New buildings such as Canadia Tower and Gold Tower 42 will add significant additional space on the market, says property firm, but demand still unclear
The appetite for new office space depends greatly on the quality and pricing."
PROPERTY services firm CB Richard Ellis (CBRE) Cambodia has predicted that office supply in Phnom Penh could reach as high as 200,000 square metres by 2013, almost double the current available space, if most of the office stock slated for development over that period is completed.
In its first report on the Phnom Penh real estate market made publicly available, the local office of the major US property consultancy says Phnom Penh’s office stock surpassed 100,000 square metres for the first time this year, with around 20,000 square metres of new office space hitting the market.
Most of that is in the 29-storey Canadia Tower, the Kingdom’s first skyscraper, which opened its doors to its anchor tenant, building owner Canadia Bank, last month.
CBRE Country Manager Daniel Parkes said the firm’s estimate accounted only for the portion of the tower to be set aside for office rentals, meaning that the six floors taken by Canadia Bank and others set aside for retail, hospitality and residential offerings were excluded.
How much of the tower will be set aside for office space has not been definitively determined, and negotiations with prospective tenants were ongoing, sources within the bank say.
Parkes said the newly opened headquarters of Cambodia Public Bank, or CampuBank, were also excluded, as it was built exclusively for the bank.
CBRE anticipated that up to 35,000 square metres will go on the market next year, 45,000 square metres in 2011 and a little under 20,000 square metres in 2012, based on projects in the pipeline.
“There are a number of office projects tabled for Phnom Penh, but if we assume a more realistic outlook that only those projects now started and under way come forward then the supply will be 76,021 square metres over the next 5 years,” Parkes said.
Among those are towers being built by Vattanac Bank and The Royal Group, both neighbouring Canadia Tower, Amco’s Phnom Penh Tower and a limited amount of office space in Gold Tower 42 and Posco E&C’s Star River residential development.
The report did not predict the extent of demand for new and existing facilities but said the ability of Canadia Tower to attract tenants would serve as a benchmark.
“The appetite for new office space depends greatly on the quality and pricing as to whether occupiers decide to relocate from existing office space, many of which are renovated villas or built to suit premises,” it says.
“Developers, occupiers and investors are looking to the project as a bellwether for office development in Phnom Penh, experts will view its success as a barometer for future trends.”
Parkes said the company was optimistic that demand for office space would grow in Phnom Penh over the next five years and beyond.
“Demand will continue to grow in the coming years from existing occupiers within the Phnom Penh market looking to upgrade their premises and business image and also from new entrants from abroad,” he said.