Shopping shapes up in Phnom Penh
With demand for shopping space in Cambodia on the rise and investor interest growing, the Japanese developer Aeon Mall (Cambodia) Co Ltd last week broke ground on the construction of a US$205-million mall in Phnom Penh.
The 68,400-square-metre high-end shopping centre, located in Chamkar Mon district next to the five-star Sofitel Phnom Penh Phokeethra, will include 150 large retail units, a cinema complex that can seat 1,000 people and 15,000 square metres of entertainment space that will include an arcade and recreation area for children, executive have said in the past.
“We are happy to contribute to the development of the local economy because it will create more than 2,000 jobs. We want to stay deeply rooted in Cambodia and we want to be loved the most,” Motoya Okada, president and CEO of Aeon Group, was reported as saying at the groundbreaking ceremony by the Japanese media.
He added that the Japanese company was considering opening other locations in Cambodia.
Kuniaki Minohara, general manager of Aeon’s leasing department, has said that when construction finishes in the second half of 2014 he hopes half of the retail units would be occupied with locally established brands, while Japanese brands would account for 30% and other international brands 20%.
The complex will also include enough parking for 1,700 cars and 1,000 motorbikes, while roughly 56,500 square metres of the mall space will be leased out to tenants.
“I think Aeon coming to Cambodia is a really good thing. They are going to bring in a lot of great brands into this country and I think they set out for several target groups that can benefit as the general spending power in Cambodia is growing,” said Sunny Soo, the Cambodia country head for the real estate company Knight Frank.
“Right now, you don’t have any properly managed or professional shopping malls and with the market growing the way it is, Cambodia needs one.”
Cambodia’s gross domestic product per capita has been on the rise since 2006, growing 70% since 2006 to about $900 last year, according to Cambodia’s Ministry of Economy and Finance.
Aeon first acquired the 6.7-hectare plot of prime real estate between Sothearos Boulevard and the Tonle Bassac river last year from South Korea’s GS Engineering & Construction for an undisclosed amount.
With 62 malls in Japan and China, Aeon currently has new projects in the development phase in additional regional locations like Vietnam and Indonesia. According to Aeon Mall Co’s most recent financial statements, net profits grew 6.17% to 9.4 billion yen, or about $114.09 million, in the first half of the year compared to the same period in 2011.
Cambodia’s property market is only now recovering from a bust three years ago that saw the construction of several projects come to a grinding halt. Today, developers are finding a demand for high-end retail projects that, according recent data by the property services company CB Richard Ellis, will triple in total space in the next five years.
Aside from the new Aeon Mall, Malaysia’s Parkson has started construction on a shopping centre in Phnom Penh, while the city’s lone casino, NagaWorld, is gearing up for an extension that will bring in an underground “City Walk”.
If these projects are realised, there could be as much as 312,000 square metres worth of shopping venues 2017, up from about 105,000 square metres in June, the CBRE report states.
Japanese foreign direct investment in Cambodia reached $75 million last year, up from about $35 million in 2010, while the Japanese government has promised an additional 1.51 billion yen, or $242 million, to fund several infrastructure projects. With the construction of the Aeon mall, Japanese investments in Cambodia are expected to reach $300 million by the end of this year.