The recently released Knight Frank Asia Pacific Prime Office Rental Index Q1 2015 suggests very little change has occurred in rental prices for Phnom Penh prime office space in the first quarter of 2015.
Published quarterly, the Asia-Pacific Prime Office Index provides occupiers, landlords and investors with a regular analysis of the rental performance of prime office properties across key markets in Asia Pacific. The report amalgamates studies of prime office rental prices in various cities throughout Asia Pacific; including Phnom Penh, Beijing, Guangzhou, Shanghai, Hong Kong, Jakarta, Tokyo, Kuala Lumpur, Singapore, Seoul, Bangalore, Mumbai, New Delhi, Taipei, Bangkok, Brisbane, Melbourne, Perth and Sydney.
In the first quarter of 2015, Phnom Penh prime office rents inched upward only very slightly, an increase of just 0.6 percent. The Knight Frank Asia Pacific Prime Office Rental Index takes into consideration the rental rates in Vattanac Capital Tower, Canadia Tower and Phnom Penh Tower. After services, taxes and charges, prime office rent net prices fell between $22.1 p/m2 and $29.1 p/m2 per month. Compared to neighbours such as Thailand, Malaysia and Singapore, Phnom Penh prime office space is still low. Bangkok showed the highest rental growth in the entire Asia Pacific region, with a 3.8 per cent quarter on quarter increase.
A little more background on the Phnom Penh Office Space Market:
New prime office developments in Phnom Penh are generally built to considerably improved construction standards and offer various amenities suited to a modern business environment.
A building’s grade is classified by its design, quality, location, size, services, amenities, facilities and the internal management systems. The rental price is reflected by this grading.
- In Phnom Penh, the majority of the office space sector is made up of Grade C/C- standard offices –this grade represents around 70 percent of the office space market in Cambodia.
- The remainder are Grade B/B+ offices. For example, the 22-storey Phnom Penh Tower and Canadia Tower offer Grade B+ office space.
- Prime office centres such as these are proving popular with international companies who wish to set up or expand operations in Cambodia. Multinational start-ups and country offices choose these grades of prime offices for the security and integrated facilities they offer.
- Grade B standards are still high compared to the majority of offerings in Phnom Penh – but of course fall below that of Grade A, usually in terms of location and additional facilities offered.
- Several new Grade A prime office developments are being constructed across Phnom Penh.
- Vattanac Capital Tower was Cambodia’s first Grade A prime office space venue, providing over 35,000 square metres of office space.
- Presently, high-end prime 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.
- GT Tower, for instance, is due to be completed at the end of this year, and will become the fourth largest office tower in Cambodia.
- Regardless of grade, as Phnom Penh is still an unsaturated market, these new office spaces are entering the market at highly competitive rental prices compared to the region.