Phnom Penh Office Market Remains Robust in Q2

• 7 August 2018
• Property Focus
• 6209 Views

Office Supply in Exchange Square. Photo Credit: Exchange Square

Despite the decrease in total supply by 3.3 percent in Q2, the Phnom Penh office market remained robust with an overall occupancy rate of 87.7% – a 5% increase from Q1 – according to a report by CBRE Cambodia.

The decrease in supply was caused by the closures of aging stock in the Grade C sector as landlords sought to refurbish or redevelop older properties in order to remain competitive, according to CBRE. The demand for modern office space is being driven by the continued expansion of both local and foreign corporations.

Meanwhile, there is also new supply currently in the pipeline including Keystone, East Commercial Center and E.SUN Tower. All are set to be completed during the coming quarter, which will deliver circa 34,000sqm of new Grade B stock.

The same report also shows the quoting rents for Grade B offices in the Central Business District increased by 6% q-o-q, while Grade C rents saw a growth of 3.4% q-o-q. Meanwhile, the quoting rents for office space in non-CBD locations remained stable over the course of Q2 2018.

Regarding the office market in Phnom Penh, CBRE has witnessed increasing interest from both local and foreign investors into office projects.

There are 16 office projects planned or under construction as of Q2 2018. The combined projects are set to offer a total of circa 200,000sqm based on net lettable area by the end of 2021.

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