An influx of expats working in Phnom Penh has led to brisk growth in the capital’s serviced apartment market in the last three years, according to a report released Monday by local real estate firm VTrust.
The number of graded serviced apartments—high- and low-end rental apartments with additional services such as cleaning, laundry and Internet—grew 3 percent during the first half of the year compared to the same period in 2013.
In total, there are 3,500 graded serviced apartment units in 180 buildings in the city.
It is estimated that about 50,000, or 68 percent, of foreigners working in Cambodia live in Phnom Penh and “serviced apartments absorb the majority of these expatriates,” according to the 2014 Report of Apartment Market in Phnom Penh.
“Serviced apartment market in Phnom Penh has grown quickly since the last three years, as driven by a great influx of foreign expatriates who come for work in the Capital,” the study says.
“The large number of these expats gives rise to a high demand on high-class and long-term accommodations such as serviced apartments and condos.”
The monthly rental price of serviced apartments ranges from $250 to $1,280.
Chrek Soknim, deputy director of VTrust Property, said that 84 percent of serviced units were occupied in the first half of 2014.
“There is currently more demand than supply so in the next few years we expect demand will still be strong,” he said.
The boisterous growth of serviced apartments is destined to continue next year as the outset of the 2015 Asean Economic Community (AEC) approaches, the report says.
It states that 53 percent of apartment service providers are planning new apartment projects based on speculation that the AEC—in which labor, capital and goods are expected to flow more freely—“will see a great influx of foreign expats on business purposes.”
However, Ross Wheble, country manager at real estate firm Knight Frank, doubts the AEC will significantly change the apartment and real estate industry.
“What exactly is going to change as part of the Asean community?” he asked.
“There may be more cross-border trade but…realistically in the short to medium term it will not have a big impact on the real estate market.”