Property of the week

Thu, 19 January 2012

Located on the bustling Street 51 in Boeung Keng Kang 1, this stylish apartment block offers the best in city living, fusing traditional Khmer design with modern Western-style amenities.

The block, named Motanak, which translated means proud, opened its doors in 2007.

It comprises 17 units set over six floors. Each unit is fully-furnished, with plush furnishings and all necessary white goods.

The current rates for the one, two and three-bedroom units are US$1,200, $1,500 and $2,800 respectively.

All utility bills are included in the rent, with electricity usage the exception. The apartments are extremely secure, with 24 hour security and CCTV present. Read Original text


Value of construction approvals doubles in 2011, as demand slowly returns to the market

Thu, 19 January 2012

The value of construction approvals granted by the government authorities more than doubled in 2011, compared to the previous year, according to official figures obtained by the Post.

Some 2,129 potential projects worth US$1.7 billion were given the green light last year, compared with 2,149 construction projects worth $840 million approved in 2010, according to the Ministry of Land Management, Urban Planning and Construction.

The ministry’s Construction Department Director Lao Tip Seiha said that the ministry had improved an increasing number of larger developments, such as housing developments, industrial developments and tourist facilities, last year.

“We saw increases in the construction sector in the Kingdom’s three major economic hubs of Phnom Penh, Siem Reap and Sihanoukville,” he said, adding that larger construction projects were approved with a higher value.

Capital investment in the sector continues to increase as a result of political stability and the Kingdom’s safe investment environment, he said.

“I believe the construction sector will grow in the next few years, as foreign investment returns to Cambodia.”

With the subsidence of the economic crisis and the optimistic outlook of the property sector, other experts believe it is the right time to resume construction of stalled housing developments.

“Demand returned to the market in 2011. It’s now time for developers to restart construction projects after three years of economic downturn,” said Chrek Soknim, deputy director of property agent V Trust Property Co.

He added that the bourgeoning banking sectors increased provision of home loans would boost the real estate sector.

Previous figures from the Ministry of Land Management, Urban Planning and Construction showed that 2,230 projects worth $1.9 billion were approved back in 2009. Read Original text


Property tax collection exceeds expectations

Thu, 19 January 2012

Collections from the recently implemented property tax have exceeded government expectations by double, according to government officials.

The tax collection on properties, including land and property, has hit US$12 million since the law was passed, according to Om Chorn, deputy general director of the taxation department at the Ministry of Economy and Finance.

“We expected to collect about US$6 million in revenue from the tax through 2011, but the estimate doubled,” he said.

The surprise increase on the estimate was due to a raised awareness of how to pay the tax, he added.

The collection was conducted in 113,885 sites throughout the Kingdom according to data obtained from the tax department

“I think the law will help increase the state income, and because it’s the first tax payment of its kind, will introduce a tax culture,” Om Chorn said, adding that the majority of property owners had now paid the tax.

The law, which was twice delayed due to a lack of government resources, was formally implemented in 2011 and concluded on December 31, last year. It applies to properties worth $25,000 an above, with owners required to pay 0.1 per cent of the properties value.

Some experts believe that while the tax will benefit the Kingdom’s economy, many proprietors are unhappy with the new law since it came into effect.

“Although people are upset, they can not avoid paying required tax,” said Chheng Kimlong, business and economics lecturer at the University of Cambodia.

However, some issues do remain with the law. In some cases, two similar properties have received different valuations, he added.

“If it’s unaccountable, the state will lose this new income,” Chheng Kimlong said, adding that the progression of the economy depends on pillar sectors, such as real estate. Read Original text


A turning tide in the city by the sea

Thu, 12 January 2012
{jathumbnail}For many in the region, the mere mention of Sihanoukville evokes images of seedy, carbon-copy bars and budget guesthouses, packed with booze-fuelled western tourists after a cheap fix of sun, sand, sea and maybe a little something more. However, a number of recent developments could change the face of Cambodia’s newest city, paving the way for a potential influx of investment and a surge in the property market.

One of the main factors behind the newfound optimism in the seaside city is the re-launch of Sihanoukville Airport, with local Carrier Cambodia Angkor Air running regular flights from the Kingdom’s largest tourist destination Siem Reap. The south coast has also received international attention after entering the coveted World’s Most Beautiful Bay Club.

The expected increase in tourism will see the city emerge as an ideal investment destination, particularly at the higher-end of the market according to CBRE Indochina Chairman David Simister.

“Outside the industrial and agricultural sectors, the single easiest way to increase foreign revenue and drive the country forward is to connect the south coast beaches with the tourist market of Angkor,” he said, adding that most visitors to Angkor Wat are on a five-star level, but struggle to find appropriate accommodation in Sihanoukville.

“It’s a push-pull situation, hotel investment is waiting for the airlift and vice versa, but at least that’s started. It’s very important the Cambodian government ensures this connectivity continues to grow.”

Simister highlighted high-end tourism as a key to increasing foreign investment, which, he said, over five years has the potential to quadruple, adding that the success of Song Saa Private Island showed the interest investors have bestowed in the area.

“It has had an amazing sales record, with the highest conversion rate of potential buyer to purchaser than any project myself, and the company, has ever been involved in,” he said, adding that over 90 per cent of the project has already sold.

Song Saa, perhaps quite rightly, has been unofficially hailed as the flagship of the coast’s high-end transition, drawing an array of global plaudits and a major regional property award.

The resort, which is located in the south western Koh Rong Archipelago, is now preparing for next month’s grand launch. Conservation is at the heart of the resort with all 27 luxury villas constructed from locally-sourced materials. Prices for a one-bedroom villa start at US$600,000.

Another nearby offshore development Morakot Island will launch later in the year. Set on a 120-hectare island, the project, owned by Russian firm Koh Puos Investment Group, includes more than 500,000 square metres of residential, commercial and leisure property. The variety of villa units, which can be owned through the usual 99-year lease, start from $1.5 million.

Further down the market, major Cambodian company Thai Boon Roong Company, developers of Phnom Penh’s Intercontinental Hotel, continues its construction of Pearl City Asia.

The project is slated to include a mix of more than a thousand residences, starting at $240,000, served by a shopping mall, a school and a hospital. The company will also build hotels on the 62-hectare site, which sits in Mittapheap district, near Sokha Beach Resort.

The resort, currently Sihanoukville’s only five-star hotel, was recently extended to accommodate the increase in tourism expected from the launch of the airport.

“The airport will have a big impact on travel routes to Sihanoukville, giving people the choice to come here a beach holiday, rather than flying direct to Thailand. An increase in high-end hotels on the coast providing quality services, would be provide the perfect opportunity to take business away from Thailand,” said General Manager Friedhelm Detjen.

The 23.5 hectare resort, which opened in 2004, now boasts a total of 69 over-water bungalows and ten exclusive villas.

While Sihanoukville is amid this current sea of activity, with many smaller hotel and housing developments cropping up in the city and surrounding area, Simister stressed that the caution held by investors and demand for low-end accommodation could delay the rise of the high-end sector.

“These things are gradual, there is still much more demand for town houses and shop houses than for top-end luxury villas. Also, people these days like to see good management and a solid income, which is a shift away from investing in the luxurious pool villas, which sometimes prove economically difficult to rent out.”

There’s no doubt Sihanoukville’s property market is set to explode in the coming years given the economy remains stable, yet the question stands whether it can maintain its journey towards becoming South East Asia’s latest luxury destination and justify its entrance into the World’s Most Beautiful Bays Club. Read Original text


Mortgage loan approvals soar through 2011

Thu, 12 January 2012

The use of mortgages for house purchases increased exponentially throughout 2011, as home buyers capitalised on the nascent market, according to industry experts.

The relatively infant mortgage loan market, which came into existence in 2008, has played a key role the development of the property and construction sector, said In Siphann, ACLEDA Bank vice president and head of the company’s credit division.

“Our observations show the use of home loans services has led to an increase in house transactions,” he said, adding that transactions are still some way off hitting the figures seen during the boom peak of 2007.

ACLEDA Bank statistics showed that it provided some 3244 mortgage loans, worth US$75 million in the first 11 months of 2011, a 30 per cent year-on-year growth.

“We give mortgage loans for up eight years, providing clients with loans up to $7 million,” In Siphann said.

He added that the ACLEDA Bank also offer others services loans which totalled$160 million with it provided some 116,000 customers for the first eleven months of 2011.

Still, some industry experts and economists believe interest rates, which are currently capped at 15 per cent, need to be reduced and applications requirements eased.

Cheng Kheng, managing director of Cambodia Properties Limited told the Post that while continual growth and involvement from the banking sector boosted investment in the property market through 2011, some amendments are still needed.

“The increase in the number of banks provides customers with more choices, especially for home loans, however, the banks still require a lot of documents and offer high interest rates,” he said, adding that if rates were reduced more local and foreign investors would be willing to take out loans.

Cheng Kheng noted that a number of foreign investors, primarily from Japan, Malaysia and Vietnam, re-entered the market through 2011.

Plong Sophandy, administrative manager of housing development company Borey Delta Garden echoed these sentiments.

“If the banks can ease up on the [loan] requirements, clients will have more of a choice regarding what sort of house they can own,” she said.

Although the property sector continues to recover from the economic downturn, it remains at the mercy of major industries, according to Chheng Kimlong, business and economics lecturer at the University of Cambodia.

“The [regional and global] state of the banking sector and oil prices will push real estate and construction activities, as it did pre-financial crisis,” he said, adding that these factors determine the stability of the industry. Read Original text


At last, a central gathering point for all things property and real estate

Thu, 12 January 2012

As the most progressive newspaper in this country we have great pleasure in launching ‘Post Property’ – our new weekly property section. At last, a comprehensive central point for all news relating to the buying and selling of property, trends and analysis in real estate and the latest in building, design and décor.

Ideologically we have underpinned it by advocating transparency in the real estate business and we hold firm in our desire to protect the interests of our readers first and foremost.

For too long the cowboy image in real estate has helped feather the nests of shady and crooked real estate players. The ‘little man and his family’ seldom had rights and the industry had no vehicle in which to see bad practice exposed.

Post Property’s special 36 page expose on the sector kick starts the weekly liftout to appear every Thursday as a dual language product complemented by a comprehensive internet presence through www.post-property.com.

It is our intention for the site to become the national real estate portal.

We’ve invested in this project precisely to cater to a fast maturing business sector and it is our hope that it will become a ‘must read’ for Khmer and foreign readers alike. We’ll also form relationships with regional property publishers so that the message of Cambodian property spreads far and wide.

As the real estate market enters into an upward cycle the emergence of Post Property is timely. In this fast paced world having quality information at your fingertips is essential to stay ahead.

Post Property has its own dedicated team, led by two editors with extensive exposure to real estate – Liam Barnes and Soeun Say.

And as a full service publisher we give economies of scale that others cannot and are motivated to provide cost effective, productive solutions for our advertisers.

Part of that commitment is making ourselves available at all time to our advertisers, from the publisher and CEO, down to the editors, reporters, sales executive, we are determined to understand fully the business that is real estate.

Post Property is set to become a powerful mouthpiece for the sector, where agents, developers and others have a strong voice of influence, sometimes a unified voice to pressure decision makers.

Our independence also is sorely needed. Some agents produce amateurish magazines and other literature which lack credibility and little accountability. These products lack professionalism and quality. From the public’s perspective the result is a bewildering array of promotional material.

At The Phnom Penh Post we’ve committed our considerable resource into creating an international quality stand-alone property section.

We urge all to support the product. It helps sustain and grow the sector and it will have no hesitation to expose corruption and bad practice. It will encourage creativity and efficiency and praise those who can contribute in a worthwhile way.

Please enjoy Post Property! Read Original text


At last, a central gathering point for all things property and real estate

Thu, 12 January 2012

As the most progressive newspaper in this country we have great pleasure in launching ‘Post Property’ – our new weekly property section. At last, a comprehensive central point for all news relating to the buying and selling of property, trends and analysis in real estate and the latest in building, design and décor.

Ideologically we have underpinned it by advocating transparency in the real estate business and we hold firm in our desire to protect the interests of our readers first and foremost.

For too long the cowboy image in real estate has helped feather the nests of shady and crooked real estate players. The ‘little man and his family’ seldom had rights and the industry had no vehicle in which to see bad practice exposed.

Post Property’s special 36 page expose on the sector kick starts the weekly liftout to appear every Thursday as a dual language product complemented by a comprehensive internet presence through www.post-property.com.

It is our intention for the site to become the national real estate portal.

We’ve invested in this project precisely to cater to a fast maturing business sector and it is our hope that it will become a ‘must read’ for Khmer and foreign readers alike. We’ll also form relationships with regional property publishers so that the message of Cambodian property spreads far and wide.

As the real estate market enters into an upward cycle the emergence of Post Property is timely. In this fast paced world having quality information at your fingertips is essential to stay ahead.

Post Property has its own dedicated team, led by two editors with extensive exposure to real estate – Liam Barnes and Soeun Say.

And as a full service publisher we give economies of scale that others cannot and are motivated to provide cost effective, productive solutions for our advertisers.

Part of that commitment is making ourselves available at all time to our advertisers, from the publisher and CEO, down to the editors, reporters, sales executive, we are determined to understand fully the business that is real estate.

Post Property is set to become a powerful mouthpiece for the sector, where agents, developers and others have a strong voice of influence, sometimes a unified voice to pressure decision makers.

Our independence also is sorely needed. Some agents produce amateurish magazines and other literature which lack credibility and little accountability. These products lack professionalism and quality. From the public’s perspective the result is a bewildering array of promotional material.

At The Phnom Penh Post we’ve committed our considerable resource into creating an international quality stand-alone property section.

We urge all to support the product. It helps sustain and grow the sector and it will have no hesitation to expose corruption and bad practice. It will encourage creativity and efficiency and praise those who can contribute in a worthwhile way.

Please enjoy Post Property!


Recovery on the way after a positive 2011

Thu, 12 January 2012
{jathumbnail}After nearly two years of rock-bottom real estate prices, Cambodia showed its first real signs of recovery from the global financial crisis as sales climbed and foreign property investors returned to the Kingdom in 2011.

The sector was also buoyed by the launch of major developments such as Phnom Penh Tower and Mekong Garden, as well as by improved economic conditions overseas. Sales, however, are still far below prices seen three years before.

Property investments continuously dropped from US$3.19 billion in 2008, to $1.99 billion in 2009, and eventually plummeted to $840 million in 2010, according to the Ministry of Land Management, Urban Planning and Construction.

Land values in Phnom Penh were about 50 per cent down on their peak values in mid-2008.

“The market is some way off hitting the peaks experienced in 2008 - we expect this recovery to continue step by step,” Sung Bonna, President and CEO of Bonna Realty Group said, referring to the price speculation witnessed prior to the economic downturn.

There was an increase in transactions in the market, due to the return of some foreign investors, who have started to develop purchased properties immediately, unlike in previous years, he added.

Average daily transactions hit 30 units in Phnom Penh, a yearly increase of about 10 per cent, while the estimated price of residential and commercial property remained unchanged from 2010, hitting US$2,000 and $4,000 respectively, according to Bonna, who is also president of National Valuers Association.

Although property prices remained flat and the sector continues to recover at a slow pace, the Kingdom’s bourgeoning economy did encourage additional foreign companies to enter the market, last year, according to CBRE Indochina Chairman David Simister.

“The reassuring news in the region, particularly Cambodia, is that there is real growth. This doesn’t mean there is excess demand for office space, or values and rents are spiralling, but what we have seen is new entrants coming into the market.”

Major property developer Hongkong Land and Japanese retail firm Aeon Mall Co entered the real estate market last year, while Tesco and Prudential Manulife are now present in the office market, said Simister.

The market and the economy is poised to professionalise and offer quite a range of opportunities to market entrants, he said, adding that he expects the entrance of companies, such as Hongkong Land to be a road sign for other firms in the region.

Progress was also seen in the construction sector, with approvals soaring 158 per cent year-on-year through November. A number of major developments, such as the US$50 million De Castle Royal Condominium resumed construction, in addition to some smaller housing projects, mainly in Phnom Penh.

“The current market offers great opportunities for housing developers to profit [given the stable land prices]. Everybody can see that the sector is -improving,” said Cambodian Real Estate CEO Cheng Kheng, adding that the company saw an estimated 15 per cent growth in business transactions and increasing investment in the construction sector.

He added that the return of international developers, especially from China, Japan, Malaysia, Russia and the US, showed positive signs for the sector,” he said.

However, Cheng Keng called on new developers and existing members of the sector to show more transparency in light of the problems surrounding projects such as Gold Tower 42 and Camko City.

“If, in the future, companies cheat clients for excessive profit, it will damage the country’s image and potential investor confidence. If there is a safe investment climate, we can attract further clients.”

The recently drafted Housing Development Law, slated for implementation in the third quarter of 2012, is expected to instil further openness in the sector, he added.

Some analysts believe that while the increase in construction projects last year show positive signs of recovery, developers needs to be wary of oversupplying the market.

“There’s a danger that in one to two years there will be an excessive supply of high-end housing and office space, with many developers only focusing on this end of the market,” said Douglas Clayton, CEO of private equity firm Leopard Capital.

He added that while foreign investment was slowly returning to Cambodia, the recovery will be gradual, paving the way for more domestic investors to enter the market. Read Original text