The rise of millennials and implications for Phnom Penh’s real estate sector
The rise of millennials and implications for Phnom Penh’s real estate sector
Phnom Penh is currently preparing to host The World Economic Forum on ASEAN 2017. It is the first time Cambodia will have hosted the group, which is made up of some of the world’s most influential leaders from the world of politics and business.
During the three days of talks scheduled for 10th – 12th May, delegates will focus on the topics of youth, technology and growth. As thoughts turn to leveraging the benefits of a young demographic, CBRE Cambodia considers what impact millennials will have on Phnom Penh’s real estate in the years ahead.
Typically defined as those born between the early 1980s and early 2000s, millennials constitute around 40 percent of Cambodia’s population. This aspirational demographic are an increasingly integral part of the country’s workforce, and will be a significant driver of future growth and prosperity. However, millennials are sometimes perceived to have an outlook which is at variance with that of their parents, and this fresh viewpoint presents opportunities and challenges to those who need to appropriately target their business strategies to take account of this increasingly important demographic.
CBRE’s 2016 report ‘Asia Pacific Millennials: Shaping the Future of Real Estate’ sheds light on millennials thinking around the themes of work, live and play. We see many of the trends observed at a regional level as being applicable to Phnom Penh’s millennials, especially in emerging middle-class spending patterns, business location decisions, and the popularity of entertainment and retail experiences; all of which give rise to implications for the future of the capital’s real estate.
Of the 5,000 millenials from APAC surveyed, CBRE found that APAC millennials spend one-third of their income on leisure experiences, see shopping as a social activity to share with friends and spend an average of 9.7 days per month dining out and watching live entertainment. Retailers and developers in Phnom Penh should be encouraged by these trends, but also be mindful of creating shopping and entertainment environments that engage consumers and contribute to a sense of place.
The choices of millennials have implications for the housing market. While for many, the ultimate goal is home-ownership, spending and saving patterns dictate that most will live with their parents for longer than previous generations, and evidence suggests that 62 percent of APAC millennials not living with parents rent their home. Cultural factors and market dynamics in Cambodia go a long way to support the proliferation of these regional trends in the Kingdom. Ultimately, this should be encouraging to real estate investors and developers in Phnom Penh. While they may not be able to benefit hugely from this demographic in the short-term, millennials offer a strong source of potential growth for the future.
In addition, the reach of millennial’s outlook extends to businesses occupying offices. When looking for a job, millennials give significant importance to commuting time and the office’s location, as well as the quality of the office environment and ability to enjoy flexible working practices. Phnom Penh’s leading businesses should be mindful of the desires of millennials to occupy a working environment that offers more than just a desk and a chair. Top employees will become increasingly conscious of their prospective employer’s policies in this regard, making a company’s location and workplace strategy decisions a critical part of attracting and retaining the best talent.
