For Laszlo Fulop, CBRE’s newly appointed senior retail consultant in Cambodia, big changes are afoot in Phnom Penh’s retail sector, with AEON Mall already open, and Malaysian retail-chain Parkson set to open its doors in 2015.
The surprise for Fulop – whose presence in Phnom Penh represents the first time CBRE has established retail services as a separate unit in Cambodia – is that it has not happened sooner.
“We started to see changes like this in Ho Chi Minh City more than 10 years ago,” says Fulop of his previous CBRE posting. “Today, the big retailers are opening in second- and third-tier cities in Vietnam, so we expect their expansion into new frontier markets such as Cambodia and Myanmar.”
Fulop says the big players, such as Metro Cash & Carry, Groupe Casino’s Big C and Lotte Group from Japan, are usually the pioneers in opening new markets. They serve the everyday needs of individuals and businesses, and demand in Phnom Penh has reached the necessary volume that such large-scale operators need to be successful.
In other words, according to Fulop, a turnaround is taking place and Cambodia is opening its doors to major retailers. “The main driver of CBRE launching its full retail-service business line in Cambodia is our strategic relationship with Parkson, and we have been appointed as exclusive marketing and leasing service provider for their upcoming project,” he says.
The Parkson Phnom Penh City Centre Mall, which will be located on Russian Boulevard, will have two main sections – the Parkson department store and a shopping mall with leased retail outlets.
The department store will measure approximately 11,000 square metres, while the mall will measure more than 25,000 square metres – the latter leased by CBRE. In addition, a multiplex cinema, IT mall and a supermarket will be housed in the nine storey retail complex of 68,000 square metres in total.
“We’re preparing initial background work for launching the leasing activity for the mall this September, and we’ve already had overwhelming interest from local and international retailers, but we haven’t contracted any clients yet,” says Ann Thida, associate director of CBRE Cambodia.
According to Fulop, rentals will get underway in earnest with a roadshow focused on retail opportunities in Cambodia starting later this year. The roadshow will start in Vietnam, before going to Bangkok, Kuala Lumpur and beyond.
“The roadshow will mark the start of leasing for Parkson,” says Fulop, who adds that he expects the retail mall to be home to about 200 brands, with a good mix of smaller- to larger-sized retail units, as well as well-established existing players and some exciting new brands and concepts appearing in Cambodia for the first time. “We’re currently working to finalise the floor-by-floor tenant-mix allocation, and we’re starting to meet with major groups,” says Fulop.
“This roadshow will focus on the Parkson project – but also provide information about opportunities and what people want to know about the retail market, what is already here, what is in the pipeline,” says Fulop.
CBRE plans to work proactively with potential retail investors in Cambodia, providing information on forms of entry, legal and taxation issues, as well as sourcing local partners for international franchisers.
“Many investors outside Cambodia lack data, and information about the markets,” says Fulop. “We will offer full service to local retailers and local retail groups, as well as foreign-licence holders.”
CBRE will also act as a consultancy to tenants and landlords, providing leasing services for developers and landlords, as well as tenant representation.
“Although it’s not our core business, we will connect people, and we know who are the capable people, when it comes to connecting franchisers,” he says.
Parkson operates about 142 stores in 66 cities regionally – Malaysia, China, Vietnam, Sri Lanka and Myanmar. “Our target is to focus on medium- to high-income shoppers, with the aim of strengthening the retail sector here,” says Thida. “Previously, people thought that Cambodians weren’t ready for high-end malls, but obviously that is changing and people want to experience something new.”
Sung Bonna, director of Bonna Realty Group, says the mall project showed that Cambodia was on the cusp of a new wave of modernisation.
“If we consider the geography, population and small number of malls, there is still plenty of room for growth,” says Bonna, who adds that in the past wealthy Cambodians went overseas to shop for brand products.
“With the arrival of high-end malls such as Parkson and AEON, Cambodians will be able to shop for brand-name products locally,” he says.
Additional reporting by Siv Meng