Mid-2023 Update: Cambodia’s Retail Sector Saw A Slight Decline, But New Strategy Emerged

• 19 July 2023
• Local News
• 2910 Views

Amidst a changing retail landscape, the first half of 2023 showcased a slowdown in new retail completions, following a wave of launches and developments in 2022. As of mid-year, over 39,000 sqm of new retail space was added, representing a 6% increase in total supply over the span of 6 months. However, the retail sector is poised for further expansion, with approximately 83,000 sqm of upcoming projects scheduled for completion by year-end. These projects primarily encompass community malls and retail podiums, reflecting consumers’ evolving preferences.

While the occupancy rate experienced a slight dip from 70% in 2022 to 68% by mid-2023, the retail sector witnessed a downward trend in quoting rents for shopping malls, retail podiums, and community malls, with rates decreasing by 4% to 5% in the past 6 months. Notably, prime high street rents have shown signs of recovery, reaching 95% of the levels seen in 2019, indicating the attractiveness of such locations for retailers seeking higher footfall and seamless B2C delivery access.

“The contrasting performance can be attributed to retailers’ strategic shift towards prime high street locations, where they can enjoy greater visibility, prominence, and convenient customer access,” explained Daluch Chin, Senior Manager, Valuation & Advisory of CBRE Cambodia.

To captivate consumer interest and drive footfall, new retail projects are embracing innovative concepts and adopting entertainment-oriented tenant mixes. The industry is witnessing a noticeable trend towards activity-focused spaces that cater to evolving consumer preferences.

As Cambodia’s retail sector adapts to changing consumer behaviors and market dynamics, the mid-2023 update highlights the shifting strategies employed by retailers to thrive in a competitive environment.

• Analysis
• Business and Market
• Economy and Finance