As the nation’s economy powers ahead and an increasing number of Cambodians and foreigners open businesses in Phnom Penh, demand for office space in the capital is fueling growth in dedicated, high-grade office blocks.
The price of office space in the capital has roughly doubled during the past two years, says Vutha Oum, director of Angkor Khmer Real Estate, adding that prices are expected to continue climbing at a similar rate.
Pak Thyda, sales manager at the Cambodiana, says now is the first time the hotel’s 38 offices for lease in its basement are fully occupied.
With prime locations along Norodom, Sihanouk and Russian boulevards locked up, developers have set their sights on the city’s other main thoroughfares, Monivong and Kampuchea Krom.
Oum says a few years ago clients tended to complain about shoddy electricity and unsuitable building designs since converted homes, where most of the country’s businesses operate, lack the infrastructure a modern company requires.
Developers have responded with new buildings constructed specifically for offices, with elevators, wiring for all electronic services, vented air-conditioning and parking lots.
Pak Ra, development manager at Australian Cambodian Real Estate, says businesses in Phnom Penh today feel they need to be in modern high-rise structures to be easily identified, while first-rate infrastructure is necessary to keep up with international competitors.
Hak Vanneth, a cashier at World Bridges, says moving from a villa to the Hong Kong Center has given her company a more professional image and access to modern amenities.
Sung Bonna, head of the Bonna Realty Group, says office space is one of the most sought-after areas of the property market, largely because older buildings do not meet the requirements of modern business and there is a lag between the arrival of companies and NGOs and buildings designed to cater to them.
Still, the going rate is not expensive when compared with prices in other commercial centers in the region, Bonna says.
“Office space in Phnom Penh is about $7 to $15 per square meter [per month]. This is the average price, and we could say it’s cheap. If we look at what could be considered expensive, that would be about $15 to $30 per square meter,” he says.
Phnom Penh’s first wave of modern office buildings – The Hong Kong Center, the Phnom Penh Center and the International Office Center – fetch from 50-200 percent more in rental fees than most residential space serving business needs. (Additional reporting by Mom Kunthear)