Cambodia’s robust economic growth was severely hampered by the outbreak of COVID-19. The real estate market, in particular, felt its effects as both international and local buyers’ priorities shifted with the onset of the global pandemic.
In Q1 2020, CBRE Cambodia, a property consultancy firm, released a report citing the first signs of a downward trend of property sale and rental prices due to weakening economic activity. And as COVID-19 continues to spread in the rest of the world, the same fears and precautions persist in the Kingdom, continuing to drag segments of the market down, but not everywhere.
Condominium sales and rents
In Q1 2020, CBRE Cambodia released a report citing Phnom Penh condominium sale price decreases of up 0.5% and 1.5% for the high-end and mid-range of the condo market, respectively. The affordable market during the same period, however, saw a slight uptick of 0.3%.
The trend for each market segment continues in Q2 2020 as condominium sale prices further decreased by 4.0% for the high-end and 4.6% for the mid-range market. This puts market average prices for the high-end market at ~$3,200 per sqm and the mid-range at ~$2,600 per sqm. The affordable market, on the other hand, remained steady during the course of Q2 2020 at ~$1,550 per sqm.
Rental prices in Q2 2020 continue the downward trend seen in Q1 2020. In the first quarter of 2020, CBRE Cambodia cited a quarter-on-quarter decrease of 0.4% and 0.6% for the high-end and mid-range segments of the market, respectively. This downward trend continues in Q2 2020 as mid-range rentals suffer a 5.7% decrease while the high-end market slumped down by 7.25%.
According to CBRE Cambodia’s report, as negative corrections continue, it’s important to remember that the true extent of COVID-19’s economic impact is yet to be determined. Prices will likely continue to experience downward pressure until international travel restrictions are eased.
Retail space rents
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According to CBRE’s Q1 2020 report, the decrease in foot traffic in Phnom Penh’s retail centres saw a sharp drop due to the spread of COVID-19. Low retail sales have translated to quoted rentals rates being slashed by as much as 10.5%, the sharpest reduction in 4 years.
The retail market in Q2 2020 continues to face this downward trend as rents in shopping malls have fallen by 11.7% for shopping malls and 2.48% for retail podiums. According to CBRE’s report, Google mobility indicators suggest that foot traffic to retail malls are still down by 17% compared to pre-coronavirus levels. This is an improvement, however, to the -42% foot traffic back in mid-April at the height of the scare in Cambodia.
Office space rents
Q1 2020 marked stiff competition for tenants among office space landlords. The entry of new office buildings in Phnom Penh in Q2 2020 has piled on the competition and put pressure on Grade B office rentals in Phnom Penh.
According to CBRE Cambodia’s Q2 2020 report, the rental rates across the Grade B centrally-owned office sector corrected downward with Grade B CBD & (non)CBD rents slipping, 3.14% and 2.89% respectively. However, Grade C CBD and Grade C-(non)CBD both adjusted upwards by nearly 8.00% and 4.50%, respectively.
From: https://www.realestate.com.kh/news/cambodian-property-sales-and-rentals-slide-q2-2020/