The occupancy rate of retail space in Phnom Penh dropped to 66.6 per cent in the first quarter of this year, down 0.4 percentage points from 67 per cent in October-December 2021, according to a report by real estate company CBRE Cambodia.

This trend comes even as pandemic restrictions were phased out and the Kingdom battled to emerge from the shadow of Covid-19, and as the total retail space in the capital is expected to increase substantially this year.

The report compared the first-quarter occupancy rate with the figures of the corresponding quarters in 2021 and 2020, respectively at 74.9 per cent and 89.9 per cent.

The report lists the average monthly quoting rental prices during the period at $27 for “prime shopping mall” units (unchanged from the fourth quarter of 2021), $22 for “prime high street” units (down 6.8 per cent), $21 for “prime retail podium” units (up 5.6 per cent), and $21 for “community mall” units (down 1.6 per cent).

In January-March, three “community mall” projects were completed and put on the market in the capital, namely the Chip Mong Sen Sok Mall in Sen Sok district, Prince Times Square in Chamkarmon district, and 60 Avenue in Meanchey district.

According to CBRE Cambodia, in the first quarter of 2022, 44 “well-known stores” opened, including six international brands such as H&M, Wilsonart and OVS.

Kim Kinkesa, senior manager of research and consulting at CBRE Cambodia, told The Post on April 20 that the capital’s retail leasing market remained “remarkably active” over the first quarter, with many brands debuting at the new malls and several existing ones opening additional branches.

“In 2022, we may see rental activity continue to improve, but with so many new projects scheduled to open this year, the retail rental market will face more competition based on rental prices and favourable terms,” she said.

Citing Google Mobility Tracker data, she said traffic to marketplaces and entertainment venues in the beginning of the year had improved quarter-on-quarter, after having plummeted in May last year following a wave of lockdowns triggered by the health crisis.

Global Real Estate Association president Sam Soknoeun claimed that there is an oversupply of retail space in Phnom Penh, considering the capital’s population of more than two million, with outlets now “present almost everywhere”, even in some gated-community developments – known locally as borey.

Moreover, Soknoeun said, the ongoing Covid-driven global economic crisis and rising fuel prices have led to reduced spending by households. “I believe the retail market situation in 2022 will remain difficult, amid an increase in new supply,” he said.

CBRE Cambodia predicts that around 300,000sqm of retail space will be added to the Phnom Penh market this year, pushing the total past 700,000sqm.

In 2021, a total of 4,303 new construction projects were approved nationwide, with cumulative registered capital investment of $5,333,798,525 – down by 31.21 per cent year-on-year – and total floor area of 12,998,072sqm, Ministry of Land Management, Urban Planning and Construction data shows.