Cambodia set for mall glut as foreign and local projects pile up
Doubts grow over whether fragile middle class can support rapid boom in retail space
SHAUN TURTON and BOPHA PHORN, Contributing writersJuly 24, 2020 14:19 JST

PHNOM PENH -- Five, sometimes six, days a week Mao Sophorn brings her 1-year-old daughter to Aeon Mall 2.

"People come here to hang out, relax and to feel fancy," said Sophorn on a recent Thursday afternoon, as her daughter sat on her knee and her two young nephews, clad in Spiderman t-shirts, played in a trolley.

The kids, she says, demand to come. The mall, Japanese developer Aeon's second in Cambodia, offers more than just its 100-plus shops, restaurants and cafes. Spread over 86,000 sq. meters, its attractions include carnival rides, an aquarium, a TV studio, and an indoor soccer field.

"If the new malls have an interesting set-up like this," Sophorn added, "I'm sure people will come."

And that's the multi-million dollar question: with the Cambodian capital experiencing a shopping mall boom, will shoppers come -- and in large enough numbers -- to support a raft of new projects in the pipeline.

Six years since Japan's Aeon launched what is widely considered the country's first modern mall in 2014, the city of 2.1 million has added more than a dozen malls, retail podiums and shopping centers.

In that time, total retail space has more than doubled to some 340,000 sq. meters of net leasable area across 23 malls, according to real estate consultancy Knight Frank. And several more major projects are slated to open in the coming years.

The main driver of the boom, say experts, is that local developers are responding to Aeon's bullish approach by pursuing their own projects in an attempt to establish their own brands early in the game.

Aeon wants to dominate. Opened two years ago with a price tag of $120 million, Aeon 2 -- officially known as Aeon Sen Sok City -- is the Japanese retail giant's biggest mall in the region. Outside Japan, there is only one larger Aeon complex, in China.

Its third project in Phnom Penh, slated for 2023, will be even bigger. Aeon's aggressive strategy of "capturing overwhelming market share" is laid out in company reports, which detail a regional expansion plan to reduce reliance on domestic sales.

The company aims to increase its operating income from 62 billion yen in 2019 to 100 billion yen by 2025. Of this target, it wants overseas business to comprise 35% -- up from 12% last year.

Cambodia housing developers, meanwhile, have moved to start their own retail projects, often as additions to gated community developments known as "boreys".

Within kilometers of the 170,000 sq. meter site of Aeon 3 -- which will be built by Hyundai Engineering -- Cambodian borey developer Peng Huoth Group is building two malls. In the same area, local construction conglomerate Chip Mong is working on its own "271 Mega Mall," which at some 160,000 square meters, will rival the new Aeon in size.

"We think there's going to be quite a significant oversupply," said Ross Wheble, Country Head for Knight Frank Cambodia. "Occupancy rates will go down, I think landlords are going to start to offer quite big incentives on rent."

By the end of 2022, total retail stock could shoot up to some 830,000 sq. meters, Knight Frank predicts. Of future supply, 84% will be "prime grade" and mostly within major retail malls.

The figures are predicated on all of the projects monitored by the real estate consultancy being finished and open on schedule -- a scenario thrown into some doubt as the coronavirus slams the country's economy.

In its Q1 report, real estate consultancy CBRE Cambodia said overall retail footfall and sales had "plummeted" due to coronavirus concerns. The crisis has impacted stores' expansion plans and seen retail rental rates drop by around 10%.

"[The pandemic] has probably delayed some openings of shops and decisions being made by retailers to expand," said CBRE senior director James Hodge. "We're starting to see signs of market activity picking up, which is good."

In addition to coronavirus woes, another problem will exacerbate the coming glut: the fragility of Cambodia's emerging middle class.

Developers face building projects in an increasingly overcrowded small market where shoppers lack the purchasing power to attract major retail tenants.

Hodge said new openings from international retail brands had been driven 80% by the food and beverage sector. However major fashion retailers, at this stage, remain uninterested in the country.
https://asia.nikkei.com/Business/Retail ... ts-pile-up

If the “borey” malls are anything like Olympia Mall they will not succeed. Too much prime retail space compared to the population that resides there. Plus the Khmer do not yet have the know how to make a quality mall. An aircon glass enclosed local market, yes. A competitor to Aeon, no.

If another international mall operator comes into the mall business, it may be a game changer for Aeon.

Ot Mean Loi wrote: ↑Sun Dec 29, 2019 12:46 pm And Aeon 3 is on the way!

https://www.khmertimeskh.com/50674131/t ... l-approval

OML

Aeon Mall 3 starts construction and is scheduled to open in 2022
October 8, 2020

Phnom Penh: AEON III is the largest mall in ASEAN, developed by AEON Mall Co., Ltd, a larger retail operator Japanese company has opened the construction site of Aeon Mall, the third branch in Cambodia after the successful operation of the first and second branches 2 already.

The groundbreaking ceremony for the development of Aeon Mall III or Aeon Mall Meanchey was attended by His Excellency Mikami Masahiro, Ambassador of Japan to Cambodia and Governor of Phnom Penh, HE Khuong Sreng.


The third AEON Mall is scheduled to officially open in 2022 and will be the largest Aeon mall in ASEAN. According to the company's press release on Wednesday, October 7, 2020, this shopping mall development project is located along Samdech Blvd. Techo HE (or Street 60 meters) covers an area of ​​174,000 square meters, which is much larger than the first Aeon Mall(68,000 square meters opened in 2014) and slightly larger than Aeon Mall Sen Sok (151,000 square meters).

Land experts estime that the construction of Aeon Mall 3 will help to develop southern Phnom Penh.

The future DNC Mall, Facebook
Trouble at Chinese-owned DNC Mall construction site in Phnom Penh, as workers struggle to get paid for the second time this year:

Builders at Mall Say They Haven’t Been Paid for Three Months, Again
2 min read
Mech Dara, Mon Oct 26, 2020 7:40 pm
Nearly 100 construction workers protested in Phnom Penh’s Toul Kork district on Monday, claiming the developer of a new mall has not paid them for three months.

DNC Mall, in Boeng Kak II commune, issued a statement in June when workers protested with similar complaints. At the time, DNC blamed the contractor, Yu Ti Building, which in turn accused the mall of missing payments.

Choem Chab, 40, a bricklayer from Kampong Thom province, said about 100 workers from outside Phnom Penh, who had worked at the site and another being built by the same company, already went home because they weren’t getting paid.

“We’ve done no work because we are waiting to get our payment,” Chab said. “Yesterday I borrowed $20 to pay for my food. … Now I’m in debt for nearly $1,000.”

She said she was borrowing from the broker that had brought her to the job.
https://vodenglish.news/builders-at-mal ... ths-again/

[Note: The companies concerned are Yuti Building Decoration Engineering Cambodia Co Ltd and the owner of DNC Mall, Hong Ding Xing Tain Di.]

Another beautiful mall on option in Phnom Penh soon:

October 28, 2020
View Park Mall ‘to add spark to Phnom Penh’s city centre’


By the start of 2021, city residents will have another commercial shopping option with the grand opening of View Park Mall in Phnom Penh city centre.

Located in the Boeung Kak Lake area, the beautifully-designed four-storey mall will offer a wide array of local and international retail brands, food and beverage options, office co-working space and a sky bar.

View Park Mall is developed by PAKZONE Property Management Co Ltd and will be managed by C-Herald Property Service Co Ltd, which has more than 13 years of experience managing shopping malls, office buildings, apartments and condominiums.

The mall’s areas available for lease is 9,000 square meters. Leased occupancy is 80 percent complete. Its proximity to villas, hotels, schools, sports complexes and two other shopping malls in Phnom Penh city centre promises visibility and high foot traffic. With newly paved roads in the area, the mall is easily accessible to all parts of Phnom Penh, including the greater Toul Kok residential and commercial areas. By 2022, world-renowned hotel chain Hilton will open its first ever branch in Cambodia just a stone’s throw away from the mall.
https://www.khmertimeskh.com/50777652/v ... ty-centre/

Prince Square to be developed in Phnom Penh
27/01/2021

Prince Square is set to be Prince Real Estate Group’s first commercial retail project in Phnom Penh, Cambodia.

This week, Prince Holding Group held an investment agreement ceremony for Prince Square. The development will offer a total floor area of 35,000 square meters of retail space. The four-storey building will feature a large supermarket, an international cinema, a fitness club, international restaurants, an indoor playground and fashion stores and more according to the press release from the developers.

In addition, well-known brands and franchises such as like Adidas, Levi’s, Skechers, Nike by Supergo, Huawei, OPPO, Potato Corner, Dakasi, Panda Cake and Pizza Hut will be at Prince Square.

Steven Wang, CEO of Prince Real Estate Group said: “We are thankful for the support offered by the Phnom Penh municipal government and leaders of relative departments that has ensured the smooth development of the project so far.

It has been a long journey for Prince Square but with such high-profile tenants signing on, we have taken an important first step. Prince Square and its strategic brand partners will complement one another by sharing resources and seeking development opportunities together allowing us to live up to our aspiration of helping Cambodians build a better life.”

Prince Real Estate Group was founded in 2015 and has completed numerous projects in Phnom Penh and Sihanoukville. In late 2020, they opened Prince Mall in Sihanoukville, a 50,000sqm retail space spread over five floors.
https://www.b2b-cambodia.com/news/princ ... hnom-penh/