When Hon Mengheang moved to Phnom Penh as a teenager in the late 1990s, Parkway Square Shopping Center was the hub of a booming social scene.
“I used to enjoy the building—like the concerts, swimming pool, and golfing,” Mr. Mengheang remembers.
These days, Mr. Mengheang works in the building he once visited for fun, but the fun is long gone. As a property manager with VTrust Property, which manages the mall, he presides over what is now mostly office space decorated with potted plastic tulips.
Parkway’s shops—which once stretched five stories up—no longer extend past the ground floor. The mall’s bowling alley, driving range and karaoke parlor are all gone, traded in for office space.
Gone, too, are most of the customers, shopkeepers say.
“Before, I could not have breakfast until afternoon” because of brisk sales, said Hai Lysophanha, who has sold women’s apparel at Galaxy Fashion for the past decade. “But now, for almost two or three days, there’s no customers coming.
Ms. Lysophanha’s remaining customers tend to be 30 or older—holdouts from Parkway’s glory days. “They always came here, because this kind of mall is for the older people…. Some of our customers ask, ‘Do you have a branch at Aeon?’ Because they don’t want to come here.”
Like many of the city’s former shopping spaces, Parkway has been largely forgotten by fickle Phnom Penh shoppers. After Parkway, successive malls—Sorya Shopping Center, Paragon Cambodia, Sovanna Shopping Center, City Mall—drew headlines and crowds before quietly fading out of the limelight, shedding customers in the process.
With Phnom Penh’s retail space slated to double by 2018 with the arrival of a second Aeon Mall, Parkson’s Phnom Penh City Center, and luxury condominium developments with retail components like Oxley’s “The Bridge,” shopkeepers at the older establishments aren’t sure how they’ll keep up.
When it debuted in 1998, Parkway billed itself as the nation’s first “shopping mall and entertainment center.”
Dara Veung, a local entrepreneur, remembers an era when bowling at Parkway was a rite of passage for Phnom Penh high schoolers. “A lot of students went there,” he said. “Even I went there, and I was one of the nerdiest students.”
In December 2001, the mall made headlines after Prime Minister Hun Sen’s nephew, Hun Chea, was one of seven suspects arrested for a drunken shooting spree inside of the Hollywood Club karaoke room. Mr. Chea was released from prison several months later to attend a wedding.
Even after VTrust took over the building in 2011 and converted all but the ground floor to offices, the Cambodian Bowling Association continued to practice in Parkway’s bowling alley, but finally even that closed in 2013. Ultimately, the team, like many Parkway shoppers, migrated to Aeon, the $200-million Japanese-backed mall that opened last year.
Likewise, when Sorya Shopping Center debuted in 2002, many Cambodians reveled in its six floors of air-conditioned modernity, with droves of people visiting the building just to ride up and down the escalators.
Gawkers are a scarcer sight these days at Sorya, said Hea Kivan, who sells Snow White and Mickey Mouse backpacks on the mall’s second floor. Mr. Kivan said sales were initially strong when he opened his shop, Roman, five years ago.
“I thought it would just keep going up,” he said, relaxing on a red-and-black vinyl lawn chair in front of his shop. Instead, sales have dropped by 50 percent from their peak—a trend he blames on crowds migrating to Aeon.
But Mr. Kivan, who still serves between 10 and 20 customers a day, has no plans to leave. “It’s not easy to change, so we’ll just keep doing this,” he said, before returning to playing a game on his mobile phone.
The mall’s food court still drew tables of students and businessmen on their lunch break on a recent Wednesday afternoon. Groups of tourists and locals roamed the stalls, sizing up football jerseys and Angkor-themed T-shirts.
Unlike at Sorya, where shuttered storefronts are a rare sight, Paragon Cambodia is a veritable ghost town. The $6-million mall opened in 2007 on Street 214 with plans to target Phnom Penh’s burgeoning middle and upper classes.
Eight years later, sales clerk Lidah Wen sells three or four pieces of women’s clothing a day at a boutique called Kenn.
“I’m so bored every day,” she said on a recent afternoon.
Kenn, with its stained carpets and tidy rows of dresses, is one of a few survivors on the mall’s first floor, where a vacant karaoke establishment and rows of shuttered shops had been repurposed as a makeshift playground by a few children on a recent visit. Only the ground floor supermarket was generating a steady trickle of traffic.
“Three to four years ago, there were crowds here,” said Ms. Wen. “But now, as you can see, it’s quiet. No one comes here anymore.”
Soey Pech is the rare customer at Paragon there to buy clothes. “It’s my favorite shop,” the 23-year-old said, inspecting Love Fashion’s white blouses and black skirts. “I’ve been
coming here for five years. Before, there was many customers, but now, [only] a little bit.”
No Phnom Penh shopping center seems immune to the risk of failing to meet the promises of ribbon-cutting rhetoric.
The 39-story, $170 million Vattanac Capital building has struggled to draw a regular audience to its lower-level shopping spaces, where Hugo Boss pocket squares and $22 Earl Grey chocolate bars from TWG Tea are on offer.
Even Aeon Mall, dense with teenagers and families most weekends, has seen the departure of a number of tenants, who cited disappointing foot traffic, disturbances from construction and overly thrifty patrons.
Sung Bonna, chairman of Bonna Realty group, estimates that a total of 27 new projects, including the new Aeon mall, Parkson’s mega-project on Russian Boulevard, the six-floor Malaysian-backed Lion Mall, to be build near the airport, and a new seven-story mall at the Olympia City development near Olympic Stadium, will double the city’s retail space in the span of just a few years, to 900,000 square meters.
“The under-construction supply is enough for Phnom Penh,” he said. “The occupancy rate is high—90 percent—for existing retail. But we’ll wait and see for updating construction.”
But a report by Bonna Realty this year also shows that retail rental prices have already dropped an average of 20 percent from 2014 to 2015 due to a “large amount of supply as well as the price competition between new comer and existing retail on the market.”
Mr. Bonna says that new mall projects in Cambodia are often competing for the business of a relatively small group of wealthy customers. “The number of high-end people is limited,” he said. “If the investors do more high-end [projects], they cannot rent the space, because locals cannot afford to buy those products.”
Mr. Bonna said that the effect of the new malls on the existing shopping centers will depend partially on their distance from the competition. But “when the new and modern ones are done, the old ones are going to slow down and be more quiet,” he warned.
Future projects, Mr. Bonna said, should focus on upgrading local markets, and should target Cambodia’s middle class.
“We need medium-quality and priced shops for local people,” he said.
Back at Paragon, Ms. Wen scanned the halls for customers. She said that the owner of the shop where she works is having trouble selling enough merchandise to pay rent and wages.
“It seems to be becoming Parkway,” she said.
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Correction: A previous version of this article incorrectly stated that the Vattanac Capital building cost $170 billion. It cost $170 million.