Phnom Penh office demand continues to expand

Phnom Penh office demand continues to expand

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The iCON Professional Building​. Photograph: Hong Menea/Phnom Penh Post

Office rental growth in Phnom Penh increased 10 to 15 per cent by the end of 2012, said an official of the Cambodian Valuers and Estate Agents Association, as the number of local and international companies have risen significantly.

Chrek Soknim, deputy director of VTrust property company, said that the renting of offices in Phnom Penh is increasing from year to year.

“Now the price of renting Grade B office, the one that has seen the most growth, is $8 to $12 per square metre and it is the most popular with guests from Asian countries, Grade A is on average $12 per square metre and is most popular with guests from Europe, and Grade C is on average $5 to $8 per square metre, and it is most popular with local companies and guests from and neighbouring countries,” he said.

The renting costs in 2012 are similar to 2011 but the supply of offices is smaller than the demand, and in 2013 he believes that demand will rise 10 to 15 per cent compared to 2012 while Cambodia per capita GDP is forecast to rise above $1,000 a year.

“Economic growth starts to increase step by step. For the next five years, I think, Asia’s economy will be climbing and our country will see this influence because Cambodia is central and in a good geographical position for various types of trading, so we will get advantage on other countries,” said Soknim.

Cheng Kheng, director of the CPL real estate company and president of the Cambodian Valuers and Estate Agents Association, said that the demand for renting offices is much more than the supply.

“Of course, I see that Phnom Penh Tower 22, its renting has increased 70 per cent and the De Castle Diamond that a renting a floor at is $12 per square metre is almost rented out,” he said, added that the De Castle Diamond is renting at $8 to $12 per square metre.

Tes Sophak, deputy director of the iCON Professional Building that covers 12,000 square metres on the banks of the  Bsssac river, renting has grown by 30 per cent in 2012 compared to 2011. This is because of Cambodia’s economic situation which is good for investors, especial Asian companies: only 5 per cent of his tenants are Khmer.

“I believe that in 2013 it will increased more because our guests are well prepared and they have pledged that they will contact their country’s investors to rent from our company. Now we have five Japanese companies,” he said.

The tenancy levels of Hyundai Amco’s Phnom Penh Tower 22 in Phnom Penh that covers 20,000 square metres has risen to 75 per cent at the end of 2012, and is expected to top 85 per cent in 2013.

The growth of Grade A offices is lower then 5 per cent of our expectation, said Hang Yuven, marketing manager of Phnom Penh Tower 22. “Renting rates are low due to our country’s diplomatic relations with other countries not being very fruitful. They come to Cambodia only to look at the market but I hope that first quarter in 2013 will be the same as 2012,” he said.

“We have customers from Japan, Vietnam, China, South Korea, and Canada, as well as diplomats, real estate companies, banks, auditors, airline companies, factories, and civil groups to rent our offices. Our offices cost on average from $19 to $22 per square metre,” said Yuven.

Dith Channa, General Manager of VMC Real Estate Cambodia, offices rentals have grown 15 to 20 per cent compared to 2011.

“Foreign investors are looking more and more at construction investment so demand of offices has increased. Demand of Grade A is under 5 per cent but B and C are 10 to 20 per cent. I think that renting offices will double in 2013,” said Channa.

To contact the reporter on this story: Seun Son at [email protected]

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