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Office demand expected to pick up

Phnom Penh Tower and Canadia Bank Tower.
Phnom Penh Tower and Canadia Bank Tower. PHOTO SUPPLIED

Office demand expected to pick up

Office space demand in Cambodia remained stable in the third quarter of this year, the lack of growth reflecting market concerns regarding post-election political instability, property experts say.

Hang Yuvan, sales manager at Phnom Penh Tower, said that office space demand should improve by the end of this year.

“We expect that the rental office demand will grow early next year because fewer people will be concerned about the political situation here in Cambodia,” Yuvan said. “The office rental market will be more competitive next year, and we will no longer be concerned about demand increasing.”

Office space in Phnom Penh Tower is currently renting for $18 to $22 per square metre, with an additional $4 per square metre for management and security.

More than 100 international companies have established offices in Phnom Penh Tower, along with a few local companies.

Thab Rithy, general manager of rental offices at Canadia Bank Tower, said that in the third quarter office rents increased only slightly due to worries about domestic politics, but that increased business activity in Cambodia by Chinese and Malaysian companies should bolster demand.

Rithy said Regus Business Centre has rented space in the Canadia Bank Tower where it will offer services such as virtual offices and serviced offices to its corporate clients.

Office space at the tower is currently renting for $25 per square metre plus $5 per square metre for management and security. Thirty companies are currently occupying more than 80 per cent of the building space, but there is still high availability from floors 16 through 27 for businesses looking to rent.

“At the end of 2013 or early of 2014 office rental demand will increase again now that a lot of new companies have come to study the market and will lease from us,” said Chrek Soknim, deputy director of VTrust Group.

Buildings managed by VTrust Group are grade B rental offices with monthly rental rates running from $8 to $12 per square metre, according to Soknim. Grade B office space is popular during uncertain economic times, he said, adding that his buildings had 98 per cent occupancy.

In the coming two to three years grade A office space will be in high demand and clients currently renting grade B offices will likely upgrade to grade A, Soknim said, explaining that new entrants to Phnom Penh were likely to fill in the newly vacated grade B offices.

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