The second half of the year is likely to continue to be tough for property developers, providing potential bargains for buyers and renters, according to CBRE, Cambodia’s largest foreign-owned property consultancy. CBRE says a real estate recovery in 2022 depends on the success of the government’s immunisation programme and any new steps it takes to help stimulate sales.
“The resurgent epidemic in Cambodia has been a real struggle and has hit the market very hard. A lot of that impact was in the second quarter[of the year] as we had a lockdown and that has led to some big adjustments in the numbers we are seeing,” said CBRE Managing Director James Hodge.
“We expect the next six months to follow a similar pattern of improving and deteriorating. There is light at the end of the tunnel, but it will still take some time for the storm to be weathered,” he said.
Hodge sees potential for progress as new infrastructure projects such as new roads around Sihanoukville and Phnom Penh’s new Morodok Techo National Stadium give developers access to new areas to create desirable locations for buyers.
For buyers and renters there is more supply and a lot more room to haggle over the price. Hodge says it will continue to be a buyer’s market next year as more apartments come on to the market.
“This slowdown of new supply is not unhealthy from occupiers and investors’ perspectives. If you are an owner of those projects there is less competition when you are sourcing a tenant, but it does lead to uncertainty. We are expecting a 50 percent increase in condominium units completed by the end of the year,” he said.
Serviced apartments are also plentiful and cheap because expatriates make up a large proportion of their clientele and many have left Phnom Penh, while more hotels that are starved of tourists have also started offering long-stay options.
“Most units in the centre of the city are in the high range but, in the second half of the year, we will see a spread to more affordable and mid-range. Also, some high-end condominiums like The Gateway and the Peak, so we can expect dramatic changes in the second half. As big projects hit the market, we will see an impact on the rates that can be charged,” Hodge said.
“Rent is a similar story. Although there has been a stronger reaction from serviced apartments, high-end rates are dipping below $22 a square metre, so there has been a strong reaction after the second half of 2020,” he said.
In the commercial sector there are fewer tenants, but a limited supply of new properties has limited the fall in rental prices.
“We anticipate 200,000 units as of the end of the first half and a reduction to 120,000 net leasable square metres. This is having a downward effect on occupancy rates with central occupancy dipping 3.8 percent half-on-half. There is 72 percent occupancy in central units. We anticipate 52,659 square metres of net leasable area entering the market by the end of the year,” said CBRE Associate Director Lawrence Lennon.
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