Trade recovers fast, surpasses pre-Covid level in Cambodia
Trade recovers fast, surpasses pre-Covid level in Cambodia
With higher disposable income and a growing economy, wholesale and retail trade in Cambodia have recovered post-Covid. And not just recovered, but grown higher than 2019 levels.
For 2023, the amount of wholesale and retail trade in the country went up to 13,182 billion riels ($3.2 billion), up more than eight percent from 2020 when it had hit a low of 12,169 billion riels ($2.9 billion), as per government data presented by Professor Ky Sereyvath of the Royal Academy of Cambodia, recently at a seminar on the current economic situation in Cambodia.
2023’s number not only showed a recovery from Covid, but also higher growth (1.5 percent up) than the country experienced in 2019 – where retail and wholesale trade was at 12,989 billion riels ($3.18 billion).
One of the indicators of a more bustling and active retail space is the renting of commercial spaces by large retailers. By mid-year 2023, more than 39,000 sqm of new retail space was added, which is a 6 percent increase in total supply, said market participants.
More upcoming projects, such as community malls and retail podiums, are slated to see completion in 2024. CBRE Cambodia in its first quarter of 2024 market insights report – said that about 101,000 sq metres of new retail space is expected to come up in 2024. And an additional 116,000 sq metres of new retail space in 2025.
Another indicator that things are looking up for the wholesale and retail trade space is the loan growth in this sector. Wholesale trade loans grew 4.8 percent, while retail trade loans grew 22 percent in 2023, as per data with the National Bank of Cambodia (NBC). For retail trade loans this was higher growth than what the industry experienced in 2022 (18.6 percent loan growth).
As per a report by Yuanta Securities (Cambodia), in a year where Cambodia banks reported their slowest growth in two decades of 4.8 percent growth – lending to retail trade was the bright spot.
In its report, Yuanta Securities said, “Year-over-year loan growth was highest in retail trade, followed by mortgages at 13.4 percent, wholesale trade at 9.1 percent, real estate at 10.5 percent, and construction at 9.8 percent.”
Contrary to trends between 2017 and 2019, recently there has been a shift in interest from retailers to standalone high street locations from internal retail projects. This is because as visibility becomes more important to retailers, high-end brands have been moving to more up-market locations from community malls, retail podiums and prime shopping malls which could command a rent anywhere between $26-$33 per square metre per month.
CBRE Cambodia Research said there is a nine percent increase in commercial rentals in high-street. This compares to flat growth for shopping malls and a decline in rentals at community malls and other places.
