Nearly a dozen new malls are slated to open in Phnom Penh by this year, doubling the capital’s total retail space.
Nearly a dozen new malls will open in Phnom Penh by the end of the year, increasing the competition to secure retail tenants and doubling the capital’s total clustered retail space.
The new malls are led by Aeon Mall 2, with 70,500 square metres of retail space, and the Phnom Penh MegaMall, with Cambodia’s first Parkson department store and a total 70,200 square metres of retail space. Other malls and shopping plazas expected to open this year include Midtown Community Mall, The Bridge, Downtown 93, The Park, Noro Mall, Prince Plaza Mall, Eden Garden and Olympia Plaza Mall
The new malls will increase the total retail space in the capital to 450,000 square metres, about double the existing total after last year’s opening of Exchange Square, whose retail podium added 10,700 square metres, according to real estate firm CBRE Cambodia.
Ann Sothida, director of CBRE Cambodia, said the Kingdom’s retail sector is showing many positive signs of growth, and even as the number of malls keeps adding up it is an increasingly segmented market, with the various malls marketed to different target consumers and in different locations.
“The continuous rise of the purchasing power and changing lifestyle trends in Cambodia is spurring on the growth in the number of malls in the country,” she said.
Many of the projects nearing completion are smaller and personable open-air venues known as “community malls”. At least four are scheduled to open in 2018, including Noro Mall, which picked up the award for Best Retail Architectural Design at this year’s PropertyGuru Cambodia Property Awards
These smaller malls also mark a departure from the trend of bigger and sleeker malls designed as platforms for big-name international retail brands.
Sear Rithy, chairman of WorldBridge Group, the Cambodian partner in the joint venture behind the 20,000 square metre retail podium in The Bridge, said the Cambodian market is not yet ready for international brand outlets. He said high-end shopping malls, including The Bridge, are struggling to attract these retailers because the few Cambodians with enough money to afford their designer or luxury goods tend to travel abroad to buy them.
“It’s not just here in Cambodia, but even wealthy people in Vietnam would rather shop for expensive brands outside the country,” he said.
However, Rithy said he expects this trend to change in the next five to 10 years as people recognise the high cost in time and money of overseas shopping trips and look to pick up the same quality goods at home.
The rise of modern malls would appear to threaten the traditional markets that have historically been where Cambodians do most of their shopping.
However, Leng Kimsrong, director of O’Russey market, a sprawling multi-level indoor complex of market stalls in central Phnom Penh, said there is room for malls and traditional markets to co-exist. He said the two types of shopping experiences “target a different type of consumer and offer a different range of products”.
Rather than fear them, he said traditional market vendors could learn a lot from the modern malls springing up around the capital. The popularity of malls shows that local consumers value the increased order and security they offer. Vendors in traditional markets should try to follow the example of mall store employees and adopt a more soft-spoken, polite, friendly and inviting approach to customers.
Chor Saing, general manager of Ratana Plaza in Sen Sok district, said he is not worried about competition from the new malls coming into the market as his shopping plaza already has a secure customer base, especially from tourists staying in the hotel on the top floor of the retail complex.
“Competition is good, because it can help us attract different types of customers and strengthen the quality of our services so that our customers will be more satisfied,” he said.
He added that despite the increased competition, he had no plan to reduce the lease rates for retailers in the plaza as demand remains high.
Yet the arrival of bigger, modern malls such as Aeon Mall, which opened in 2014, have pushed some of the capital’s older malls to update their design and services.
The former Sorya Mall, which was the first mall in Phnom Penh when it opened in 2003, reopened last December after a $5 million renovation. Rebranded as Sorya Centre Point, the eight-storey retail complex was revamped to broaden its appeal to both local and foreign shoppers, who have more shopping options than when the mall first opened 15 years ago.