A Complete Guide to Office Space & Buildings in Cambodia
Businesses often entail needing offices or spaces that allow their organization to function as necessary. These offices are optimized for productivity, company growth, and follow the business’ brand and model. Since office spaces are always going to be in demand as more startups are launched every year, the office building and space market is a good ground to add to your real estate portfolio.
Ensure that you have a varied and strong investment portfolio when you invest in office space and buildings. Learn everything you need to know about investing as well as renting office spaces in Cambodia.
The office market in Cambodia
Cambodia’s economy has seen massive growth with more local and foreign investors starting their own businesses. Alongside this, the demand for office spaces and buildings have risen even despite the pandemic slowing down different industries. Real estate service provider CBRE Cambodia’s Managing Director Ann Sothida indicated that the real estate market sees 60% growth by 2021, relative to the 2020 downturn.
Moreover, 34% of office spaces have been added this pandemic which is a total of 125,500 square metres. Not only that but Knight Frank released a report that an estimated 1,059,170 square metres of Net Leasable Area (NLA) will be completed by 2021 and more in the following years as the economy recovers.
Office space grades
All office buildings and spaces have different ratings, determining the quality of the spaces according to various factors. Listed below are some of the factors included in classifying these buildings:
- Maintenance level
- Lease length
- Current and previous tenants
- Building age.
Check the three office gradings and what they offer you below.
Grade A Office
Office buildings that are rated Grade A are located in prime locations with top of the line amenities, facilities, and equipment. It’s considered high-end due to its location, facilities and the modern HVAC systems installed in it. Additionally, developers prioritized interior design for the office, common areas, and more. These buildings can commonly be found in Daun Penh.
Grade B Office
Grade B buildings are commonly used by offices since it’s relatively cheaper than Grade A buildings. Its equipment and facilities don’t prioritize high quality materials and design but it covers optimization in work space.
Grade C Office
Is it possible to buy office space as a foreign investor?
Cambodia is strict in its laws wherein only locals can own land and property with soft and hard titles. However, it’s still possible for foreign investors to buy office spaces or buildings under the strata title. This is often used for condo units but foreign investors can buy properties if it meets the following:
- It isn’t on the ground floor or located underground
- It isn’t within 30 kilometers of a land border
- It’s a building developed in 2010 or in later years
Additionally, foreign investors can only buy 70% of the property surface area. However, if you set up a local company to buy the office space, then it’s possible even as a foreign investor. In setting up the company, you need to find local shareholders so it’s approved by the law.
You can take steps to ensure your investment is protected by setting up different classes of shares, land security, and a minority control document.
On the other hand, if you’re a local investor and want to buy an office, then there are no legal loopholes that you have to work through since you can just do your due diligence and buy it.
Where to buy office space in Phnom Penh?
Most worthwhile and marketable office spaces and buildings are located in Phnom Penh. This is due to the fact that the city is the economic, commercial, and tourist hub of the country. Check below the top areas in Phnom Penh where it’s best to invest in an office.
Located south of Phnom Penh, Chamkar Mon is one of the most popular districts to foreign residents since it has numerous attractions in it. This includes the Russian Market, the 5-star hotel Naga World, and the Tuol Tompoung Market. Additionally, BKK1 and BKK2 areas inside Chamkar Mon are popular to foreigners as well as locals.
At the top of the areas you need to invest in an office is Daun Penh, which is the prime district for business in Phnom Penh. Not only that but it contains the Central Market or Phsar Thmei, which is popular to both locals and foreigners alike.
Since this district is populated by businesses, many embassies, government buildings, and international universities are located here. Considering all this, if you invest in an office here, your ROI and lease price would be higher.