CBRE’s Phnom Penh Marketview 2016 Q4
Updated on: June 6, 2022, 5:04 p.m.
Published on: May 15, 2017, 3:36 a.m.

CBRE’s Phnom Penh Marketview 2016 Q4

Cambodia’s property market continues to trend upwards.  This is what Simon Griffiths, Senior Associate Director of CBRE Cambodia, stated in a recent Phnom Penh Post article. He explains, “Looking ahead for 2017, it is likely FDI will remain high but not in the same sectors or geographies as experienced in 2015 and 2016.” He continues, “For 2017, as a foreign private investor, it is an interesting time.”

But what actually happened and what might happen to the real estate sector of Cambodia -- specifically in Phnom Penh? CBRE’s Phnom Penh Marketview 2016 Q4 report attempts to explore that question.

What’s been happening in Phnom Penh’s Condominium Sector?

The CBRE Phnom Penh Marketview 2016 Q4 states that the average quoted  price in mid-range condos rose by 1% quarter on quarter while high-end condos dropped 1.8% quarter-on-quarter. But overall, 2016 saw an increase in quoted sales price across all grades.

The report also mentions that future condominium developments that will be launched may heavily focus on another income class. It states “In 2017, we expect to see new condominium project launches focused in secondary locations and on the ‘affordable’ segment to target 'middle income households.” This means projects located outside the prime residential areas.

The report also estimates an increase of condominium supply in 2017. According to the report, around 8,000 units are set to reach completion within the year and an additional 13,000 units in 2018. CBRE also estimates that there will be more mid-range and high-end projects that will represent 47% and 34% of the total supply by 2018.

What’s been happening in Phnom Penh’s Office Sector?

The office market had a year on year decrease of 1.2% in Grade C rents during the 4th quarter of 2016. This is due to low rents that were quoted by newly completed Grade C stock. In contrast, the Grade B stock increased by 11.2%.

As a result of this, the report indicates only one Grade C office building was completed during the 4th quarter of 2016 and the earliest purpose-built office, the Hong Kong Center, closed. But the report mentions that as a consolation, there is an expected increase of quality supply of offices in 2017. The report states “During the next 12 months, a total of around 65,000 square meters of office space is due to launch, with Hongkong Land’s ‘Exchange Square’ on track to add 18,000 square meters as the city’s second Grade-A office, by Q1 2017.”

CBRE’s report also indicates that there will be an increase in strata-title driven projects in the future. It says that around 70% of the future office supply within the next 36 months have strata titles. This will represent a 24% of the total office supply by the time 2019 ends.

What’s been happening in Phnom Penh’s Retail Sector?

A look back during the 4th quarter of 2016 showed that prime rents remained stable despite a quarter-on-quarter drop of 1%. The report says that the highest average prime rents manifested in retail arcades and retail podiums which came in at $52.50 per square meter and $48.30 per square meter.

The report also says that the modern retail supply is beginning to decentralise too. It states “Future developments are more widely dispersed, and although Chamkarmon, the traditional retailing heart of Phnom Penh, is forecast to retain its crown with 28% of supply, other districts will claim a greater share. This trend is supported by rising land prices in central areas and greater availability of large development plots in less developed locations, in addition to the need of city to expand and large-scale residential developments within secondary locations.

This is in contrast to the 4th quarter of 2016 where 68% of the modern retail supply was concentrated on Daun Penh and Chamkarmon.

CBRE also foresees a significant increase in retail by the end of 2018 because of the new shopping complexes and mixed-use developments such as the Parkson Phnom Penh City Center and Hongkong land’s Exchange Square.

What’s been happening in Phnom Penh’s Serviced Apartment Sector?

Similar to the retail sector, Prime serviced apartments also remained stable during the 4th quarter of 2016 -- specifically A and B Grade properties. Rental rates in the city ranged between $14.96 per square meter for a Grade-B apartment and $21.02 per square meter for a Grade-A apartment.

As a result of this, enquiries are still coming in and displays a continued demand for serviced apartments across all budget ranges. Affordable and mid-priced apartments remain to have the highest demand among them. From the data gathered by CBRE, over 69% of enquiries were for rental cost of about $2,000 a month. The report states that “Grade-B stock saw the most rapid increase in supply over the year, adding an additional 86% of 2015 supply, whilst Grade-C added 50% and became the most populous market segment.”

The insights from the report show a truly interesting and continuously evolving market for investments across different segments in Cambodian real estate. But what people do with the data and how it’s going to shape the market in the future might be something to look forward to.

To keep yourself updated with the latest market movements, visit Realestate.com.kh now!

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