The launch of nine new commercial developments in 2022 has brought the total retail space in Phnom Penh to more than 613,000sqm, according to real estate firm CBRE Cambodia, in a feat that has been attributed to effective Covid-19 management and the relatively early reopening of the country in November 2021.
The new establishments added more than 200,000sqm of retail space in the capital, marking a 179 per cent increase in area versus the seven projects totalling over 73,000sqm that were completed and put on the market in 2019, CBRE Cambodia said in a report published last week.
However, the retail occupancy rate in the capital still remains below pre-Covid-19 levels, averaging 70 per cent in 2022, down from 89 per cent in 2019, it noted.
The report lists the average per-sqm monthly rents during the year at $26 for “prime shopping mall” units (down 20 per cent from 2019), $23 for “prime high-street” units (down 15 per cent), $20 for “community mall” units (down 14 per cent) and $20 for “prime retail podium” units (down 32 per cent).
CBRE Cambodia noted that 99 “well-known” brands made their debut in the Kingdom last year, including H&M, OVS, GNC and Routine, up from 42 in 2019, although 48 others exited the market.
The real estate firm forecast that retail space in the capital would expand by about 120,000sqm this year, bringing the total to 733,000sqm.
Without elaborating further, CBRE Cambodia valuation and advisory manager Chin Daluch revealed to The Post on January 17 that the “majority” of the nine retail outlets’ openings had been postponed from earlier years, hinting that at least one had been put on hold since the 2010s.
She credited the relatively large number of launches to improvements in the overall Covid situation in Cambodia, listing some of the new additions as the AEON 3, Chip Mong 271 Mega Mall and “many small community malls”.
However, the uptick in new establishments in 2022 should not be interpreted as a universal improvement in retail metrics to pre-Covid levels, Daluch underscored.
She speculated that the market situation this year would either remain fairly unchanged or even deteriorate slightly, arguing that the retail segment is facing a supply glut, and that heightened inflation and elevated interest rates at major banks could deter existing and potential tenants’ plans to open or expand businesses at these outlets.
Global Real Estate Association president Sam Soknoeun, on the other hand, suggested that the retail space boom in the capital last year was driven by the recent emergence of large residential projects, as retail developers sought to tap into expected demand among residents for nearby eateries, shopping and entertainment.
This year, retail outlets will become even more popular among Cambodians, he contended. “With better economic growth in Cambodia and growing population in Phnom Penh, demand for retail will improve.”