Khmer Times’ Sok Chan sits down with Dawn Shu, the country manager for Hongkong Land, the company behind the recently inaugurated Exchange Square building in Phnom Penh.
For in depth analysis of Cambodian Business, visit Capital Cambodia
Ms Shu discusses this newest addition to Phnom Penh’s skyline, as well as the company’s plans for the Kingdom and the challenges and opportunities in the local property sector.
KT: Could you tell us more about Exchange Square?
Ms Shu: Exchange Square is the newest Grade-A commercial development in the city. It comprises 16 office floors and four floors of retail and lifestyle mall.
The building is our flagship development in Cambodia, catering to the middle class and the affluent, and providing high quality office and retail space, with high quality finishes and layout.
We soft opened in June 2017. In the retail mall, we have a few anchor tenants, like Hard Rock Café, which is the first and only Hard Rock Café outlet in Phnom Penh. We also have a Lucky Premium Supermarket, Legend Premium Cinema, Starbucks, Pandora, Levi’s, and Swatch, and a great food court. More will come soon.
Our occupancy rate now exceeds 85 percent, with most of our tenants being international companies, including Huawei, ICBC Bank, CIMB Bank, AIA as well as several Japanese firms. We are very glad our flagship building has been so well received.
KT: Can you give us more details on the building’s design?
Ms Shu: The design is very modern and very much in harmony with the local and urban environment, with a nice plaza and plenty of green space to help visitors enjoy themselves and relax.
We followed Hong Kong’s construction and design standards, which are some of the strictest in the world in terms of safety. This is very attractive for multinational corporations, who usually want to rent for at least 10 or 20 years.
We are certified by the Building Construction Authority (BCA) of Singapore as a Green Mark Gold Standard building, which means we are very energy efficient. For example, the design minimises sun exposure, which means we don’t have to rely so heavily on air conditioning for cooling the building. The building was design to be eco-friendly and to reduce energy consumption.
KT: What made Hongkong Land decide to invest in a world-class building in Cambodia?
Ms Shu: Cambodia is one of the fastest growing economies in the region. In 2011 we visited the country and decided to purchase land in the city’s business district, as well as a building of serviced apartments called Central Mansions. Our decision to invest here was based on our great optimism regarding the country’s economic outlook. We saw there was no good Grade-A commercial building in the country, yet demand for this type of property was high. After careful deliberation, we decided to be the first ones to build one.
KT: The building was officially launched in late May. What were some of the main highlights of the grand opening?
Ms Shu: The main highlights were the opening of our movie theater as well as the Hard Rock Café, Lucky Premium Mall, and Pandora. There will be many more events throughout the year, including art exhibitions, concerts and events for kids, so stay tuned!
KT: Tell us more about your tenants. Who has already taken space in the building? What kind of companies are you targeting?
Ms Shu: We actually have too many firms that want to lease office space at the building, but we want to make sure we are renting the space to the right companies, the ones that are a good fit for us. I would say we are not targeting any industry in particular. Rather, we are looking for tenants that operate lawfully. Right now, we have financial institutions, insurance companies, accounting firms, as well as trading firms.
KT: What are your plans for expansion in the local property market?
Ms Shu: So far, we have Exchange Square and Central Mansions. Before we purchase new land or property, we want to make sure our existing properties are being managed flawlessly and are operating at an optimal level. We always take a long term view of the market, so we continue to look for new lots that have good location and suit our needs, but won’t probably buy anything until we feel our existing properties are running smoothly.
KT: What’s demand like in the Kingdom for Grade-A buildings?
Ms Shu: We feel demand for Grade-A space if very strong, maybe because many villas, as well as Grade-B and C properties, don’t meet international safety standards. We are seeing a lot of interest on our building from multinational companies and we are very confident demand will continue to grow. We will continue to look for new opportunities to develop Grade-A commercial buildings in Cambodia.
KT: Are you finding a lot of competition in the Grade-A building segment in Cambodia?
Ms Shu: Yes and no. We see many new buildings being raised every year, and they are definitely getting better and better every time. However, for us, it is not just about quality standards. It is also about the creation of services, which makes our property management team a key element of our offer. They take care of the property and help tenants feel safe and comfortable in their offices. So, to answer your questions, yes, we do see a lot of competition, but no one is really quite matching us in terms of property management.
KT: What do you think has been Hongkong Land’s contribution to the local property sector?
Ms Shu: I think we brought a new level of quality to the country, and we will continue to do so because we are proud of our products and of what we do. We have great confidence in the local market and will continue to invest in it with high quality products.
KT: Cambodia will have a general election at the end of this month. How do you feel it will impact business activity in the real estate market?
Ms Shu: We remain confident in the Cambodian market. For us, personally, whether or not the business activity is disrupted because of the election is not a major concern, because, as I told you, we take a long term view of the market when it comes to investment. Any disruption as a result of the election will be short-lived, so it is not really a concern for us.