Sovanna Shopping Centre, one of the oldest shopping complexes in the Kingdom will temporarily suspend operations later this year to perform extensive renovations, the mall’s executive director confirmed this week.
A real estate expert said that the closure would have little impact on the property market in the area. However, retail sector insiders have said that the plan proves competition is rising among shopping centres in the capital.
Sovanna Shopping Centre’s Executive Director Chea Sokheak told Realestate.com.kh that the complex has faced stiff competition from newer capital shopping venues since it was opened in 2008.
Sokheak did not give any data about the financial performance of the mall. However, she did confirm that it has been impacted by competition from newer shopping venues in Phnom Penh, and that the refurbishment was aimed at boosting traffic.
“Stronger competition always affects the business whether [the competitors are] big or small … The location of Sovanna Shopping Centre is still a good place and investors are willing to put up funds to make it better.”
Concerning current tenants, Sokheak said the mall’s management company will compensate those with standing contracts. She added that many will be given the option to lease space at other shopping centres managed by her company.
“It will be a large-scale renovation so it could take at least one year.” she said.
She claimed that the building would continue to be a shopping centre, however, offices or other types of commercial space could be included in the next iteration.
Located in the Chamkarmon district’s Tumnup Teuk commune, Sovanna Shopping Centre spans around 50,000 square metres across five floors. The mall is currently owned by developer Overseas Cambodian Investment Corporation (OCIC). In addition to Sovanna, the company also owns Sorya Center Point in Daun Penh district and Ratana Plaza Market in Sen Sok district.
Sorya itself was given a major facelift in early 2016. After the $5-million renovation, it was renamed Sorya Center Point.
Cambodian Valuers and Estate Agents Association President Chrek Soknim said the renovation of Sovanna would have little to no impact on the surrounding property. The area, he said, is already heavily commercialised, and businesses surrounding the mall would go on operating as usual.
“The real impact is on the tenants in the mall. They face losing their business location and clients,” he said, adding that the renovation is necessary in order for the mall to attract visitors in an increasingly competitive market.
The closure comes on the heels of the opening of Aeon 2 Sen Sok City in the second quarter of last year. That shopping centre brought over 70,000 square metres of leasable retail space onto the market.
According to a report from Knight Frank Cambodia, cumulative supply of leasable retail space in Phnom Penh at that time was just over 250,000.
The same report also predicted that an additional 392,476 square metres of leasable space would come online over the next few years.
“With a significant incoming supply in the pipeline, rental rates over the medium to long term are likely to face downwards pressure,” the document said.