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 (RM627.3 million) mall in Phnom Penh.
The 68,400 sq m 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 sq m of entertainment space that will include an arcade and recreation area for children, executives 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 Aeon was considering opening other locations in Cambodia.
Kuniaki Minohara, general manager of Aeon’s leasing department, has said 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 include parking for 1,700 cars and 1,000 motorbikes, while roughly 56,500 sq m 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 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 GDP per capita has been on the rise since 2006, growing 70% since 2006 to about US$900 last year, according to Cambodia’s Ministry of Economy and Finance.
Aeon acquired the 6.7ha 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 profit grew 6.17% to ¥9.4 billion (RM341.8 million) in the first half of the year compared with 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 to recent data by the property services company CB Richard Ellis (CBRE), 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 sq m worth of shopping venues in 2017, up from about 105,000 sq m in June, the CBRE report states.
Japanese foreign direct investment in Cambodia reached US$75 million last year, up from about US$35 million in 2010, while the Japanese government has promised an additional ¥10.51 billion to fund several infrastructure projects. With the construction of Aeon Mall, Japanese investments in Cambodia are expected to reach US$300 million by the year-end. — Bangkok Post
This article first appeared in The Edge Financial Daily, on Dec 18, 2012.