REAL ESTATE-CONSTRUCTION: Office space in Phnom​Penh: How to choose the​​​ best working space

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The real estate sector of Cambodia has progressed tremendously in the past few years with a lot to do with foreign direct investment bringing big companies and entrepreneurs alike in Phnom Penh. As such, office spaces have grown in demand to house rising local businesses and foreign companies wanting a piece of Cambodia’s growing market.

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Overview of office spaces in Phnom Penh

 

There are many options for companies to set up shop in Phnom Penh. The city offers a wide range of office space choices and it’s only growing with each passing year.

Knight Frank, an international real estate consultancy firm in Phnom Penh, released a report called Cambodia Real Estate Highlights First Half 2019. In their report, they indicated 4 key findings for Phnom Penh’s office sector, namely:

The completion of Diamond Twin Tower, Elysee Tower and Prince Holding contributed approximately 46,444 sqm of net lettable area (NLA) to the Phnom Penh office stock, taking the total office supply to 463,701 sqm.

Diamond Twin Tower, a mixed development comprising condominiums, office and retail components, was the thirst stratified office building to be added to Phnom Penh’s office stock. The new incoming supply placed downward pressure on the overall average occupancy, dropping 5.2 percentage points (from 88.5%) to 83.3% during H1 2019. Yield-driven investors may be attracted to stratified office investments as the condominium market continues to cool down.

There has been an overall increase in available office spaces in Phnom Penh as of 2019. The Knight Frank report also projects that the growth (if monitored projects are completed on schedule) would more than double by the year 2021 – offering up to 1,059,170 sqm NLA.

Office spaces in Phnom Penh are distributed in the following areas:

 

Daun Penh (32%) – considered Phnom Penh’s (Primary) Central Business District

Chamkarmon (25%)

7 Makara (17%)

Boeung Keng Kong (15%)

Toul Kork (4%)

Sen Sok (4%)

Meanchey (2%)

Chroy Changvar (1%)

 

Office space grading in Phnom Penh

An office meeting ro

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om in Phnom Penh. Photo courtesy of Canadia Tower.

The year-on-year expansion of the capital’s business activity gives investors a chance to choose from a healthy selection of Grade A, B and C office spaces.

Grade A – These offices are what would be considered high-end. These are commonly located in high-visibility locations. Grade A offices are outfitted with top-of-the-line equipment, amenities and modern HVAC systems. They’re spacious and aesthetically pleasing in terms of outside appearance and interior design. These are office spaces that’s commonly associated with your multinational conglomerate who can afford the small fortune to keep these offices looking impeccable.

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Grade B – These are what would be considered middle-of-the-market office spaces. Some Grade B spaces offer the aesthetics and comfort higher-end offices might offer with some compromises. Nevertheless, facilities offered by Grade B office spaces usually are more than enough to cover the basics for a decent work environment. It’s arguably the most popular office grade companies go for since it’s usually much cheaper than Grade A offices.

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Grade C – These offices are relatively the lowest priced and the poorest-quality in a given market. Grade C offices can usually be found outside a city’s business district and/or in old buildings over 20 years old. While this office grade seems unattractive on paper, they do serve companies who are on tighter budgets and does not require a position proximal to the city’s business district.

 

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Office space rental prices

 

According to the Knight Frank H1 2019 report, office rental rates remain fairly stable over the past few years. The report states:

“As a result of continuous office supply swelling, specifically Grade B and C, office rentals remained unchanged across all grades. Grade A, B and C offices command rentals ranging between US$28 to US$40 per sqm per month, US$18 to US$29, and US$9 to US$18, respectively. (excluding service charges and tax)”

Of course, when it comes to Grade A office spaces, more luxurious (and expensive) options are available – coming with all the bells-and-whistles an office manager could ask for. One example is the Diamond Twin Tower located in Koh Pich which, according to the Knight Frank report, sells (via strata titles) its floor space anywhere between USD$2,800 to USD$3,600 per square meter.

 

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How to find office space for rent

 

There are various means to find offices for rent in Phnom Penh. You can find real estate agents who have a network of office space lessors. These real estate agents can save you a lot of headaches in terms of time spent looking for the right space, and negotiating the prices with the lessors. We recommend going through an agent since they will also walk you through the whole legal process of securing the lease.

You can also search for office spaces (and agents) by visiting Realestate.com.kh, the leading real estate website in Cambodia. You can find more than 45,500 properties, subdivided by region, price, and amenities. Realestate.com.kh has a long list of commercial real estate agencies and agents available for users to contact directly./ Realestate.com.kh.staff / Khmer Times