CBRE Cambodia logo


Residential Project Marketing


Monthly Archives: July 2012


Six of the Top Ten ‘Most Expensive’ Markets in Asia-Pacific

as Emerging Economies Attract Occupiers

* * *

Occupancy Costs Increase 3.6% Worldwide From Year Ago 

Los Angeles — July, 2012 — Asia-Pacific holds increasing sway in the global commercial real estate market, as Hong Kong-CBD was the world’s most expensive office market and the region accounted for six of the top 10 most expensive markets worldwide, according to CBRE Global Research and Consulting’s semi-annual Prime Office Occupancy Costs survey. Asia-Pacific also accounted for the market with the strongest growth in occupancy costs, as Beijing’s Jianguomen-CBD saw costs rise 49.4% over the past year, CBRE found.

Hong Kong’s CBD led the “most expense” list with overall occupancy costs of US$248.83 per sq. ft. This topped London’s West End, which, despite a 4.7% year-over-year increase, had total occupancy costs of US$220.15. Tokyo’s was the third most expensive market for office space, followed by Beijing’s Jianguomen (CBD) and Moscow. Other Asia-Pacific markets in the top ten include Beijing-Finance Street (6th), Hong Kong-Kowloon and New Delhi-Connaught Place, CBD (9th).

CBRE tracks occupancy costs for prime office space in 133 markets around the globe. Of the top 50 ‘most expensive’ markets 19 are in Asia-Pacific, 19 are in EMEA and 12 in the Americas.  

“The most expensive office locales are increasingly located in dynamic markets across the emerging economies as office occupiers diversify their global footprints in these markets to take advantage of rising incomes and the availability of labor,” said Dr. Raymond Torto, CBRE’s Global Chief Economist. ”The most expensive office occupier markets also have a diversified economic base; limited, available institutional quality space; strong currencies and are increasingly located in urban centers.”

Occupancy costs increased by an average 3.6% worldwide led by Asia-Pacific at 7.8%, Americas at 5.0%, and EMEA at 0.4%. Occupancy costs increased in 80 markets, decreased in 24, with no change in 29.   Among the markets exhibiting the most significant gains were the aforementioned Beijing Jianguomen (CBD) along with Beijing’s Finance Street and Guangzhou, China. Beijing’s rise was driven by strong demand, particularly from domestic financial institutions, combined with lack of available space in Finance Street. Rounding out the top five largest annual increases were San Francisco (Downtown) and San Francisco’s Peninsula market.

While comparisons in dollars are affected by currency exchange rates, annual percent change calculations are based upon occupancy costs in local currency and measurement and not influenced by currency changes. Due to methodology changes in this report, comparisons with figures in previously released reports are not valid.

Asia Pacific

Asia Pacific had 19 markets ranked in the top 50 most expensive, with three of the top five—Hong Kong-CBD, Tokyo and Beijing’s Jianguomen (CBD)—most expensive markets. According to a CBRE survey of Global Office Occupier Footprints, Hong Kong is the number one location for global office occupiers and this, coupled with scarce land for development, has led to high office rents. The most expensive market in the global ranking from the Pacific Region was Sydney (US$117.88 per sq. ft.), which came in at 15th, on the strength of an 18.9% increase in local currency.

Despite its most-expensive ranking, Hong Kong experienced the largest annual decrease of all 133 markets tracked (-17.2%) as margin pressures on global financial services firms have impacted its Central submarket in the last year given its high exposure to such firms. Some of these firms have consolidated space requirements leading to increased availability in the core CBD.

Europe Middle East & Africa (EMEA)

In addition to London’s West End ranking as the world’s second-most expensive market, other markets in the region that top the list are Moscow (occupancy cost of US$171.53 per sq. ft.), Paris (US$123.82 per sq. ft.), and Geneva (US$99.18 per sq. ft.).

Moscow posted the largest gain for the region as its occupier costs grew by 19.1%, driven by strong tenant demand particularly focused on the CBD area where vacancy is relatively low and new development is very limited. Moscow was followed by Johannesburg, South Africa (14.3%). The largest declines were in Abu Dhabi, United Arab Emirates (-16.7%), and Thessaloniki, Greece (-16.3%). Overall, 12 markets in EMEA experienced declines, while 26 markets saw occupancy costs for the year rise.


North America is led by Midtown New York, which posted an office occupancy cost of US$114.30 per sq. ft., on the heels of a 5.9% year-over-year increase. The New York Midtown market was ranked 18th globally.

San Francisco (Downtown) experienced the largest year-over-year increase, at 34%, with San Francisco (Peninsula) right behind it, at 32.7%, with demand spurred by the technology sector. Overall, 32 markets in the Americas saw occupancy costs for the year rise, while only six experienced declines.

In Latin America, São Paulo remains the most expensive market, posting an office occupancy cost of US$144.75 per sq. ft., and ranks as the 8th most expensive market globally. Meanwhile, with an occupancy cost of $128.02 per sq. ft., Rio de Janeiro is also in the top 15.

Top Ten Most Expensive Markets

(In US$ per sq. ft. per annum)

  Rank            Market Occ Cost





Hong Kong (Central), Hong Kong




London – Central (West End), United Kingdom




Tokyo, Japan




Beijing (Jianguomen – CBD), China




Moscow, Russian Federation




Beijing (Finance Street), China




Hong Kong (Kowloon), Hong Kong




Sao Paulo, Brazil




New Delhi (Connaught Place – CBD), India




London – Central (City), United Kingdom



Largest Annual Changes Occupancy Costs

(In local currency & measure)

Top 5 Increases



% Change






Beijing (Jianguomen – CBD), China




Beijing (Finance Street), China




Guangzhou, China




San Francisco (Downtown), U.S.




San Francisco (Peninsula), U.S.
















Top 5 Decreases



% Change





Hong Kong (Central), Hong Kong




Abu Dhabi, United Arab Emirates




Thessaloniki, Greece




Dublin, Ireland




Athens, Greece
















Note: The full Top 50 Most Expensive Markets chart is located at the end of this press release.

Notes to Editors

  1. The Prime Office Occupancy Costs report is a survey of office occupation costs for prime office space in 133 cities worldwide.
  2. The latest survey provides data on office rents and occupancy costs as of March 31, 2012.
  3. The Largest Annual Changes rankings are based upon occupancy costs in local currency and measure. The Most Expensive ranking is based upon occupancy costs in US$ per sq. ft. per annum.
  4. The figures given in this release refer to occupancy cost. This represents rent, plus local taxes and service charges. The occupation cost figures have also been adjusted to reflect different measurement practices from market to market.
  5. Due to methodology changes comparisons with figures in previously released reports are not valid.
  6. To obtain a full copy of the report or to arrange to speak with a CBRE expert, please contact Robert McGrath at 212.984.8267 or

 Top 50 Most Expensive Office Markets as of March 31, 2012






Hong Kong (Central), Hong Kong




London – Central (West End), United Kingdom




Tokyo, Japan




Beijing (Jianguomen – CBD), China




Moscow, Russian Federation




Beijing (Finance Street), China




Hong Kong (Kowloon), Hong Kong




São Paulo, Brazil




New Delhi (Connaught Place – CBD), India




London – Central (City), United Kingdom




Shanghai (Puxi), China




Rio de Janeiro, Brazil




Mumbai (Bandra Kurla Complex), India




Paris Ile-de-France, France




Sydney, Australia




Singapore, Singapore




Shanghai (Pudong), China




New York (Midtown Manhattan ), U.S.




Geneva, Switzerland




Mumbai (Nariman Point – CBD), India




Zurich, Switzerland




Caracas, Venezuela




Washington DC (Downtown), U.S.




Perth, Australia




Dubai, United Arab Emirates




Seoul (CBD), South Korea




Boston (Downtown), U.S.




Guangzhou, China




Istanbul, Turkey




Luxembourg City, Luxembourg




Brisbane, Australia




Los Angeles (Suburban), U.S.




Milan, Italy




Stockholm, Sweden




Seoul (Yeouido), South Korea




Manchester, United Kingdom




San Francisco (Downtown), U.S.




Toronto (Downtown), Canada




Edinburgh, United Kingdom




Aberdeen, United Kingdom




New York (Downtown Manhattan), U.S.




Birmingham, United Kingdom




Frankfurt am Main, Germany




Taipei, Taiwan




Bristol, United Kingdom




Calgary (Downtown), Canada




Oslo, Norway




Glasgow, United Kingdom




Vancouver (Downtown), Canada




Ho Chi Minh City, Vietnam



Source: CBRE Global Research and Consulting

 About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue).  The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at

Posted in News | Leave a comment

Prudential granted approval by ministry

Prudential Corporation Asia yesterday received “in-principle” approval from the Ministry of Economy and Finance to establish a foreign-owned life insurance operation in the country, an official statement from the company said.

The announcement comes after Canadian life insurance giant Manulife on Thursday made public plans for a new head office in Phnom Penh and intentions to invest up to US$20 million in Cambodia over the next five years.

State-owned Cambodia Life launched in May and was the Kingdom’s first life insurance company, the Post reported earlier this year.

Prudential plans to invest $7 million in Cambodia’s insurance industry, British Ambassador Mark Gooding said on Friday.

Prudential established a representative office in Phnom Penh in December 2010, and will be relocating its premises to Phnom Penh Tower Building, which will be its corporate office in Cambodia, the company said in a statement.

Manulife and Prudential moving into Cambodia does not indicate companies “flocking” to the Kingdom, said Infinity insurance CEO David Carter. “These companies have been trying to get approval for about two years but have only recently been granted it,” he said.

Manulife will take “around three years” to become profitable, Youk Chanroeunrith, general manager of Forte Insurance, told the Post on Thursday.

This estimate is based on general insurance rather than life insurance, said David Carter. It would take “way beyond” five years for the two new life insurance companies to become profitable, he said.

The Cambodian Securities Exchange will benefit from the two new insurance companies as it is common for life insurance companies to invest in bonds, he said.

Prudential now spans 13 markets in Asia, covering Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, The Philippines, Singapore, Taiwan, Thailand and Vietnam.

Posted in News | Leave a comment

Port sees growth as SEZ starts production

Revenue at Sihanoukville Autonomous Port increased 13.6 per cent year on year between January and June, port officials confirmed yesterday.

As the state-owned enterprise gears up for listing on the Cambodia Securities Exchange, the neighbouring Sihanoukville Special Economic Zone will play an increasingly important role in boosting throughput, insiders said.

The port – Cambodia’s largest – brought in about US$14 million in revenues during the period, Chief Executive Officer Lou Kim Chhun said. Garment and rice exports accounted for the bulk of outgoing shipments.

“[Gross domestic product] is around 6 per cent. The port’s growth is linked closely to the growth of the whole country,” he said yesterday by phone.

Next to the port is the Sihanoukville Special Economic Zone, which officially launched in May. The SEZ has 16 factories in operation and four more preparing to open, Michelle Zhang, a manager at the SEZ said in an email yesterday.

Like Phnom Penh Special Economic Zone, Sihanoukville’s is emerging as a hot spot for diversified exports. Among garment factories – the country’s staple GDP generator – are two Japanese electronics companies and one Chinese-Cambodian bio-technology joint venture, Zhang said. “It’s obvious that the more investors in the SEZ, the more this will contribute to growth at the port,” she said.

About 80 per cent of the SEZ’s exports leave the Sihanoukville Autonomous Port, while nearly all materials used in SEZ factories enter through the port, Zhang added.

Posted in News | Leave a comment

Small growth for water utility, PPWSA

Phnom Penh Water Supply Authority saw 8.2 per cent revenue growth during the first quarter of the year, a welcomed disclosure after the retirement of the state-owned firm’s general director was announced last week.

The firm took in US$7,725,500 between January and March, up from $7,140,473 during the same period last year, according to a financial statement released on Friday.

At 9.4 per cent, expenditure rose quicker during the first quarter, data showed. The company expended $5,844,742 during the period, compared to $5,340,362 in Q1 2011.

Rising water consumption, new customers and an exchange-rate dividend accounted for increased revenues, said Ros Kimleang, chief of PPWSA’s accounting and financial department.

Increased electricity cost largely contributed to the rise in expenditure, he said.

“I do believe that we will keep growing as we maintain our good business performance,” Ros Kimleang said. “We are going to install a solar system in order to reduce the cost of purchasing electricity.”

Power expenditure accounted for about 50 per cent of the firm’s operating costs, he added.

Brokers called the company’s first financial report after its April 18 listing a reassurance to investors.

“The report showed the issuing company has transparent, accurate information. And what is important is that the revenue grew compared to the same period last year – what shareholders want to see,” Svay Hay, director of Acleda Securities Brokerage firm, said yesterday.

PPWSA closed up at $1.56 yesterday. The company has hovered just above its listing price for four days.

Along with Friday’s first-quarter financial disclosure, the retirement of PPWSA’s general director Ek Sonn Chan was announced.

Earlier in the week, the Post obtained an unofficial letter from the Ministry of Industry, Mines and Energy that outlined Ek Sonn Chan’s departure, as well as the appointment of his replacement.

Sim Sitha, former director of Sihanouk Water Supply, will take the lead role at one of Cambodia’s most carefully watched companies. Ek Sonn Chan has been approved as a special adviser to PPWSA, Ros Kimleang said.

“It is just a normal change in their management as their staff has finished his mandate of work. I don’t think it will cause any problems,” Ming Bankosal, director general for the Securities and Exchange Commission of Cambodia said yesterday.

Posted in News | Leave a comment

Piaggio to return to Cambodia with legendary Vespa scooters

Europe’s largest manufacturer of two-wheeled vehicles, Italy’s Piaggio, will return to Cambodia in September, being absent since the Khmer Rouge takeover.

Vespa Cambodia Co Ltd, part of Narith Long’s Narita group, signed an exclusive distribution agreement with Piaggio last month to distribute its Piaggio scooters, including the world famous and iconic Vespa brand.

A new state-of-the-art concept showroom is set to open in September, located near Golden Tower on Monivong. The modern-design, two-storey glass showroom will feature educational and promotional movies about Vespa, a relaxing lounge, coffee, internet access, a viewing area into the mechanic shop and the Piaggio models on sale in Cambodia.
Initially the Piaggio Liberty, Fly and Zip models will be available and for Vespa the S and LX models, both in 125cc and 150cc engine.

It is estimated that roughly 110,000 motorbikes were sold in Cambodia in 2011 – 25,000 new and 85,000 used – the market is expected to grow 20 per cent to 30 per cent a year. Presently Honda is the market leader, followed by Yamaha and Suzuki.

The Honda Dream is thought to be the current bestseller in the market and the Honda Scoopy, which has a very strong resemblance to Vespa, has been very successful since its launch in the fourth quarter of 2011.

Frederic Bachelet, head of business development for automotive activities for Narita, is aiming to sell 500 units during the remainder of 2012 and 1,300 in 2013. Given that neighboring Vietnam was able to reach sales of close to 200,000 units in 2011, the forecast for a 4 per cent market share in the new sales market seems reasonable.

Posted in News | Leave a comment

Chevron report completed

Chevron has completed an environmental assessment for oil production in Cambodia’s Block A off shore oil field, a step insiders called important for the proposed extraction that appeared to stall early this year.

The Environment Impact Assessment (EIA), completed in March and obtained yesterday by the Post, was the first to be seen publicly after chevron’s 10 years in the Kingdom. Documenting a rough three phase plan, the EIA shows chevron building up to 10 platforms during a nine-year period. Risks associated with Chevron’s potential production were listed as “low” or “insignificant”.

In October, China’s CNOOC was the first oil company to issue an EIA for exploratory drilling as required by Cambodian law. Japan’s JOGMEC followed suit in December for onshore exploration. Questions on the existence of an EIA for Chevron’s exploration have yet to be answered.
The company drilled 18 exploratory wells before announcing a commercial discovery in August 2010. It has a 30 per cent interest in the 4,709 square kilometre field.
December 12, 2012 – or 12-12-12 – was originally marked as the start date for Chevron’s production.

In a speech last year, Prime Minister Hun Sen even said he would cancel the company’s contract if production did not start on the auspicious date. Although Chevron has long answered questions on a production date by simply stating it is “continuing to work with the Royal Government of Cambodia” to reach an investment decision, a government spokesman in January said the timeframe would not be met.

In April, Chevron said it expected approval of a production permit by the end of this year. Both Chevron and the government have been silent about the reasons for delays. Chevron representatives did not respond to emailed questions yesterday. The Cambodian National Petroleum Authority declined to comment.

The completion of the EIA was “a good start for a giant company in Cambodia”, Mam Sambath, director of Development Partnership in Action, said yesterday. But questions over the oil company’s exploratory assessment are still unresolved. “We saw the exploration EIAs for the Chinese and the Japanese companies. And suddenly we see the EIA for development from Chevron. We don’t know about the exploration EIA,” he said. “We are surprised sometimes.”

China’s CNOOC last year invested up to US$200 million in an exploratory well in Cambodia’s offshore Block F. Drilling reportedly began in December.

Industry watchers labeled the Chinese operation as a good example when it completed the first EIA in October. The same held true for Japan’s JOGMEC, which completed an exploratory EIA the following month. Chevron’s EIA will be discussed at a meeting at the Ministry of Environment on Friday. Although encouraged by the assessments, civil society groups have said that they have not been given enough time to review the reports.

Mam Sambath said his organisation received the EIA last Friday, giving his team only one week to review and verify the findings.

Posted in News | Leave a comment

Investment uncertain in Myanmar

Thais and foreign investors should prepare for uncertainty in Myanmar over the next couple of years, although some positive outcomes can be expected from the ongoing reforms, say Myanmar and international analysts.

Legislation in the works includes a new banking bill that will allow full branches of foreign banks in the next year or two, plus a new labour law.

A new foreign investment law coming next month will extend the period for tax holiday.

“We have lots to do within a few years,” said Soe Win, managing director of the Yangon based consultancy Myanmar Vigour Company, The ongoing reforms, which are aimed at upgrading procedures and cutting the time for business procedures in Myanmar, will benefit foreign investors.

Soe Win spoke to members of the American Chamber of Commerce in Thailand on Friday. The half day program discussed strategies for investing in Myanmar.

Michael McGee, the commercial counselor at the US embassy in Bangkok, said rules, will change constantly there over the next four or five years.

“It is important to know whom you do business with and how,” he said, adding that old and deteriorating infrastructure throughout Myanmar is problem for doing business there.

“Make sure you’ve got a good lawyer and get good advice,” said McGee, encouraging US companies to start “cautiously by exploring business opportunities and building contacts.

US secretary of State Hillary Clinton announced in mid May the suspension of bans on US financial transactions and investment in Myanmar. As of last year, US trade with Myanmar amounted to US$48 million, said McGee.

James Finch, a partner in the law firm DFDL, said having the right partner is important to deal with the risks of doing business in Myanmar.

Foreign direct investment in Myanmar totaled US$40 million last year, 85 percent of which involves power, oil and gas.

The US-based Chevron has operated in Myanmar, partly under Unocal, for 20 years as a partner in the Yadana offshore gas field, with France’s Total the operator.

The new foreign investment law will extend the tax holiday period to five years from three, said Finch.

By reforming its sanctions against Myanmar, Washington took a significant step to normalizing relations with Myanmar. The US Treasury Department will license certain types of investment in financial services for US businesses in Myanmar.

Posted in News | Leave a comment

Philips shows growing interest in Cambodia

Electronics giant Philips demonstrated its new Air Fryer at the Attwood Business Center yesterday, illustrating Philips’s growing interest in the Cambodian market, company representatives said.

Philips is pushing its high-tech business products, and is aiming at providing quality in a market flooded with inferior quality products, said Joyce Ong, Philips sales manager for the Asia Pacific region.

“We do not want a product that is competing with Chinese products. We are a high-tech business” she said.

“We see real market potential here; for the last two years we have looked at Cambodia and we want to be number one in the market.”

Philips is aiming at Cambodia’s middle- and high-income households, which now account for “about 10 per cent” of the population, but that figure is growing rapidly, she said.

The company also has plans to move into Myanmar in the near future, and already operates in Laos, Thailand and Vietnam.

LCH Electronic, part of the LCH Investment Group, is the authorised distributor for Philips consumer electronics in Cambodia, and now covers about 60 per cent of the wholesale market for Philips in Phnom Penh, said managing director Mei Ling Phann.

“We are looking into entering the provinces such as Battambang and Siem Reap in 2013,” she said.

The Air Fryers use a combination of fast circulating hot air and a grill element to fry food without oil. Air Fryers can be purchased from Bayon Market, Chhay Ly (Central Market) and the Philips showroom at the Attwood Business Center, said Mei Ling Phann.

Posted in News | Leave a comment

Tourism in Kingdom flourishes

The number of international visitors to Cambodia continued to rise between January and May this year compared to the same time last year, data received from the Ministry of Tourism indicated.

The number of international tourists visiting Cambodia increased 26.3 percent to 1,505,734 visitors in the first five months of the year compared to 1,191,757 tourists in the same period last year.

The figure revealed that international visitors travelling by land increased by 35.7 per cent, 19.2 per cent by air and 12.5 per cent by sea. Cambodia’s tourism market may be affected by the European market because of Greek’s debt crisis. The Cambodian tourism market will be able to attract visitors from the nearby Asia Pacific and ASEAN regions, tourism minister Thong Khon said.

The growth in the number of tourists visiting Cambodia is more than was expected in 2011, which was 15 per cent.

The factors pushing the increase consist of Cambodia’s ASEAN chairmanship, international standard restaurants and more direct flights and political stability, said Ang Kim Eang, President of the Cambodian Association of Travel Agents.

Posted in News | Leave a comment