The serviced apartment market has continued to grow during the first quarter of 2013, “with demand increasing concurrent with Cambodia and especially Phnom Penh’s strong commercial and economic growth,” according to a new report from international property firm CBRE.
The report says that the serviced apartment market is still “heavily driven by the number of foreign nationals residing in Phnom Penh, an ever-increasing and diverse range of people. The market has further matured and developed with the addition of new high-quality serviced apartment complexes which have entered the market and achieved high occupancy rates within a short timeframe.”
The company says “overall the demand for serviced apartments in Phnom Penh remains high, and with strong economic growth in Cambodia predicted for the rest of 2013, further foreign investment is likely to continue to drive the growth of the market.”
CBRE’s report notes that Phnom Penh currently has more than 15 fully serviced Grade A apartment buildings, offering a wide range of high quality accommodation, with good facilities and amenities.
One and two bedroom apartments continue to dominate the lion’s share of the total supply over that of larger suites, with one and two bedrooms providing 76 per cent of the total supply. In real terms, CBRE says the total supply of Grade A & B serviced apartments is now in excess of 85,000 square metres.
CBRE identifies a total of 18 apartment developments currently under construction within key residential areas of Phnom Penh that will continue to provide additional supply for a market where demand outstrips supply. Although a number of residential high-rise projects are currently under construction in Makara 7, Daun Penh, Bassac and Chamkamorn respectively, “it is unlikely that all of these projects will be serviced to international standards, thus expanding the provision of the market as a whole.”
Foreign nationals will continue to boost demand for serviced apartments in Phnom Penh, and with levels continuing to increase, CBRE says “demand will remain strong and absorb the new supply allowing rents to remain stable.”
The company points out that demand for three-bedroom accommodation is noteworthy “with supply being scarce.” A total of 30 three-bed units have been introduced so far in 2013, of which 25 per cent occupancy has already been achieved. The company says that “considering the higher rents and longer rents terms on these units, this demonstrate healthy demand.”
Rents in the serviced apartment market “will be liable to small fluctuations in 2013 as competitors react to the introduction of new supply and increased competition between the accommodation, services and facility on offer, including more commonly that of swimming pools.”