Local conglomerate Overseas Cambodia Investment Corporation (OCIC) will invest $60 million in the construction of Olympia Plaza, a seven-storey shopping mall being built inside the company’s mixed-use Olympia City project in central Phnom Penh, the company confirmed yesterday.

“We will invest $60 million in construction costs alone to build Olympia Plaza,” said Touch Samnang, deputy director-general of OCIC.

Samnang said the upscale shopping centre would cover 100,000 square metres, comprised of seven floors of retail space and two basement levels. He declined to reveal whether a firm had been selected to manage the mall, or details on its expected retail mix.

Meng Chamroeun, chief engineer for the Olympia City project, said that 15 to 20 per cent of the shopping centre has already been built and the remainder is scheduled for completion in mid-2017.

“If there are no changes in the plans, [the mall] will be finished by the middle of 2017,” he said.

Phnom Penh has an undersupply of prime retail space, according to real estate consultancy Knight Frank, but this could change by the time Olympia Plaza opens as a slew of modern shopping centres take shape.

The capital’s retail sector currently comprises 134,143 square metres of net-lettable area (NLA), of which 46 per cent is classified as prime space, Knight Frank said in its latest snapshot of Cambodia’s commercial real estate market.

While it deemed this an undersupply based on the size of the market, a total of 163,438 square metres of NLA is expected to enter the market by 2019 as at least two stand-alone malls and 11 mixed-use shopping centres are planned.

Sung Bonna, president of the Bonna Realty Group, said that the existing and planned retail space should satisfy future demand, but competition will be tight given the capital’s relatively small population of middle- and high-income spenders.

“Market demand will be impacted once new malls open because the new offerings will cannibalise the customers of existing malls,” he said.

Bonna said those able to afford the high prices of retailers in upscale malls such as Aeon and Parkson are more inclined to travel overseas on their brand-name shopping binges, while limited-income consumers can only afford to window shop. This has put pressure on retailers.

“It is hard for retailers to afford for a unit in the new modern malls,” he added.

Base rents for prime real estate in Phnom Penh range from $10 to $22 per square metre per month, in addition to 10 to 25 per cent of the tenant’s monthly sales, according to Knight Frank. Rents for smaller spaces can run up to 10 times higher.