Logo of Phnom Penh Post newspaper Phnom Penh Post - Covid-19 eases grip on capital’s retail market, but all not rosy



Covid-19 eases grip on capital’s retail market, but all not rosy

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The front of Aeon Mall 2 is shown in the capital’s Sen Sok district in 2018. Hong Menea

Covid-19 eases grip on capital’s retail market, but all not rosy

The launch of three new retail centres in the third quarter of this year has brought the total retail space in the capital to 370,000sqm as of September 30, according to research by real estate company CBRE Cambodia.

These projects are SCG Design Village in Sen Sok district, The Commune in Tuol Kork district and MC Park Project in Meanchey district.

CBRE Cambodia previously reported that new projects in January-June added 37,824sqm of retail space in the capital, bringing the total to about 390,000sqm.

Its latest report showed that the retail occupancy rate in the capital averaged 67.7 per cent in July-September, down by 3.8 percentage points from 71.5 per cent in April-June. CBRE data indicate that the corresponding figure for July-December 2020 was 76.1 per cent.

The report lists the average monthly rental prices during the period at $24.30 for “prime retail podium” units (down nine per cent), $23.60 for “prime high-street” units (down 0.4 per cent), and $21.50 for “community mall” units (unchanged).

CBRE Cambodia senior manager Kim Kinkesa told The Post on October 27 that the Cambodian retail rental market has been steadily declining since the global outbreak of Covid-19 early last year.

But even more pressing is the February 20 community event, which prompted the authorities to close some retail outlets, in a bid to prevent the spread of Covid-19. She suggested that it would take at least half a year to see noticeable improvements in demand and rental prices for the more desirable retail spaces.

With lingering concerns over fresh Covid-19 outbreaks, Kinkesa argued that neither rent nor occupancy rates would see a straightforward recovery in the near future.

“Even though the government has now decided to reopen the economy, market demand for rental space and prices will not be able to recover immediately. It is estimated that it would take at least six months for the market to recover after socio-economic conditions have returned to normal,” she said.

Of note, the CBRE Cambodia management has reported that well-known brands opened branches over the third quarter, and that they were unaware of any international stores closing during the period.

Offering a silver lining, Lucky Realty CEO Dith Channa opined that the government’s decision to reopen the economy and allow foreign guests back into the Kingdom was welcome news for the retail market, even if a swift recovery is unlikely.

The market is closely linked to the economic situation of shoppers, as well as confidence in safety during Covid-19.

“The retail market in Cambodia will be able to recover slowly after economic activity returns to normal,” Channa said.

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