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Phnom Penh property market resilient

Central Market in Phnom Penh, Cambodia.
Central Market in Phnom Penh, Cambodia. Hong Menea

A new report from global property giant CBRE says the property market in Phnom Penh “remains resilient”, with strong demand in the serviced apartment sector set to continue.

CBRE says the serviced apartment market is one of the strongest in Phnom Penh, and although a large number of units were launched in 2012, the sector grew in strength, with occupancy levels increasing.

The report says that 2013 is set to continue in the same way as in 2012, with the supply increasing “significantly” in BKK.

However it says there will be competition from buy-to-let owners of finished condominium projects looking to see a return on their investment. The company says with an increase in supply, rental rates are predicted to decrease slightly, especially in older buildings, which could be good news for renters.

Meanwhile the Phnom Penh office market is set to increase by 27 per cent in 2013, with the Vattanac Capital building accounting for 18 per cent of that increase in supply. CBRE said it is starting to see current occupiers of villa office space looking to relocate to purpose-built offices to improve their professional image and to maximise the efficiency of their rented space.

The retail market in Phnom Penh is one of the sectors with the highest demand, according to CBRE.

New large-scale retail space, such as the Aeon Mall, is still a number of years away from completing, and new supply in 2013 will be limited, pushing new entrants towards standalone retail outlets.

This means that rental rates for retail space in prime locations within well-managed buildings is likely to increase. Without an improvement in management, existing shopping centres are unlikely to see much demand, the company says.

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The condo sector will see a large amount of units launched back on to the market in 2013, as projects that sold extremely well off plan before 2008 are now completing.

Demand for condominiums is increasing as the city expands, and with land prices increasing the domestic market is likely to look towards condos.

Industrial property remains buoyant, with the risk of an impact from an economic slowdown in the US and EU, the two largest destinations of the Kingdom’s key garment and textile exports, not yet materialising, with garment exports rising almost 10 per cent in the first nine months of 2012.

Trade and investment relationships with Vietnam, South Korea and Japan are also strengthening, CBRE says, which bodes well for the future.

The company said it has noticed an increase in the number of Japanese expatriates coming into Cambodia in the last year, with an increasing number of Japanese companies entering Cambodia and opening up offices in Phnom Penh, such as the Bank of Tokyo, Mitsui and Itoshu.

To contact the reporter on this story: Rupert Winchester at rupert.winchester@phnompenhpost.com

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