Welcome to Retail Insights 8 where we delve into the supply-side dynamics of the retail real estate sector and what was a record-breaking year for 2022.
As of year-end 2022, the total existing retail supply in Phnom Penh reached 716,253 sq.m (NLA) with 2022 experiencing the highest ever Y-o-Y retail supply growth recorded in Cambodia with a 53% (248,424 sq.m) increase over the 12 months of 2022.
Key Take-Aways:
• 248,424 sq.m in retail NLA delivered in 2022 (53% growth):
– Shopping Malls contribute a supply of 359,223 sq.m (NLA) of modern retail space in Phnom Penh.
– Community Malls have been the retail class of choice for the many developers with 32 community malls now contributing 197,455 sq.m (NLA) of modern retail space in Phnom Penh.
There is another 205,047 sq.m (NLA) in the pipeline with 152,915 sq.m currently on-hold and not released into the market for leasing and project opening.
• 52,132 sq.m of modern retail supply (NLA) is currently planned.
• A further 152,915 sq.m of modern retail supply is currently on hold.
With 2022 not seeing the resurgence in demand hoped for as Cambodia transitioned out of a Covid-19 induced holding pattern, demand was dampened in the retail real estate sector with Aeon Meanchey and CM 271 absorbing much of the new store demand in the market.
With supply outstripping demand, a tenant market continues driving down achievable rental rates and providing tenants with increased options and ability in lease term and condition negotiations.
With circa 150,000 sq.m NLA built but not released to the market and 50,000 sq.m NLA currently under development as of January, 2023, the supply vs demand dynamics will continue with rents being suppressed below pre-covid levels for 2023 and likely 2024.
For more in-depth information and advise into the retail real estate sector, please do not hesitate to contact The Mall Company (TMC) and we will be happy to help!
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The Mall Company is a real estate agency in Phnom Penh and is considered as Cambodia’s commercial and retail leasing specialist for shopping complexes, from the smallest boutique retail plazas to the largest shopping centers. We provide full and exclusive property management from retail management, leasing, marketing, and retail consultancy. The Mall Company is working with a strong team to develop all our projects to become unique retail destinations in Cambodia.
> For more information, contact us by email: enquiries@themallcompany.com or by phone: +855 89 999 681 / +855 93 999 621
