Interesting times for Phnom Penh office market

Interesting times for Phnom Penh office market

130124 16
Canadia Tower in central Phnom Penh. Photograph: Heng Chivoan/Phnom Penh Post

Tight market conditions, strong demand for office space and constrained levels of new supply are the principal reasons behind the rising occupancy costs in prime office markets across the globe.   

Out of the top five most expensive office markets in the world, the Asia Pacific region contains four: Hong Kong, Tokyo, Beijing and New Delhi. With Hong Kong’s inherent lack of office supply, prime rents remain robust at $171 per square metre per month (psqm/m).

Demand from global financial and manufacturing companies kept occupancy costs high in Tokyo, while in Beijing pharmaceutical companies continued to expand.

Worldwide, office demand stemmed from the automotive, high-tech and energy industries. The latter is evident in Cambodia, where drilling off the coast near Sihanoukville has helped to increase office demand. Thus, companies such as Total and Chevron are large office occupiers, and new Japanese oil exploration firms will also establish operations in Cambodia by the end of 2013.

The growing insurance industry, particularly life insurance, is also a key office demand driver in Phnom Penh. 

Cambodian Life, Manulife and Prudential jointly occupy more than 3,000 sqm of office space in Phnom Penh and will likely expand by the end of this year.

The top office buildings in Phnom Penh are seeking rents of between $21 and $28 psqm/m, and with the lack of high-quality office developments, rents are unlikely to decrease.  

In terms of new supply, Vattanac Capital will be ready for occupation this year. The building will be the first Grade A office development in the Kingdom.

The development recently won an award for the best commercial property in Southeast Asia, and its specifications match many office buildings in Hong Kong and Singapore. This is not only welcome news for occupiers, but also helps to elevate Cambodia’s standing among investors.  

Cambodia’s sound macro-economic fundamentals, the first Grade A office development in the country, and the continued expansion of multinational corporations will make 2013 an interesting year for the Phnom Penh office market.

 

MOST VIEWED

  • Cambodia’s image problem

    In opening remarks at a recent event, Secretary of State at the Ministry of Foreign Affairs and International Cooperation Luy David said information can be a double-edged sword. He told a European Institute of Asian Studies (EIAS) briefing seminar that the media has unfairly presented

  • PM Hun Sen says dangers averted

    Delivering a campaign speech from his home via Facebook Live on Thursday, caretaker Prime Minister Hun Sen said his Cambodian People’s Party (CPP) had carried the country through danger in its latest mandate. He was specifically referring to the threat of a “colour revolution”

  • Kingdom's trade deal with EU questioned before poll

    A European Union (EU) mission met with senior government officials at the Ministry of Interior on Tuesday as the 28-member bloc monitors an agreement under which Cambodian goods reach the crucial European market tariff-free. Some 10 commissioners are in the Kingdom as part of a seven-day

  • A new carrier takes off in capital

    Cambodia Airways, the latest passenger airline to enter the Kingdom, launched its first domestic flight on Tuesday. Flight KR801, carrying 145 passengers, left the Phnom Penh International Airport at 9:50am and landed in Siem Reap at 10:35am in an Airbus A319. Cambodia Airways marketing and branding