CBRE: Property Market Still Facing High Degree of Uncertainty Despite Vaccine Roll-Out

• 7 July 2021
• Local News
• 2633 Views

The real estate market in Cambodia remains under pressure and is still facing a high degree of uncertainty despite the very impressive vaccine roll-out by the government, with experts not expecting to see a recovery this year.

According to the CBRE Cambodia 2021 Mid-Year Review Webinar yesterday, all four main sectors of the property market are still seeing a downward trend.

For the condominium market, only 5 out of 17 projects expected in 2021 have been completed, while the completion forecast for 2021 also dropped from 10,825 units to only 7,909 units.

During H1 2021, quoting prices for condominiums in the high-end and mid-range market segments have fallen 6.2% and 7.1%, respectively. Correspondingly, over the same period rents have come down 2.7% and 0.7%.

Similarly, demand for serviced apartments also dropped significantly with rental rates dropping 5.2% and 6.7% respectively for grades A and B, compared to H2 2019.

The retail market has also witnessed significant struggles in H1, with occupancy dipping 4.6% over the six months, to 71.5% on average.

Likewise, the office market saw a 3.8% drop in occupancy rates, but surprisingly the rental rates are on an upward trend. A total of 117,017 sqm of office space is set to be completed this year.

Managing Director of CBRE Cambodia James Hodge said that despite the very impressive vaccine roll-out, the market continues to face a high degree of uncertainty.

“Disruption to construction supply chains, a reduced pool of construction labour, developer cash flow problems and general levels of uncertainty have led to delays for many projects, pushing new supply backwards in its completion timeline,” said Mr Hodge.

Senior Manager and Head of CBRE Cambodia’s Research and Consulting department Kinkesa Kim added that COVID-19 has exacerbated a pre-existing issue of oversupply, and the market is now in the process of adjusting to becoming more competitive.

“As a result of the current circumstances, we see a clear drive towards more cautious, well-planned projects that take account of the future needs of occupiers, and that gives us great cause for optimism when looking over the longer-term,” she added.

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