Purpose-built office space may supplement multi-use buildings in Siem
Reap – but there are no high-rise developments on the horizon.
The typical combined office/living space is still in favour with cautious developers in Siem Reap.
Property adviser David Coleman says development in Siem Reap will take a much different course to Phnom Penh.
While an increasing number of businesses are settling in Siem Reap, don't look for high-rises in the city of low-rise temples.
The limitation on building height is just one of the factors that means office space development in Siem Reap is set on a markedly different course to Phnom Penh, said David Coleman, property adviser at Cambodia Angkor Real Estate.
"I don't think you'll get the construction of tower-block offices, the kind of thing you'd see in London or New York - or even in Phnom Penh - simply because of the constraint on height," Coleman told Prime Location.
"There's a limit on how high you can build here because of the Angkor protection site, so the buildings aren't visible from Angkor Wat. But I wouldn't be surprised if there is more of a demand for specifically designed office space here.
"There's so much interest, particularly from the travel industry and overseas firms looking to come here, that I think that demand for Western-style offices is likely to grow."
Coleman said the Siem Reap office style has been shaped by pragmatism. In the past, people converted residential houses into offices, or built shops with a living space attached.
Demand for western-style offices is likely to grow.
"Those three-storey shops-cum-houses are often used as office space for small businesses," he says. "That's probably due to demand in the past not being very high - people made good with what already existed."
But Coleman said that even though more businesses are settling in, the majority of new developments are still multi-use office/living space arrangements, a trend he credited to caution on the part of investors.
"You put up a property that could be used for a number of different things, and then you have a better chance of selling it or renting it."
Now that Siem Reap is more of an established city, Coleman said there will be a move toward developing grander, purpose-built office space, rather than hedging bets with dual residential/commercial designs. But although developing such buildings might be a smart long-term move, Coleman warned of risks in the immediate future.
"The price of land here is still astronomically high, so you need to be sure if you're going to build a purpose-built office that you're going to get a return on your investment. And at the moment, that's obviously riskier than it was 18 months ago.
"As a real estate company, we were doing far better business 18 months ago than we are doing now. But there's still interest in the real estate market of Siem Reap, and office space is part of that interest."
While the economic crisis might scare off many investors, Coleman said it could prove ultimately beneficial. He claims that the global slump will correct real estate prices that were monstrously inflated during Siem Reap's boom period.
"I think there needed to be a settling-out period, where business goes a bit quiet and more realistic prices are asked by landowners. It's better that business slows for a bit, then picks up again with more reasonable prices being asked, than prices continuing to rise but nothing moves."
Coleman said he is not worried about the long-term effects of the global financial shortfall, noting that the fundamental qualities of Siem Reap will remain unchanged.
"These things never last forever, and there was such interest in the real estate market in Siem Reap. Such an incredible interest in the prices and the kind of properties available, and that's bound to pick up again.
"I think there's a high availability of office space in Siem Reap. Anybody could come here and find office space, either purpose-built or converted from an existing building. There's plenty of scope for setting up here, and the construction companies are capable of building property to order.
"This is a pleasant, safe place to be, there are a lot of NGOs centred here, and it's an attractive town to move your business to."