail podium” (over 25,000sqm) and “other types” (more than 1,000sqm).
It listed some of the retail projects due to go up for sale in 2022 as Chip Mong Sen Sok Mall, Chip Mong 271 Mega Mall, Prince International Plaza and Lucky Pavilion Mall.
CBRE Cambodia senior manager Kim Kinkesa told The Post on February 2 that the retail rental market was hit hard during the second half of 2021, as online shopping gained more momentum.
Although the situation has on the whole improved compared to end-2021, this year could be shaped by a number of major challenges, she said.
As an example, she pointed out that the nearly 200,000sqm of retail space set to be added in Phnom Penh this year would very likely ignite fiercer competition in the rental market.
Global Real Estate Association president Sam Soknoeun shared Kinkesa’s sentiments, saying that the real estate rental market suffered a sharp fall in the second and third quarters of 2021, primarily due to the Kingdom’s third coronavirus wave – dubbed the “February 20 Community Event”.
However, he said, efforts to resume economic activity and reopen borders to fully-jabbed travellers have catalysed a recovery in the market as well as demand for retail space.
He argued that high vaccination rates and effective Covid-19 management would result in sustained lower retail vacancy rates going forward.
In 2021, a total of 4,303 new construction projects were approved nationwide, with cumulative registered capital investment of $5,333,798,525 – down by 31.21 per cent year-on-year – and total floor area of 12,998,072sqm, Ministry of Land Management, Urban Planning and Construction data shows.
