Rental prices for residential units in the capital decreased slightly through 2011 since recovering in mid-2010, due to an increasing supply of new apartments, industry insiders told the Post this week.
Prices for Phnom Penh grade-A, B and C residential units fell about 6 per cent last year, compared to 2010, Asia Real Estate Cambodia statistics show.
“I think it’s been difficult [for companies] to increase prices recently because of the rise in the number of available apartments,” said ARC Vice President Keuk Narin. “If the rental prices are increased, customers will start looking elsewhere for a place to live.”
Prices are expected to remain stable through 2012, however, the listing of foreign companies on the Kingdom’s infant stock exchange will lead to price increases, he added.
“The number of new companies entering the country will increase and their staff will need rented accommodation.”
The capital’s property market is set to welcome an additional 20 apartment projects in the coming years, of which nine have been given the green light. These approved developments will boost the condominium market, providing an extra 290 units, said Keuk Narin.
He added that ARC, which currently has 2,093 units of all grades for rent in the capital, experienced marginal price drops through 2010.
Average monthly rental prices for grade-A residential units decreased by more than 3 per cent year-on-year in 2011, while B-grade prices experienced a 11 per cent decline in the same period. Grade-C property rentals in Phnom Penh fetched an average of $479 per month, remaining unchanged from the previous year, according to the statistics.
The report also stated that approximately 85 per cent of the cities apartments are rented by foreign nationals, however, Keuk Narin said he expects the number of Cambodian nationals renting condos to increase.
“The number of Cambodian people renting apartments is growing. If we look back to 2010 local occupancy stood at 5 per cent, whereas it’s now 15 per cent.”
The average occupancy rate for grade-A apartments increased 4 per cent in 2011, compared to the previous year, hitting 90 per cent, while B-grade units rates rose 2 per cent to 87 per cent, in the same period. Grade-C apartments experienced the largest increase, reaching 86 per cent last year, a 7 per cent growth from 2010, the report showed.
Private landlords said that city apartments remain popular, but while demand continues to grow, they are still hesitant about putting prices up.
“My apartment block currently has a 100 per cent occupancy rate, which is better than last year,” said Uk Sophen, manager of Ta Prum Apartment in Daun Penh said. “However, we plan to stick with the same rental rates as last year because there are now many apartment complexes being constructed in the city and we are afraid of losing our clients.”
Monthly rentals at the apartment block start from $550 for a one-bedroom unit, while a two-bedroom condo can fetch as much as $900, he added.
“Our clients primarily hail from China, Europe and India, while 10 per cent are Cambodian nationals.”
According to Cheng Kheng, managing director of Cambodia Property Limited Co, which owns 93 apartments and more than 500 villas, the growing number of foreign nationals renting property in Phnom Penh is set to increase in the next few years, as the Kingdom’s economy continues its recovery.
“Many foreign companies from Vietnam, Singapore and China are returning the country to invest in key sectors, such as the agro-industry and banking sector,” he said.
Cheng Kheng added that he expects the returning investors to contribute towards rental price increases, but not until 2013.