The demand for corporate space in Phnom Penh is livening up with the entrance of up to five office buildings into the market by the end of 2016, compared with the same period last year.
These office buildings, across all grades A, B and C are attracting an increasing number of international businesses as tenants, including small and medium-sized enterprises (SMEs).
According to James Padden, surveyor at CBRE Cambodia, “We are noticing a higher volume of executives coming to the market and undertaking serious analysis; particularly now from within ASEAN.”
While “office stock remained reasonably stable in 2015, 2016 will see some notable completions including Exchange Square, adding 18,000 square metres of grade A stock, as well as Maybank Tower [completed earlier this year] and Raintree adding quality office space to the market”, he said.
Padden also noted that there are several small to mid-sized office towers that will complete this year, bringing total new supply for the year to around 60,000 square metres, equivalent to a 25 per cent increase in total supply.
As supply reaches a substantial amount, demand is not so far off the scale as certain internationally renowned companies look to gain a foothold in the Kingdom, and SMEs start to set up shop in proper office buildings.
The upcoming Exchange Square development spearheaded by Hongkong Land announced their key tenants last month.
The developer revealed some of its more prominent tenants to be financial institutions such as the World Bank, International Finance Corporation and CIMB Bank, while Guardian pharmacy, Yves Rocher, and Starbucks make up its retail leases.
David Tibbott, country manager of Hongkong Land, expressed confidence in the building’s ability to “continue to attract tenants as evident through the team’s pre-leasing successes”, noting that “Cambodia’s economy is developing rapidly and there is an increasing demand for office and retail spaces for new-to-market companies as well as current occupiers who are looking to expand and or upgrade.”
Within the same spectrum of office buildings, local developer Urbanland’s office project, Raintree, is set to come on stream within the next few months. The company is unable to release the names of their tenants before the official launch of the building, situated within the central business district at Preah Ang Duong.
Managing director of Raintree, Zoë Ng, told Post Property, “We have a mix of creative industries including design, media, marketing but also financial and professional services – natural given our location in the CBD.”
“We will also house a non-profit that we are supporting in line with our community values and goals to support SMEs and social enterprises. Tenants vary in terms of size and are a mix of local and regional, so [there is] quite a diverse set of organisations,” she added.
CBRE’s Padden concluded: “A range of industries are now realising that now is the time to enter Cambodia, and many sectors look to become more competitive as new players enter the [office building] market.”