CBRE: Retail rental prices drop sharply while supply increases substantially in Q1

• 29 April 2020
• Local News
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CBRE Cambodia has reported that retail rental prices saw a sharp slowdown in February 2020 as a result of the COVID-19 pandemic.
According to the CBRE report, retail rental prices sharply declined by 9.2% for community malls and 10.5% for prime retail podiums in February 2020.

The decline resulted from the spread of COVID-19 causing a decrease in the level of consumer traffic and retail sales and disrupting the expansion plans of stores of rental stores as well as retail rentals.

However, CBRS also predicted that the market will rebound during the second and third quarters of 2020 after customers and renters regain their investment confidence after the crisis eases.

While rental rates sharply dropped, retail supply increased significantly. One of the main reasons is because, in the same quarter, the total completed retail supply increased with the two soft launches of Samai Square and TL Sky Mall. The two projects grew completed retail stock by 6. 903 square meters in the community mall segment which is equal to 2.1% for the overall retail market or equal to 16% for community malls. This supply-exceeding-demand trend, for economists, maybe an interesting notion to further observe the current impact of COVID-19 on economic performance.

By the end of 2020, CBRE predicts that 101, 477 square meters of supply will be completed. But the fate of these projects is no different from other real estate projects, which could be delayed due to problems in the supply chain in the construction sector and due to the reduction of the retailers’ expansion activities. In particular, the direct effect of the coronavirus will have an impact on consumer confidence in the sector.

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