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CBRE: Market View, Cambodia

CBRE: Market View, Cambodia

Office Overview:

Existing Supply:

There is approximately 190,000 sqm of purpose built office accommodation in Phnom Penh, which can be divided into three main categories:

·        Business Centres

Business Centres include buildings such as PGCT, Delano Centre and Hong Kong Centre. Currently, rents range from USD 9 psqm to USD 17 psqm per month.

·        Modern Office towers

Building such as Canadia Tower and Phnom Penh Tower are the first high rise office buildings in the city. Rents range from USD 17 to USD 25 psqm.

·        Hotel Business Suites

Cambodiana, Himawari and Phnom Penh Hotel all offer office business suites. Companies such as Sony, Eriksson, Manulife and Thomson Reuters all occupy hotel business suites. Rents are usually between USD 12 to USD 22 psqm.

In addition to the above, there are buildings which from a historical lack of quality office supply have been renovates for the office needs. Rents are usually between USD 7 to USD 10 psqm, depend on location.

Villas are rarely conducive for office space mainly because it is very difficult to achieve a modern open-plan office. Therefore, there are some Companies or Embassies move to a modern office building.

Many tenants still occupy villas for their office needs and rents can be as low as USD7 psqm. However, research carried out by CBRE Cambodia shows that the cost is nearly double the payable rent

Future Supply

In the next 5 years, there is an estimated 91,000 sqm of new office space coming on stream. The principal buildings are as follows:

1.      Vattanac Capital – It will provide 35,000 sqm of office space to offering Grade A offices, luxury retail and world class serviced apartments. The whole development will be completed by the end of the 2012.

2.      Royal Tower – will be a 40 storey mixed use development which will have up to 25 storey of office space.

3.      Gold Tower 42 – when construction resumes, it is planned that 9 storey will be change to offices, approximately 18,000 sqm.

4.      Embassy site – Hongkong Land will shortly commence construction on a mixed use building likely to contain 12 floors of offices

Outlook

More demand from the service sectors will increase, CBRE predicted. So, the modern and good quality office space will needed as more and more international occupiers establish their business in Phnom Penh, and some are already entered the market. Therefore, when buildings such as Vattanac Capital, Royal Tower and Hongkong Lang’s development complete, it will provide occupiers with a choice of high quality buildings, and the appropriate rents.

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