Property of the week

Thu, 16 February 2012
Situated on one of the capital’s main roads Norodom Boulevard, Embassy Place apartment building offers one, two and three-bedroom apartments set over four storeys.{jathumbnail}

;The Western-style apartments are fully-furnished, with plenty of natural light and good ventilation. Included in the complex is an impressive swimming pool and a spacious garden, making it ideal for entertaining.

The central location of the block means all necessary amenities, such as banks, supermarkets and restaurants, are a stones throw away. The one, two and three-bedroom units are on the market for US$2,050, $2,450 and $2,900 per month respectively. Read Original text


Talking innovative interior designing

Thu, 16 February 2012
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Stephane Dawant, CEO and designer of iChing Decor in Phnom Penh.

Established in 2003, iChing Decor has risen to stellar heights in Cambodia’s interior design and furniture manufacturing game; leading the company’s ascent is CEO Stephane Dawant.Overseeing a team of ten, Dawant pins part of the company’s success on understanding what their private and commercial clients need. This might involve the innovation of single furniture items to large-scale building remodelling.

Dawant’s background in civil engineering as well as his 16 year tenure as a Cambodian resident has held him in good stead to transform IChing Decor into a leading national player in Cambodia’s property sector. The majority of IChing’s clients are Cambodian which has helped the company to flourish despite the anaemic global economy causing property prices to fall, subsequently rendering some companies in the sector bankrupt. But with 10 large projects already lined up for 2012, the harsh financial reality for some companies is peripheral to IChing’s continuing success. This doesn’t mean IChing has room for complacency; Dawant admits he’s concerned about the growth of competitors in the market.

Part of IChing’s business strategy involves not expanding the company or exporting its goods internationally. This might seem counterintuitive to other game-players, but IChing’s big boss is content meeting the demands of the growing local circle of interior design and property construction enthusiasts. In fact Dawant concedes that maintaining the company’s reputation for aligning the needs of their Cambodian clients with a quality finished product is their highest priority.

Contributing to the stimulation on the Cambodian economy, IChing sources 80 per cent of its raw materials from local carpenters. The remaining raw materials are imported from Vietnam and Thailand.

However, if Cambodian customers request international materials to be used in their designs, IChing will facilitate the import of necessary goods to complete their clients’ projects.

Interior design costs for one house range from US$4000 to $5000 and the operation takes approximately two months to complete. If buyers bundle the designs with other IChing services, then they shall receive a discount. Read Original text


Advertising in the sector sees gradual increase in 2011

Thu, 16 February 2012

Construction and engineering advertising increased 19 per cent year-on-year in 2011, according to data from Indochina Research Ltd, making it the eighth most invested area in Cambodian advertising.

Construction and engineering companies spent about US$3,894,000 on advertising in the Kingdom through 2011, while accommodation companies, such as hotel and commercial property firms, spent $3,181,000 in the same period.

The amount spent on construction, engineering and accommodation advertising equated to 7 per cent of the total annual expenditure, the figures showed.

The growth in advertising over the last 12 months is a result of the increasing number of developments which have resumed construction in the period, according Asean Real Estate Vice President Keuk Narin.

While many companies have increased advertising campaigns, some projects are still struggling to sell units, he said.

“Houses in some developments are facing poor sales records, while others succeed,” Keuk Narin said. “The difficulties in selling are due to location, price and quality.”

He added that strong advertising campaigns don’t always translate into sales.

Phnom Penh-based project Chey Chumnah Borey continued a strong advertising campaign in 2011, but sales remained sluggish, according to Marketing Manager Sok Channa.

He highlighted the oversupply of housing developments in the capital as key factor behind Chey Chumnah Borey’s poor sales performance last year.

“Along with all the advertising, we even offered discounts and five year instalment schemes,” he said. “Hopefully it will pick up in the next few years.”

Sok Channa refused to disclose the company’s marketing budget.

Some companies, however, said they had benefited from marketing in the media last year.

“We attracted new customers to our project through advertising in the local newspapers and magazines,” said Kiev Sey Ha, deputy marketing manager of the Pengly Borey development.

He added that about 70 per cent of the units, priced between $30,000 and $100,000, have now sold. Read Original text


Thu, 16 February 2012
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A view of Young’s Commercial Centre in Chroy Changvar.

Since the advent of Cambodia’s first shopping mall Sorya Shopping Center in 2002, numerous western-style retail complexes have emanated in Phnom Penh providing an alternative shopping destination to the capital’s traditional markets and roadside outlets. A Chroy Changvar-based mall is set to be the next major entrant into this expanding market, with the launch date slated for August, the project owner said this week.Young’s Commercial Centre, which is part of the Happiness City development being built on reclaimed swamp land about 100 metres east of the Cambodian-Japanese Friendship Bridge, will comprise approximately 500 units, said Managing Director and owner Ear Kim Keng.

While the project has faced issues in recent years, construction is now 80 per cent complete, he said.

“We were affected by the economic crisis like everybody else, but construction never stopped,” he said.

The 30,000 square metre shopping mall, in addition to the retail units, will include leisure space. According to Ear Kim Keng, local entertainment service provider Happy Land Amusement Co has leased an entire floor – 5,224 square metres – on which it plans to open an entertainment complex, including the Kingdom’s second 3D cinema.

He added that the project will also boast a state-of-the-art 2,300 square metre water park.

“The shopping mall will be different from our competitors because we will have Cambodia’s best water park and other leisure facilities, which will attract both children and parents.”

About 70 per cent of the of the development has already been rented by clients including KFC, Pizza Company and Swensen’s, said Ear Kim Keng, adding that he expects the mall to attract further overseas investors.

Rental prices at Young’s Commercial Centre vary from US$10 to $22 per square metre, depending on location, however, he said that he doesn’t anticipate any difficulties in attracting more companies and customers.

“We are located in a prime development zone, with many new projects set to be constructed in the surrounding area,” he said, referring to the nearby OCIC City of the Future development.

“Another bridge over to the peninsula is also set to open next year, which will increase the number of visitors to the area and attract customers to our mall,” Ear Kim Keng added.

Some industry experts, however, said that the mall, located on the outskirts of the city, may initially struggle to attract customers.

“It [the mall] could work as a specialised market, but in terms of general shopping, time will tell,” said Knight Frank Country Manager Sunny Soo.

He added that there is still room for successfully run Western-style shopping malls in the sector, while the standard of some of the existing projects could be improved.

“It’s very apparent that a lot of [high-end] brands are not in the market,” he said. “In terms of real [Western-style] malls, we are only talking about Sorya Shopping Center and City Mall.”

Hung Chuang Ming, general manager of City Mall, the latest of the city’s shopping complexes, said that the new mall on Chroy Changvar is not a serious form of competition when compared to the great number of small shopping venues spread throughout the city.

Competition is fierce because of the availability of goods at all prices, at venues just about anywhere in the city, he said.

“There’s simply too much stuff for sale in this market. And the stuff is all the same,” he said, adding that markets for fast-moving consumer goods were not necessarily concentrated in shopping malls, but every street in city.

While the majority of upscale malls claim to focus on attracting local clients, Japanese developer Aeon Mall Co said this week that it expects to attract overseas tenants, especially from Japan and ASEAN countries.

The development, which is slated to begin this year, will comprise about 150 units, according to a company representative.

“Cambodian customers can experience a Japanese-style shopping mall, which will develop new demands,” he said, adding that the project is set for completion in 2014. Read Original text


Talking architecture with Cambodia’s youth

Thu, 9 February 2012
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Chan Sim, a locally renowned architect, exhibited some of his work and present the students

Local architectural company Architecture House Group held a workshop on ‘The Concepts Towards Success’ last Thursday.Presented by group president Puth Supha, the aim of the workshop was to teach attendees about the history of Khmer architecture and the importance of valuing and reinventing Cambodian building designs rather than focusing Western or European styles.

“I want to share my experiences and transfer my knowledge to the next generation of Cambodian architects, so that they are acutely aware of what Khmer architecture is and how it can be transferred to a modern setting,” said Puth Supha.

The Phnom Penh-based firm wants to show the rest of the world how competent, advanced and aesthetic Cambodian building designs have become.

The workshop was also attended by fellow industry experts and lecturers, who offered presentations. Chan Sim, a locally renowned architect, exhibited some of his work and gave the students studying techniques so that they may strive for a similar high standard when designing Cambodian buildings. Read Original text


Phase one of Elite Town set for completion in Q3 2012,

Thu, 9 February 2012

The first phase in the construction of the US$100 million Elite Town has been slated for completion by the third quarter of 2012.

Construction has now also started on the second phase, which will comprise 100 two-storey units, according to Touch Samnang, project manager and architect of Elite Town’s developer Overseas Cambodia Investment Corporation.

“We are rushing to complete phase two by mid-2013, we’ll then move on to phase three, which should be complete in three to four years,” he said, adding that he expects the Koh Pich Island-based project to attract middle-class businessmen.

Since the Kingdom’s property sector started to pick up last year, the sale of villas has increased dramatically, said Touch Samnang.

“We have sold about 80 per cent of the units in phase two, and all the buyers have been Cambodian nationals.”

Villas in the second phase, of which 60 per cent have been completed, will be priced between $600,000 and $1 million.

Construction of the project, which is part of the 100 hectare Diamond Island development, is set for completion in 2016 and will consist of four phases.

OCIC, however, is determined to push the project through ahead of schedule, according to Touch Samnang.

“Although we experienced the downturn in 2009, we have continued to invest in the construction of this project, which is of a very high standard.”

Some members of the sector have welcomed the construction of another residential development.

“The number of villas which have already sold shows that the project will succeed in the future,” said Chheng Keng, director of real estate company Cambodia Property Limited.

He added that the development will attract an array of both domestic and international investors, due to its prime location on Koh Pich Island.

“Illegal operations will impact the image of the industry and deter local and foreign investment. In order to maintain credibility, companies need to comply with the existing rules,” according to National Valuers Association President Sung Bonna.

He added that firms risk the chance of closure, if, after being reported to the media, they fail to register.

While most companies agree the law provides more transparency, some are struggling with the legal intricacies.

The application for the licence is more complex than in previous years, according to Dith Channa, managing director of VMC Real Estate Cambodia.

“Although the law is now more complicated, with many more stages to complete in a shorter period of time, we still support it,” he said. Read Original text


Office space market feels the squeeze

Thu, 2 February 2012
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Supply of office space continues to surpass demand in Phnom Penh, adding pressure to an already shrinking rental market, with rates down nine per cent through 2011, industry experts said this week.

Increasing office space for rent in the capital last year resulted in cut prices, Keuk Narin, vice president of Asia Real Estate Cambodia told the Post.

“There’s an increasing number of competitors entering the office space market, which remains fairly small,” he said. “Prices will continue to fall because the supply is much more than the demand.”

Grade-A office space monthly rents peaked at US$21 per square metre last month, down from $23.5 in 2010, while the average occupancy rate through 2011 was about 68 per cent. Rental rates in B-grade offices are currently estimated at $11 per square metre, down from $13, with an average occupancy rate of about 80 per cent, Asia Real Estate Cambodia figures showed.

The declining rental prices, however, have started to attract a new influx of foreign companies, according to Keuk Narin.

“From the middle of 2011 we saw an increasing number of investors rent office space, hailing primarily from China, Singapore, Malaysia, Korea and Vietnam,” he said.

Among those commercial properties to benefit from the returning investors was Overseas Cambodia Investment Co’s Canadia Tower.

The grade-A office space, home to Cambodia’s stock exchange, experienced a five per cent occupancy increase in December, alone, according to Marketing Manager Pen Phyrun.

“The entry of a significant number of Japanese companies, investing mainly in agriculture, spurred the occupancy rate recently to reach 90 per cent,” he said, adding that occupancy started to grow in the second half of 2011.

Cambodia’s only other A-grade office space Phnom Penh Tower also experienced a growth in occupancy rate, with more than 50 per cent of the tower occupied, yet the number of new entrants slowed towards the end of the year, said Hong Youvoin, marketing manager of Hyundai Amco, the tower’s construction firm. He believes, however, that the tower will attract additional clients over the next 12 months.

“Our target is a 70 per cent occupation rate by the end of the year and, with the rate at which Cambodia’s economy is growing, we believe that this is achievable,” he said, adding that the average rent for office space is between $19 and $22.

While only about 34 per cent of Phnom Penh’s office space is A-grade, more competitively priced options have struggled with the slackening of demand in recent months.

Chheang Meng, general manager for Phnom Penh’s Bayon Building Center said he had slashed the asking price for office space to $9 per square metres, but the centre was still failing to attract interest.

“Last year, we reduced the price to $15 per square metre, but there was a lack of demand, so this year I reduced it further, but still nobody is interested,” he said. “We cannot lower our prices anymore.”

According to the Asia Real Estate Cambodia report total office space in Phnom Penh is currently 160,000 square metres, an 18 per cent increase compared to 2010. The report estimated that about 17,565 square metres, housed in two office buildings, will enter the market in the coming two years, accounting for 10 per cent of total future supply.

CBRE last year estimated that office space in Phnom Penh could reach 200,000 square metres in 2013 if the majority office stock slated for development in completed. Read Original text