The office sector boasted a higher number of deals in Q1 2021

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Phnom Penh: The centrally-owned office sector is expecting 27,602 sqm of space to complete over the course of 2021, according to CBRE Cambodia’s report. Combined with the forecast strata-title supply the office sector is expecting a sizeable 197,608 sqm of new completions this year.
The centrally-owned office sector witnessed the completion of two buildings during Q1 2021.
The completion of the third Grade A building; Sathapana Tower, located in Daun Penh, added 16,357 square metres to the total supply. Additionally, the completion of a Grade C office building in Toul Kork added a further 1,664 square metres. The completions accounted for 65% of the centrally-owned supply pipeline for 2021.
Centrally-owned office occupancy fell to 74.7%, reflecting a decrease of 2.3% q-o-q as a result of the increase in supply. However, as the market imminently awaits the completion of 6 new strata-title buildings, overall occupancy in the office sector is likely to drop further during the course of the year.
The office sector boasted a higher number of deals q-o-q in Q1 2021, however lease length, deal quantum and achieved rent all fell in comparison to Q4 2020, and Q1 2020.
Across all four sub sectors, quoting rents improved during the first quarter. Both Grade B CBD and NCBD rental rates recorded a strong uptick of 3.3% and 3.9%, respectively q-o-q.
Grade C CBD rental rates recorded a similarly positive adjustment of 3.3%, however Grade C CBD rents were more sluggish reporting a weaker 0.4% increase in quoting rents over the quarter.
Whilst there were no completions of stratatitle office buildings over the first quarter, the quoting rents remained strong. For the six expected completions in 2021, the average quoting rents during Q1 2020 was $26.80 per square metre per month. Many projects are aiming to achieve prime office rental rates comparable to Grade A centrally-owned buildings.
However, as new supply continues to enter the market throughout the year, it is likely that these quoting rental rates will begin to cool, as landlord compete to fill-up available space.
Google’s mobility tracker indicated that Phnom Penh workplace mobility averaged 17.6% over the quarter compared to the baseline in February 2020. Prior to 20th February the average mobility figures were hovering around the baseline whilst long-run mobility in 2020 was at -14.4%

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