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Yawning demand for Phnom Penh retail space extends to third quarter

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The four-storey View Park Mall in Phnom Penh City Centre is scheduled to launch early next year. Photo supplied

Yawning demand for Phnom Penh retail space extends to third quarter

Covid-19 continued to deflate demand for retail space in Phnom Penh’s shopping centres and community malls in the third quarter of this year, pushing seven international brands to cut their losses and exit the market, according to a research report from a local real estate service provider.

Vacancy rate stood at around 10.97 per cent as of September 30, up from 10.2 per cent on June 30 and 10.63 per cent on December 31, CBRE Cambodia reported.

It noted that total supply jumped 6.1 per cent quarter-of-quarter, highlighting a 26.1 per cent increase in the “community mall” category.

In the third quarter, two new community malls added 21,800sqm of retail space in the capital, while an undisclosed number of other projects with a cumulative 40,000sqm of space were delayed, it said.

CBRE Cambodia director Thida Ann told The Post that the decline in vacancy was largely due to Covid-19-driven retail sales slump.

“We’ve observed a decline in the sales of retailers due to Covid-19’s [impact on how] they run their businesses.

“Some retailers are reducing their stock volume or opting instead to lease smaller spaces outside of malls, whereas others are shifting their focus to online sales.”

Pakzone Property Management Co Ltd recently announced that it would launch its four-storey View Park Mall in Phnom Penh City Centre early next year.

It said that 80 per cent of the 9,000sqm of currently available retail space had been leased.

“We couldn’t have asked for a better location,” chairman Leng Thun said. “View Park Mall is almost at full occupancy because our retail partners recognise the prominent place our mall will have in Phnom Penh.

“What the mall offers is a great shopping and dining experience with parking in the centre of Phnom Penh, where people constantly on the move can have a place to relax with their families and friends.

“We fully expect more leasing commitments to be finalised in the coming months from a diverse group of brands also committed to providing an enjoyable, comfortable, and unforgettable shopping experience.”

The CBRE Cambodia report lists the current average monthly rentals at $28.46 per square metre at “prime shopping mall” units (unchanged from the June 30 rate), $26.03 at “prime retail podium” units (unchanged), $22.15 at “community mall” units (down 0.4 per cent) and $26.23 at “prime high-street” units (unchanged).

Though seven international brands exited the Kingdom in the period from July-September, 18 others made their debut during the quarter.

CBRE Cambodia recommended that landlords revise their lease agreements and be more flexible in their terms and incentives, especially with anchor tenants.

Retailers should reinforce their market strategy by, inter alia, building strong public relations, organising more events and run more promotions, it said.

At the same time, they should look into digitalisation to improve the customer experience via contactless payments, QR codes, online delivery, the social media market, et cetera, it added.

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