Positive economic outlook to boost Phnom Penh premium office supply
Positive economic outlook to boost Phnom Penh premium office supply
The estimated 7 percent growth of Cambodia’s economy is expected to encourage an increase in Phnom Penh office space supply through 2013, industry insiders told local media this week.
Although the global economy’s fate remains in the balance, the Kingdom has continued to experience annual GDP growth, which rose 6.2 percent in 2012, in recent years, according to the Economic Institute of Cambodia. However, the supply of office space, particularly at the higher-end of the market, lacked somewhat in the past 12 months.
“In 2012, no Grade-A or Grade-B building was completed, but several projects were started or continued, CBRE country manager David George told The Phnom Penh Post. “The future Vattanac Tower will be the first building on the Grade-A market, with 285,000 sq m.”
Vattanac Capital Tower, winner of Best Commercial Development at last year’s South East Asia Property Awards, is due for completion by the close of H1 2013 and will become Phnom Penh’s tallest building.
The 39-storey building will join the ranks of Phnom Penh Tower and OCIC (Canadia) Tower, completed in 2011 and 2009 respectively, as the city’s only premium office space.
Private villas continue to dominate the office space market, however, due to the high supply and low costs, which are currently estimated at about US$5 to US$10 per sq m, National Valuers Association of Cambodia figures show. Meanwhile, Grade-A tenants are expected to pay in the region of US$35 to US$70 per sq m.
“The Majority of the market is still the Grade-C standard office, with a 57 percent share of the current supply,” George said, adding that the playing field will be leveled slightly by the emergence of additional high-end options in 2013. “This increase is not driven by the government though, but by developers.”
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