Office space demand up slightly in Q4 2013

Office space demand up slightly in Q4 2013

Demand for office space in Phnom Penh in the fourth quarter of 2013 grew by five per cent over the previous quarter, according to research by local property services provider VTrust Property Company.

VTrust deputy director Chrek Soknim said that growth in Q4 of last year was roughly 10 to 15 per cent compared with the same period in 2012. Grade B office space was most popular, Soknim said.

“Grade B office space accounted for between 85 and 95 per cent of demand in the fourth quarter,” he said. “Its popularity is primarily due to the balance between affordability and minimal need for tenants to invest in decoration or renovation.”

VTrust’s research concluded that office space usage in Phnom Penh totalled 191,000 square metres by the end of 2013 and predicted that by the end of this year supply would reach 225,000 square metres.

Currently in the capital, Grade A office space is priced at $14 per square metre and higher, compared with $8-$14 per square metre for Grade B office space. Grade C office space is no more than $8 per square metre at present.

Phnom Penh Tower is experiencing growing office demand.
Phnom Penh Tower is experiencing growing office demand. Hong Menea

Key Real Estate general manager Sorn Seap told the Post that prices remained stable toward the end of last year, despite the slight upturn in demand. Most clients and prospective clients who approached his company were looking for office space in the range of $8 to $12 per square metre.

“Last year was a good time to start a business in Cambodia, as the Kingdom’s economy and the global economy were performing well,” Seap said. “The most important development coming up in the short term is the integration of the ASEAN Economic Community in 2015. At that time many companies from other ASEAN member states will come to invest in Cambodia, and naturally they will need offices.”

Phnom Penh Tower marketing manager Hong Youvoin said that demand for office space at the office centre on Monivong Boulevard increased gradually in the fourth quarter, primarily among existing clients in the building. Foreign investors were less inclined to invest during this period due to the political situation, he said.

Of the 20,000 total square metres of office space at Phnom Penh Tower, 1,000 square metres was unoccupied in the third quarter of 2013. In Q4, that number dropped to 600 square metres. At present, office space at Phnom Penh Tower is priced between $20 and $28 per square metre, with an additional surcharge of $4 per square metre for maintenance and management.

“I believe demand will increase because I have observed that the business of the companies in Phnom Penh Tower have tended to perform well, which suggests they will need to expand their office operations in the future,” he said.

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