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Given the success of Western-style cafes that can be found on every street corner in Bandung 1, local and foreign business owners seem to be jumping on the bandwagon.
However, local real estate experts say that despite the market’s growth, not all air-conditioned, latte-serving establishments will survive in the area.
He said buyers and businessmen saw an opportunity to open Western-style cafes in areas where similar businesses were booming.
“They’re not just selling coffee, they’re selling the environment and prestige, with air conditioning, comfortable seating and high-speed internet.”
However, Nalin said the overpopulation of nearly identical cafes on 51st and 57th Streets, as well as on almost every side street, means that not all of these establishments can continue to operate as they do now if they want to survive.
“There’s a lot of competition in the area right now … some of them are going to have to merge or move out or they’re not going to survive.”
He said while the region’s growth showed no signs of slowing and was well-positioned in terms of location, infrastructure and security, businesses needed to consider competition.
“That’s a good thing, but investors will see the opportunity and they have to be careful…coffee drinkers will make the decision.”
Nguon Chhay Leang, assistant business development manager of Cambodia Real Estate Co., Ltd., said the cafe owners overestimated the capacity of BKK1 and the consequences would soon be felt.
“I think coffee shops are oversupplied,” he said.
In order to be profitable, many businesses need to move to a different location, such as the Russian Market area or a development community on the outskirts of Phnom Penh.
“BKK1 is oversupplied, but this should spread to other areas. I think it will spread; it can’t just develop in one place. If it only develops in one place, we will start to have traffic problems and congestion.”
The Blue Pumpkin, a well-known Cambodian ice cream shop and cafe, opened a new branch at BKK1 two weeks ago.
A Blue Pumpkin spokeswoman said they opened a store on 57th Street because it’s the “new upscale area.”
Blue Pumpkin has been planning to move to the area for the past six months and is pleased with the progress so far.
The spokesman said about half of the customers were locals and half were tourists or expats.
She said Blue Pumpkin isn’t worried about a string of cafes opening nearby.
“This is a growing Cambodian brand.”
While it’s difficult to speculate, she said she believed the bigger, better-known brands would survive, but it was unlikely that all of BKK1’s cafes would continue to thrive.
Source: http://www.phnompenhpost.com/2013022161519/Real-Estate/cafe-society-competition-hots-up.html
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