As the time for tenants to change office space comes closer as leases expire, new office spaces are opening around Phnom Penh with some seeing positive results while others struggle.
Four new office space buildings entered the Phnom Penh market in the first half of 2015 as the demand remained high, local real estate experts say.
While the office spaces near Monivong Blvd and Norodom Blvd seemed to show some potential, office space that opened away from main thoroughfares seemed to be inactive, said Van Chanthorn, director of Town City Real Estate.
The four new office space buildings that opened in the capital were Heng Asia building, along Mao Se Tung Blvd, Koh Sontepheap building on street 271, GT Tower building in front of Bak Tuk high school and an office space above the Phnom Penh International University.
“Grade B office space still remained the most popular since companies are interested in the area’s affordable prices,” said Chanthorn.
Phnom Penh’s Grade A office space costs about $20 to $35 per square meter, whereas Grade B office space costs about $12 to $18, and Grade C costs about $7 to $12, according to a study from the Town City Real Estate.
Sung Bunna, director of Bunna Realty Group, said both office space supply and demand remained stable because the buildings’ occupany rate ranges from 90 to 95 per cent. Since the supply and demand are balanced, there has not been an increase in rental prices, he explained.
“The [existing] office space demand still shows potential, and there is not a big number of new companies listed [to establish in Cambodia] this year,” he said, explaining that prices could jump soon as availability remains limited.
The demand for office space at the beginning of the year was low due to the annual cycle of rent agreements. However, tenants usually change their offices around September, thus many of the new office spaces had stable, competative prices when they entered the market, said Chrek Soknim, chief executive of Century21 Mekong.