Warehouse demand cools, prices steady
The manufacturing industry is facing a slowdown in demand for warehousing, but prices have remained relatively unchanged, real estate insiders have said.
Keller Williams (KW) Sen Sok regional operation principal Sam Soknoeun told The Post on Wednesday that demand for rental warehouse space has been declining since the beginning of the year, mostly as a result of Covid-19 and the ban on online gambling.
As countries around the world imposed travel and transport restrictions, the demand for stockpiling declined accordingly, he said.
Demand for warehouse space grew dramatically last year and rentals were driven mostly by Chinese foreign investors and a small number of locals.
Soknoeun said: “The Covid-19 outbreak has severely hampered the leasing market, but the decline now is only related to demand – prices have not changed.”
Lease agreements in the warehouse segment come in two types – land leases for construction of the facilities, and leases of existing buildings, he said.
In Phnom Penh and nearby provinces, monthly land rental prices for warehouse construction can range between $0.50 and $2.50 per sqm, with most lease agreements lasting between five and 10 years.
Soknoeun said improved international relations and trade with many countries around the world, especially China, gives the Kingdom an edge to woo more foreign investors after Covid-19 tapers off.
“I hope that the world will be able to control the disease soon, and then the demand for rental housing will rebound,” he said.
Cambodian Valuers and Estate Agents Association president Chrek Soknim said demand for warehouses has fallen off slightly, but it is only a modest dip because warehouse rentals have not been impacted as seriously as the service sector.
The service sector is down, but demand for storage is still there, he said.
“It doesn’t go down much, because renting a warehouse is always a long-term deal,” Soknim said, adding that warehouse rental prices have remained unchanged.
A warehouse located in a good location with a factory is around $8-$13 per sqm a month in the capital, while it can be as high as $10 and above in the downtown area, he said.
Noting that current demand for warehousing is low, he claimed that there will be many shortages in the future.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post last week that political stability, favourable investment conditions, a young and expanding workforce, solid infrastructure, and the escalating trade dispute between China and the US will allow the Kingdom to attract more foreign investors.
Demand for human resources and warehousing will be greater in the future, he said. “I am confident that Cambodia’s investment and exports in all sectors will continue to grow gradually in the future.”