Warehouse rental market stable on-year, set for year-end boost
WAREHOUSE rental demand and prices have remained similar at similar levels of those in the year-ago period as Covid19 vaccination campaigns in Cambodia and around the world set a positive tone for the market, according to industry experts.
Amatak Property Service Co Ltd CEO Tang Hour told The Post on February 24 that warehouse rental demand is holding strong, with the instalments predominantly used for commodity storage and running businesses such as restaurants and car dealerships for the most part.
“Even though the market continues to breeze through, some warehouse owners have taken to offering rent discounts for the first few years” of occupancy, she said.
Hour chalked up the pandemic’s limited shock to the market – compared to the condominium and apartment segments – to its lower dependence on the number of international visitors travelling to Cambodia.
She said the average monthly rent for warehouse space in Phnom Penh ranges from $2-5 per square metre, dependent on location and the condition of the facilities. Leasing contracts have an average length of five years.
On the flip side, Grace Rachny Fong, executive director of Century 21 Cambodia, the master franchisor of US-based
Century 21 Real Estate LLC in the Kingdom, pointed out that rental prices in the provinces continue to depreciate.
She said market recovery overall has been rather sluggish but is set to pick up steam by the end of the year.
According to Fong, warehouses over 1,000 square metres typically have the highest demand.
“The market will be bustling from the fourth quarter of 2021, as Covid-19 vaccinations increase the number of investors from each country. Once investment grows, demand for warehousing will shoot up as well,” said Fong.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, previously told The Post that Covid19
vaccine rollouts around the world have led to a rise in the number of investment projects approved by the Council for the Development of Cambodia.
They have also spurred work on bilateral agreements with trading partners and incentivised construction of new infrastructure – including on the Kingdom’s flagship deep-sea port in Preah Sihanouk province, he claimed.
This, he said, will buoy Cambodia’s demand for warehousing, especially from mid-2021 onwards.
“All investment projects require warehousing, hence the market will enjoy a snowballing in demand, especially once the Covid-19 disease situation comes completely under control,” Vanak said.
CANADIAN Prime Minister Justin Trudeau on February 23 called the country’s friendship with its southern neighbour “extraordinary”, while US President Joe Biden declared the two nations best friends in a virtual meeting turning the page on the turbulent Donald Trump era.
“The United States has no closer friend than Canada,” Biden said, setting the tone for the get-together conducted by video link between Trudeau’s office in Ottawa and the White House.
Although Covid-19 restrictions kept the two leaders apart physically, they went out of their way to demonstrate that the giant neighboring countries are back to their traditional closeness after the tension of Trump’s “America First” policies.
“We have a robust agenda today and we’re all best served when the United States and Canada work together and lead together,” Biden said in public remarks before heading into closed-door talks.
Repaying the compliment, Trudeau said they would work “together to get through Covid but also to make sure we’re pulling our weight around the world and making the world a better and safer place for everyone”.
Trudeau thanked Biden – who has put the US back into the Paris climate accord on reducing global carbon emissions – for his policies on global warming.
“US leadership has been sorely missed over the past, uh, past years,” he said in a
not so hidden dig at Trump.
The White House is touting that February 23’s extensive talks will provide a “roadmap” for better relations.
Trump, who recategorised Canada and other US allies as competitors, had a sometimes tense personal relationship with Trudeau.
By contrast, Trudeau was the first foreign leader to phone Biden after he won the November election and Trudeau was the first foreign leader the Democrat called after getting into the Oval Office.
The White House emphasised
how Canada-US ties play an important role in multilateral settings, from the G7 to NATO, the Five Eyes intelligence alliance and the WTO.
But while Canada is looking forward to more predictable behaviour from its largest trading partner, Biden has already introduced his own new source of friction by cancelling the cross-border Keystone XL pipeline project, citing environmental concerns.
Trudeau and Biden said they addressed several mutual priorities, including climate change and revving up the
North American economy.
Trudeau’s office said: “By being on the same line on several subjects, like climate change or economic revival, we can do more together.”
One area Trudeau and Biden did not comment on in the public portion of their remarks was the US decision to cancel the permit for the Keystone XL pipeline, a project fiercely opposed by environmentalists but backed by Ottawa and previously by Trump.
Biden rescinded the permit by executive order on his first day in office.