Phnom Penh Marketview for Q2 2021

08 July 2021
Q2 2021 Phnom Penh Marketview

Phnom Penh Marketview for Q2 2021 | CBRE Cambodia provides an update to real estate market performance over the second quarter.

Q2 2021 was defined by the impact of the country’s worst outbreak of COVID-19 and the government’s impressive vaccine rollout, with full inoculations now at 19.9% of the population.

If the vaccine rollout proves effective, Cambodia’s economy will slowly start to recover through increased confidence and improved mobility, compounded by a solid rebound in the Chinese economy. Recovery in the West may buoy the nation’s emerging manufacturing base, as consumption rises and global lockdowns ease. Although questions remain as to how much capacity remains following a volatile year.

Inbound tourism remains non-existent due to travel bans, quarantine requirements and social-distancing measures. Cambodia is watching Thailand’s ‘sandbox’ of Phuket with bated breath in the hope high vaccination numbers can provide a route to tourism recovery.

The World Bank (WB) and AMRO’s 2021 GDP growth forecasts remain positive, at 4.0% and 4.7%, respectively. AMRO’s forecast moved downward from its original 2021 forecast of 5.2%.

The figures for approved investment into construction showed a downward trend over H1 2021 – due to the uncertainty of the past year. Compared to the same period in H1 2020, the number of approved projects decreased 27%, whilst the value of those projects fell by 39% (H1 2021 data: Year to May 2021).

Office: The office market witnessed a resurgence in deal volumes, which helped to encourage a moderate bounce in rental rates for some segments of the market. Four projects completed over the quarter, adding 46,200 square meters of space to total supply.

Retail: Reduced footfall and disruption to consumer spending added to the retail sector’s woes in Q2. Rental rates dropped by between 3.2% and 9.3% Q-O-Q within organised retail centres. Nevertheless, two projects completed in Q2, adding 10,000 square meters to total supply.

Condominium: A number of projects delayed their completions in 2022, reducing the forecast supply for the year. One project completed, adding 480 units to total supply. Prices came down, falling 9.1% for High-End condominiums, and 4.9% for Affordable condominiums.

Read the full report here: Phnom Penh Marketview for Q2 2021