On Thursday, 21st April, 2016, Hongkong Land, DFDL and CBRE Vietnam were organizing a special event about “Doing business in Cambodia” at Park Hyatt Hotel, Saigon (Ho Chi Minh City).
CBRE honored to present about Cambodia Market Outlook and the overview of the Retail Real Estate Market in Q1/2016. DFDL will also share the legal update for investing and doing business in Cambodia.
Central Phnom Penh enjoys broad rise in values
Strong take-up across new mid-rise office developments continued over Q4, 2015.
Hongkong Land’s mixed-use development, Exchange Square, comprising approximately 18,000 sq.m of office and 8,000 sq.m of retail space, continues construction, with completion on track for Q4, 2016.
Total of 689 condominium units, across 5 projects, announced during Q4, bringing the total number of off-plan condominiums launched over the course of 2015 to 7,014 across 26 buildings.
Total of 5 developments, comprising strata-title office space for sale off-plan, announced over the course of 2015.
Strata-title office space to account for approximately 25% of total office stock by 2020.
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INTERNATIONAL BRANDS DRIVE PHNOM PENH RETAIL DEMAND
Phnom Penh’s retail market continues to benefit from new international entrants, with food and beverage, fashion, accessories and cosmetics retailers driving demand for both shopping centre and high-street retail space. Q2, 2015 sees Aeon Mall, the country’s first international shopping centre, mark one year of operations. Whilst a number of retail groups have sought to reposition their brands within the centre, Aeon has maintained a commitment rate of 100% since launching at the end of Q2, 2014.
Although minimal retail supply is set to come on-stream over the course of 2015, with only the retail podium at Sokha Hotel delivering 1,020 sqm of leasable space in Q1, 2015, supply over coming 3 years is set to increase significantly, from to 214,520 sq.m to 455,348 sq.m by end of 2017, representing an overall rise of 112.26%. The growth in supply can be attributed to the delivery of new shopping complexes, such as the Parkson’s Phnom Penh City Cente, due to contribute 57,000 sq.m in Q2, 2016, and the rise in large-scale, predominantly residential schemes with plans to incorporate notable retail components, such as Oxley’s ‘The Bridge’, due to deliver 24,000 sq.m of retail space by Q4, 2017.
Demand for prominent high-street retail space on Phnom Penh’s key boulevards continues to expand, driven by both international retailers and more established domestic groups. Sihanouk Boulevard, as of Q2, 2015, enjoys minimal vacancy, typically commanding rents of between 20-30 USD per sq.m.
Retail supply in the capital is set to rise significantly by the end of 2017, driven by a combination of new international shopping complexes, such as Parkson’s Phnom Penh City Centre, delivering 57,000 sq.m in Q2, 2016 and Lion City, the second project by the Malaysian developer, set to deliver a further 61,000 sq.m of retail space over the course of 2017, in addition to Hongkong Land’s Exchange Square, supplying 13,000 sq.m of retail space in Q1, 2017.
Vacancy rates within Phnom Penh’s centrally located, purpose built retail centres remains comparatively low, at 22% as of Q2, 2015, with Aeon’s high-occupancy level reducing the overall vacancy rate amongst shopping mall’s from approximately 25% prior to its launch in Q2, 2014. Whilst a number of retail complexes, delivered in secondary locations, continue to struggle to attract retailers, centrally located retail centers are benefiting from high levels of occupier demand.