AEON tenants target Cambodia’s middle class

[geovalin]

Hor Kimsay and Eddie Morton

An ice-skating rink, bowling alley, seven-screen cinema and a proverbial catwalk of high-end European and US labels will start vying for a slice of Cambodia’s rising middle class inside the soon-to-open AEON Mall, management with the firm overseeing it confirmed on Saturday.

The Japanese-owned shopping centre’s management cemented the June 30 opening date and took the wraps off a closely guarded list of 186 businesses that have already signed
on to establish stores in the new Sothearos Boulevard complex.

French fashion designer Pierre Cardin and Italian label Valentino will open a joint store, while Spanish menswear designer Florentino and iconic US jeans maker Levi’s will also open retail outlets, according to the tenant list. French natural cosmetics maker L’occitaine and UK boutique hair dressing chain Toni&Guy will also be among the mall’s occupants.

More than three-quarters of all the mall’s tenants will be foreign-owned, including 49 stores from Japan, 21 from Europe and nine from the US, while 42 Cambodian-owned businesses including banks and clothing retailers will also
share 108,000 square metres of floor space.

Chris Hobden, commercial analyst for real estate research firm CBRE, said retail rental costs were on the rise in Phnom Penh, driven by the influx in recent years of foreign franchises and high-end chains, citing Costa Coffee, Swensen’s and Tous Les Jours as some of the most notable new players in the franchise market.

“There has been an increase in demand for luxury products and mid- to high-end brands in Phnom Penh. This change is being driven by a combination of positive GDP growth, an aspirational middle class and a young demographic, with an increasing disposable income,” he said.

Hobden added that the average rental rates across the capital’s existing shopping malls such as Sorya Shopping Centre, Sovanna Shopping Centre, City Mall and Ratana Plaza, range between $20 per square metre per month to $32.

“This is set to increase with the arrival of new, high-quality shopping centres over the coming 12 months,” he said.

Chang Bunleang, COO of Brown Café and Bakery, which will open its ninth outlet in AEON Mall come June 30, said the Japanese developer’s arrival, if successful, could pave the way for more mall developers from Europe and the US to enter the Cambodian market.

“I trust the quality of Japanese investments; it will bring know-how to Cambodian retail operators. I hope that Brown will be as successful in AEON as it is at all other outlets,” he said, refraining from disclosing how much his company would pay to lease a 230-square-metre plot.

Soichi Okazaki, president and CEO of AEON Mall, said Aeon had spent three years researching Cambodia before deciding to invest $205 million to build a mall here.

“I am happy that many companies decided to partner with us by putting up their shop,” Okazaki told the Post, adding that all the retail space had been leased out.

“Having a shopping mall [in Cambodia] is very fit for the market demand,” he added, citing the mall’s ambition to attract 10 million visitors per year, or more than 27,000 visitors per day.

Hiroshi Suzuki, CEO and chief economist at the Business Research Institute for Cambodia (BRIC), backed the AEON CEO and the CBRE analyst’s suggestion that a more prevalent middle-class could sustain a high-end retail market.

“This kind of large-scale shopping mall will benefit the consumption of commodities and services not only for the rich class, but also the so-called middle class,” Suzuki said.

AEON Group operates more than 138 malls across Japan, China and Vietnam. The firm’s latest consolidated financial statement shows profit rose more than 7.6 per cent from 2012 to 2013 to a total 59.9 billion yen ($585 million).

A new seven-screen cinema owned by Thai cinema chain Major Cineplex, an ice-skating rink, a bowling alley, fast food chains Burger King and KFC, and a karaoke venue will also be opening in the new mall.

http://www.phnompenhpost.com/business/aeon-tenants-target-cambodia%E2%80%99s-middle-class