A 20-story retail and office building development opposite Phnom Penh’s Freedom Park by U.K.-based Hongkong Land Ltd. (HKL) is being built without pre-existing rental agreements, the company’s general manager, Daniel Parkes, said Thursday.
Land Management Minister Im Chhun Lim last Friday hosted the groundbreaking of the $100-million Landmark project, which lies between streets 102 and 106 and will feature four floors of retail space and 16 floors of office space.
Mr. Parkes said Thursday that, unlike the defunct real estate development firm that the company acquired its land from in April 2011, HKL is not constructing the project based on an agreement with a department store chain.
“It’s being speculatively built, but we’re beginning to talk to a number of occupiers who might be interested in going in,” he said. “We’re three years away from opening so it’s difficult to get people to commit at such an early stage.”
The building is the realization of a development first planned for the site in 2008 by now defunct Cayman Islands-based real estate firm JSM Capital Indochina Ltd., which sold its assets in Phnom Penh to HKL in April 2011.
The site had been touted by JSM in 2009 as the future home of Malaysian department store chain Parkson, which had pre-rented 80 percent of the 30,000 square meters of retail space JSM had planned to construct before the company offloaded the inner-city site to HKL.
Mr. Parkes said that he was confident HKL could fill the floor space when the building is complete in 2016, as HKL was well-regarded for building, owning and managing its real estate.
“It’s quite unique, so it means we manage to attract some of the best office occupiers,” he said.
“[In Hong Kong], we’ve got people like Dior, Bulgari, Gucci and Ralph Lauren, and Armani has four whole floors of one of our buildings,” he added. “So we’ve got very good relations with all of those brands.”
HKL is owned by British conglomerate Jardine Matheson, which amassed $60.45 billion in revenue in 2012 and purchased a 12.25 percent stake in Acleda Bank in February 2010.
HKL also acquired a set of luxury serviced apartments on Street 102, formerly known as Colonial Mansions in the 2011 deal with JSM—which it developed and re-opened earlier this year as Central Mansions—and a 1,625 square meter plot of land on Sisowath Quay between Wat Ounalom and the Tonle Sap River.
Ministry of Land Management spokesman Beng Hong Socheat Khemro earlier this week suggested that the new Landmark project—which is near the Vattanac and Canadia towers—could be the first of many office and retail construction projects to be opened in Phnom Penh in the next few years.
“I believe that we will see more buildings constructed if we continue to have political stability,” he said, adding that approved capital investment in major construction projects in the country had reached nearly $2 billion in the first six months of the year.
Mr. Parkes said Thursday that the firm had been in “constant communication” with the adjacent U.S. Embassy over security concerns related to the development and said that HKL would have no problem with opposition demonstrations occurring in the nearby Freedom Park once the project is complete.
“I don’t think freedom and freedom of expression is something we are uncomfortable with. In a way we are quite privileged to have it right in front of us,” he said.
