Phnom Penh commercial property space is expanding everyday. Whether it be the rise of office space in the central city, or the spread of ranging industrial areas on the cities outskirts.
Phnom Penh Office Villas:
Traditionally, as a city lacking a skyline, villas were the preferred option for businesses seeking Phnom Penh commercial property for office purposes. This was because a villa is flexible for anyone seeking Phnom Penh commercial property. A villa can easily be used for many things: an office, family home, restaurant, guesthouse, production area – or any variety of these things. Villas are affordable and flexible.
Villas are more expensive than flats, at around $3,500 to $4,500 per sq. m. Typical rental prices for villas range from as low as around $6/sq. metre to $25/sq. metre. However, longer leases or opting to sign as an anchor tenant may see these rates reduced. Beware though – working out a fair lease can be a challenge in the Phnom Penh commercial property market, and Cambodia generally, as villas (and other property for that matter) will often be priced according to your presumed budget rather than fair market value. Increasingly, however, villas around Phnom Penh are being pulled down to make way for new luxury developments and condominiums, or being secured and modified for retail purposes. A decrease in supply has increased the value of those villas that still remain.
Phnom Penh Graded Offices:
Presently, prime and mid-level office space across Phnom Penh is rising dramatically, with a variety of new tower projects opening now, or planning to open in the near and not so distant future. These new office complexes are often coming to town at the cost of knocking down villas, flats and other older real estate. Phnom Penh commercial property options are only set to boom in the upcoming future, especially with the rise of ASEAN and the AEC.
New office developments are generally being built to improved construction standards and offer more and more amenities suited to businesses, Khmer and International. A building’s grade is classified by its design, quality, location, size, services, amenities, facilities and the internal management systems it provides. The rental price is reflected by this grade throughout the Phnom Penh commercial property market.
In Phnom Penh real estate, the office space sector is for the most part made up of Grade C/C- standard offices – according to CBRE’s July 2013 MarketView analysis – constituting around 70 percent of the macro-office space market in Cambodia. Grade B/B+ offices make up the remainder. For example, the 22-storey Phnom Penh Tower and Canadia Tower office complex offer Grade B+ office space to the growing Phnom Penh real estate sphere, and, accordingly, these facilities entail a modern layout and fixtures. Fully serviced office centres such as these are proving popular with international companies who wish to move operations to Cambodia, as are more modest versions of the same office block model. These complexes offer businesses security and integrated facilities perfect for start-ups.
Grade B standards are still noticeably higher in comparison to the majority of offerings in the Phnom Penh commercial property market- but, obviously, fall below that of Grade A. This differentiation is usually in terms of location and facilities offered. Several new Grade A office developments are being constructed across Phnom Penh, with the nation’s forerunner, Vattanac Capital Tower, now open – the country’s first Grade A office space venue. Vattanac will provide over 35,000 square metres of prime office space to Phnom Penh businesses. Along with this, GT Tower is set for completion this year, to become the fourth largest office tower in Cambodia.
Regardless of grading, as Phnom Penh is still an unsaturated office space market, these new office spaces are entering the market at competitive rental prices compared to the greater region.
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