The real estate sector of Cambodia has progressed tremendously in the past years and foreign direct investment has increased significantly.
Indeed, Foreign Direct Investment (FDI) in the Cambodian property sector continues to grow rapidly and the total investment in real estate was $7.2 billion between January and August 2016, representing a massive 700%+ increase from the preceding period. This has also pushed the number of office spaces in Phnom Penh, as well as the future supply which is expected to climb up to 77% by 2020 (Visit Knight Frank for the full real estate report)
Office space in Phnom Penh
According to the Knight Frank report, Phnom Penh Office Rental Rates remain fairly stable. “For the Phnom Penh prime office sector, Q2 2016 recorded mixed results; whilst net absorption of office space was negative, and the average vacancy rate increased to 34%, prime net headline rents recorded a Q-o-Q increase of 1.1% to $22.5/sqm/month. This can largely be attributed to the stronger performance of Vattanac Tower which has propped up the overall average rent despite the negative take up of office space,” notes Ross Wheble, Country Manager for Knight Frank Cambodia.
Office Space and Price
The report suggests that the average rental price of offices was at around $18 per square meter per month in the 2nd half of 2016. The costs ranged from $2,100 per square meter for Grade B offices (for the Bureau of ownership), and the highest is $4,500 per square meter for Grade A offices. Prices also vary based on the rental period. Grade B & C units with sizes ranging from 100 to 200 square meters are also in demand, valued at $15 per square meters.
Office space in Phnom Penh for rent
The CORE@PPSEZ project is located near the entrance of the Phnom Penh Special Economic Zone. This development includes 10 shopping units, 40 specially-designed office units -- providing convenience for future expansion into trade and factory spaces.
The project is designed to provide easy access to trade and to increase productivity. The project will be a profile for various business, trade and industrial activities that offer international quality services and the starting price of this project is $100,000. These include elevators, security, 24-hour room monitor, 500 square meters of production facility for private cargo handling. The foundation of the CORE@PPSEZ begun on August 1, 2016. The project is scheduled to be completed in March 2018.
East Commercial Center
The East Commercial Center is being developed by Eastland Development. It is located along the Bassac River. The project will have Grade B international standard offices at an affordable rate, and the starting price of this project is $70,000.
Emerald Hub offers affordable office units in the form of a co-working space. It is the most popular option for part-time employees and freelancers. Here, you can work independently or meet with other like-minded people who have different skills and knowledge. Emerald Hub also offers other services such as cleaning, photocopying, hot and cold water, coffee, tea, and many more.
The lowest rental price is at $30 dollars a month for a small unit. But if you need a temporary place where you can rent by the day or a week, they also provide flexible and easy ways for people like entrepreneurs who are just starting a new business.
The mixed-use developments are usually not only developed for residences. It also includes facilities like shopping malls, offices, and hotels.
How to find office space for rent
There are various means to find offices for rent. You can find real estate agents who have professional skills. This is a good choice if you find a reputable real estate agent. In doing so, you’re able to not only save yourself from the trouble but also receive assurance that you’ll find the right property.
You can also search for office spaces by visiting Realestate.com.kh, the leading real estate website in the country. You can find more than 45,500 properties, subdivided by region and price.
Tax for Real Estate Rental
In the past, the landlord or property owner would normally withhold 10% of the rent from its lessor. In a sub-lease situation, the tenant of the real estate entity would withhold 10% of the rent on the sub-lease to the real estate company.
Instruction 18410, however, now provides an exemption with the withholding tax on the sublease if both the lessor and lessee are registered taxpayers.
“Instruction 18410 is another example of the GDT responding positively to the market, which identified this as a duplicate tax for real estate entities, a withholding tax obligation in this case on both the Lessee and Sub-lessee on the same exact space” commented Anthony Galliano, CEO of Cambodian Investment Management.