Demand for office space in Phnom Penh has increased during the first half of 2018, particularly for Grade B and C properties, while rental prices have experienced few changes since last year, insiders say.
Chrek Soknim, CEO of Century 21 Mekong, said Grade B and C office space are in highest demand due to its affordability, while demand for Grade A space has remained stable compared to last year.
During the first half of the year, renting Grade A space cost between $15 to $30 per square metre, Grade B ranged from $8 to $15 sqm, and Grade C started at $8 sqm, according to Mr Soknim.
“Prices have experienced little change because rental contracts are usually long term,” Mr Soknim said.
He said there is likely an oversupply of Grade A office space because a significant number of large office buildings have entered the market recently. “I think it will be ok, however, because a lot of big companies are now coming into Cambodia looking for high-end office space,” he said.
Lim Sokhadavin, sales manager at Furi Real Estate – a company that owns Grade A space inside The Peak – said demand is high for office space inside high-rise buildings because many of the international firms now entering the country are looking for quality space in the centre of the city.
“High-rise buildings are attracting more and more tenants. Tall buildings are mushrooming all over the city,” Ms Sokhadavin said.
“We decided to invest in Grade A office space because we noticed a lack of high-quality office space in the city. We will continue to invest in this type of property to feed future demand,” she added.
During the second quarter of the year, total supply of office space decreased by 3.3 percent compared to the previous quarter, whilst the overall occupancy rate reached a new peak of 87.7 percent, up five percentages points from 82.7 percent in the first quarter, according to CBRE Cambodia.