PRICES for Phnom Penh’s office space have fallen by as much as 25 percent in the third quarter compared to the same period last year, as some building owners say they are having difficulty reeling in tenants despite decreasing rates.
Top-quality “Grade A” office space is averaging between US$20 to $30 per square metre, down from $25 to $35 a square metre last year, according to a report released yesterday by the National Valuers Association of Cambodia. Keuk Narin, secretary of the NVA, said prices for office space had been on the decline all year, with most buildings offering space some 10 to 25 percent cheaper at the end of September from the same time last year.
The supply and demand balance was highlighted as a factor. Seng Sopheak, manager of property valuation at Cambodia Property Limited, said yesterday that supply had risen by 20 percent in Phnom Penh during the first nine months of the year and was set to rise further. But added that he believed prices had stabilised in the third quarter.
Some landlords yesterday expressed pessimism about the state of the office rental market. Bayon Building Centre general manager Chheang Meng said he had nearly halved his asking price to $10 per square metre. “I’m at my last price – but still nobody is interested,” he said.
The NVA report showed that although some big buildings stood well below full occupancy, others were doing well.
Canadia Tower claimed 70 percent occupancy in October, while the Attwood Business Centre was 65 percent full.
However, the Delano Business Center was 94 percent full with a starting price of $10.50 a square metre.
David Simister, Chairman of CB Richard Ellis Indochina, said that while there were noticeable vacancies in some buildings, foreign companies were increasingly coming to the Kingdom, which would push up demand.