International companies entering Cambodia are bolstering demand for purpose-built office space in Phnom Penh, according to a real estate firm.
Only 18 percent of the 190,000 square meters of office property in the city is currently vacant, a report by the local office of global consultants CB Richard Ellis (CBRE), sent out on Tuesday, said.
The report comes as the Vattanac Tower, which will add a significant block of office space to the market, prepares to begin welcoming companies in June.
CBRE attributed the positive outlook on office space to logistics and manufacturing companies coming in from South Korea, Japan and China.
“Due to this high demand, and the slow release of new office development, landlords at the mid to high tier of the market take a bullish attitude on renewals and taking on new tenants,” the report says.
CBRE Cambodia manager Owen Williams said that office space occupancy had been about 80 percent a year ago, and demand for office space was rising as Cambodia’s economy grows and diversifies.
That means that rather than set up in villas, new firms, many coming from Japan, are looking for purpose-built space for their offices, he said.
“We are starting to see a number of multinational corporations. Obviously, image is a big thing and if they’re expanding in Cambodia, they probably want to move from residential space into office space,” he said, explaining that in such properties, building management is taken care of and upkeep costs are lower.
“It is a good sign of the emerging market,” Mr. Williams said. “It is a sign of growth when you see tenants investing more, starting to invest more in better space to expand their offices.”
He predicted that occupancy would dip when the Vattanac Tower is added to the 12 other properties currently offering purpose-built office space. The tower will begin filling its 29,000 square meters of high-end office space in June, he said.
