Over the last year an ever increasing number of new office space has become available in the capital making the choice for large multinational companies and smaller local companies an even greater one.
In the past when the usual tenants were NGO’s and embassy’s the main choice was a villa in area’s such as BKK1, Tonle Bassac and the part of Daun Penh between Norodon and Monivong yet with the increase in larger retail companies and the dwindling supply of villa’s in these area’s tenants are looking more towards the new office buildings springing up throughout the city.
Compare a villa taken 5 years ago in BKK1 with a monthly rent of $2000 to $2500 per month when on renewal of the contract the owner now wants double that yet in the surrounding area’s new office space can be had for $10 + per sqm you can see why the change is taking place. These prime city centre area’s offering ground floor space are changing usage from commercial to retail and a walk through the streets today you see rows of neon signs where once office logo’s stood.
Another point to consider is the changing nature of business as the internet and website’s become more important than the office space itself. Working in real estate a few years ago I would have never considering anything other than a prime ground floor office yet my new office is on the 5th floor of a modern building with little or no walk by customers. Our website and our company connections form the largest method of bringing customers to us and you don’t need high retail rents to achieve this.
Office space in these new building solve a few of the problems associated with traditional ground floor offices such as parking, modern building generally have multi-level parking making is easy for cars and moto’s, also the landlord supplies 24 hour security eliminating and monthly bill. Modern office space is built on an open plan model meaning that using gypsum wall and glass construction any number of internal designs can be accomplished with the minimum of cost and can be altered later as your requirements change.
The cost per sqm can vary from the Vattanac tower offering office space from $28 to $38 psqm and is considered the closest Cambodia has to a grade A building right the way down to basic office space near Olympic stadium and Russian market around the $8 to $10 per sqm mark.
A trend that TK Royal One started was to incorporate Retail ( ground floor ) Office space above and the top half of the building offering high end serviced apartments meaning all requirements could be satisfied within a single building. This allows the maximum potential rent for a building as retail space on the ground floor derives the most desirable and highest rent, above that comes the commercial office space where companies rarely care if their on the 3rd of 5th floor allowing the higher levels to be serviced apartments where tenants want higher floors with views of the city from their homes.
No official figures really exist on the quantity of new office space coming online yet its fair to say that landlords will have to consider discounting on rents to attract new tenants and freezing rents to keep the ones they have.
Phnom Penh is changing rapidly, where you live and socialize, maybe now where you work also.
Bobby Peoples
