Warehouse rental market stable on-year, set for year-end boost
Warehouse rental market stable on-year, set for year-end boost
Warehouse rental demand and prices have remained similar at similar levels of those in the year-ago period as Covid-19 vaccination campaigns in Cambodia and around the world set a positive tone for the market, according to industry experts.
Amatak Property Service Co Ltd CEO Tang Hour told The Post on February 24 that warehouse rental demand is holding strong, with the instalments predominantly used for commodity storage and running businesses such as restaurants and car dealerships for the most part.
“Even though the market continues to breeze through, some warehouse owners have taken to offering rent discounts for the first few years” of occupancy, she said.
Hour chalked up the pandemic’s limited shock to the market – compared to the condominium and apartment segments – to its lower dependence on the number of international visitors travelling to Cambodia.
She said the average monthly rent for warehouse space in Phnom Penh ranges from $2-5 per square metre, dependent on location and the condition of the facilities. Leasing contracts have an average length of five years.
On the flip side, Grace Rachny Fong, executive director of Century 21 Cambodia, the master franchisor of US-based Century 21 Real Estate LLC in the Kingdom, pointed out that rental prices in the provinces continue to depreciate.
She said market recovery overall has been rather sluggish but is set to pick up steam by the end of the year.
According to Fong, warehouses over 1,000 square metres typically have the highest demand.
“The market will be bustling from the fourth quarter of 2021, as Covid-19 vaccinations increase the number of investors from each country. Once investment grows, demand for warehousing will shoot up as well,” said Fong.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, previously told The Post that Covid-19 vaccine rollouts around the world have led to a rise in the number of investment projects approved by the Council for the Development of Cambodia.
They have also spurred work on bilateral agreements with trading partners and incentivised construction of new infrastructure – including on the Kingdom’s flagship deep-sea port in Preah Sihanouk province, he claimed.
This, he said, will buoy Cambodia’s demand for warehousing, especially from mid-2021 onwards.
“All investment projects require warehousing, hence the market will enjoy a snowballing in demand, especially once the Covid-19 disease situation comes completely under control,” Vanak said.
