Cambodia Investment Review
The retail real estate sector in Phnom Penh saw a significant growth in 2022, as the city continued to expand and develop. According to data from The Mall Company (TMC), there were 56 completed modern retail properties in the city as of the end of 2022, with an additional 12 under development and four more being planned.
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The modern retail properties being developed in Phnom Penh are expected to add significantly to the city’s retail real estate supply. In 2022 alone, 12 modern retail properties were launched, contributing 248,424 square meters towards the city’s modern retail supply. This was followed by an additional six modern retail properties expected to be completed in 2023, potentially adding a further 92,957 square meters of modern retail supply.
Community malls are the retail of choice
Between 2024-2026, Phnom Penh is expected to see the delivery of 10 modern retail centers, adding 213,614 square meters of modern retail supply. Additionally, there are 52,132 square meters of modern retail supply currently on hold, which could be delivered in the coming years.
TMC’s research also reveals that the city’s retail real estate sector is comprised of different types of modern retail properties, with community malls being the retail class of choice for many developers. As of the end of 2022, Phnom Penh had 32 community malls, five shopping centers, 11 retail podiums, seven shopping malls, and one retail arcade (Naga City-Walk).
Shopping malls are currently the largest contributor to Phnom Penh’s modern retail supply, contributing 359,223 square meters of modern retail space. Community malls are the second-largest contributor, with 197,455 square meters of modern retail space, followed by retail podiums with 76,915 square meters, shopping centers with 73,460 square meters, and retail arcades with 9,200 square meters.
Retail supply will reach over $1M square meter
Looking forward, TMC projects that Phnom Penh’s total modern retail supply will reach 1,022,824 square meters by 2026. However, an increase in modern retail supply is not necessarily an indicator of the true performance of the retail real estate sector. It is important to consider other factors such as occupancy rates, rental prices, and foot traffic to get a more accurate picture of the sector’s performance.
Despite this, Phnom Penh’s retail real estate sector is an exciting prospect for investors and developers. TMC’s data shows that retail podiums are expected to experience a growth rate of 219.97% in retail space (NLA) from 2023 to 2026, while retail arcades are expected to see a growth rate of 288% in retail space (NLA) over the same period.
Shopping malls are expected to experience a growth rate of 13.92% in retail space (NLA) from 2023 to 2026, while community malls are expected to see a growth rate of 30.83% in retail space (NLA) over the same period.
