Apartment demand falters in Q3

Thu, 31 October 2013

4_More-apartments-are-rising-in-Phnom-PenhThe apartment rental market was flat in the third quarter after strong growth earlier in the year, with oversupply and political tensions among the causes blamed by realty experts.

Chrek Soknim, deputy director of VTrust Property Co, Ltd, said that growth has stagnated after the January-March period saw a quarterly rise of up to 15 per cent.

“The decrease in demand in the third quarter had only one reason: the uncertainty of the political situation,” Soknim said.

Soknim added that a Class-A apartment in Phnom Penh with one room currently has an average monthly rental price of between $1,500 and $1,700, with two rooms costing $1,500-$2,000 and three rooms $2,000-US$5,000. A Class-B apartment with one room is priced at $500-US$1,300 per month, with two rooms $650-$1,500 and three rooms $700-$2,500. A Class-C apartment with one room costs less than $500 per month while with two rooms is $400-$700.

However, Po Eavkong, managing director of Asia Real Estate Cambodia Co, Ltd, rejected Soknim’s appraisal of the situation. The political crisis did not significantly affect the apartment rental market because a stream of foreign investors all requiring living quarters continued to enter the country, Eavkong said.

Asia Real Estate Cambodia saw apartment demand jump about 10 per cent in the first quarter, he said, and conceded that there was a slight decline in the third quarter.

Finding clients for apartments in districts such as Chamkarmon and Daun Penh has not been a problem, Eavkong said, but added that some areas on the outskirts of Phnom Penh like Tuol Kok and Boeung Tum Pun districts are proving more difficult, with vacant apartments accounting for up to 30 per cent of some residential buildings.

Part of the cause of the high vacancy rates in Chroy Changvar and Tuol Kok has been attributed to a recent influx of newly constructed apartment complexes.

KEY Real Estate Co, Ltd general manager Sorn Seap said his agency has not experienced a fall in demand, but also not a surge.

Noun Rithy, general manager at Bunna Reality Group Co, Ltd, sounded a more optimistic tone, saying that although the scene is rather quiet at the moment, his firm has seen a rise of some five to 10 per cent in the third quarter. Average rental prices have also risen, he added.

“The apartment market still has high potential despite supply exceeding demand to some extent,” Rithy said.

Many global investors are looking to put their money in countries that will be a part of the Association of Southeast Asian Nations economic community, which hopes to fully integrate participating countries – including Cambodia – by 2015, according to Rithy.

“Furthermore, I believe that the large apartment supply we are seeing now is not a problem, as the government has policies in place offering incentives to foreign investors and those who want to come to live in Cambodia.”Read Original text


Flood crisis another setback for real estate sector

Thu, 24 October 2013

16_Many-people-in-rural-areas-have-been-inundated-with-waterWhile the political crisis in the country is still ongoing, Cambodia is now suffering another crisis due to flooding, which has had a big impact on the country’s real estate business.

Kim Heang, the President of Khmer Real Estate, said the buying and selling of real estate has slowed because some areas have been so flooded they have become lakes.

He said that some customers were interested in buying land they had looked at before the floods hit, but now that land had turned into a lake, so potential buyers were backing away from any purchases.

He added that the flooding has had a lot of impact on the real estate market, even causing traffic jams and making it difficult to travel around. Residents living along Preah Monivong Boulevard have also starting complaining about traffic jams and flooded roads.

“The flooding crisis is seriously affecting the real estate sector because this time no one is interested in going to see land,” he said.

Dith Channa, the General Manager of VMC Real Estate, said the sector has been suffering from the flooding crisis.

He added that while the political situation has not yet improved and with the current flooding crisis, the real estate industry has been seriously affected and it is difficult to predict when the sector will improve, especially if there is not quick end to the political problems.

Po Eav Kong, the Managing Director of Asia real Estate Cambodia Co, Ltd, said there are two major crises in Cambodia at present, and politics is the most serious one.

He said some land buyers and sellers were waiting for the floodwaters to recede and his customers who intended to buy land along National Road 6 have also put things on hold until the situation improves.

Eav Kong said: “The effect on buying and selling still continues, although a new government has already been formed, but the other political party is still protesting, which makes investors think a lot and they are not confident that things will return to normal at this stage.

“However, some investors who know the country well are still continuing to invest as they did before, but new investors are holding off.”

Kuy Vat, the President and CEO of Vtrust Group, said he could not make an assessment immediately on the effects of the flooding, but added that real investors are seizing this opportunity because at this time they can bargain the prices down.

Cheng Kheng, the Director of the CPL real estate company and president of the Cambodian Valuers and Estate Agents Association, said the flooding is a concern for Cambodia because in the past flooding had badly affected Thailand, while Cambodia was not seen as being seriously affected.

But this time the flooding is causing a detrimental effect on Cambodia and even though it has not affected the various industrial zones, the agricultural sector is being seriously affected.

“The real estate sector has been affected only slightly because Phnom Penh and various industrial zones have not been affected seriously,” he said.Read Original text


New highway to run through Boeung Tompong

Thu, 17 October 2013

5_A-worker-walks-along-what-will-soon-be-a-new-road-aimed-at-cutting-back-traffic-conjestionA new highway that is being built is expected to not only reduce traffic jams, but to also open up a large area for real estate development.

The new highway, called Samdech Techo Hun Sen Blvd, runs from the intersection of Road 271 and Monivong Blvd to National Road 2 at Prek Kampis, and some initial work has already started.

An employee of ING Holding Co, Ltd, a subsidiary of AZ Group, who asked not to be named, said the new highway is to help reduce traffic jams along National Road 2. The new road will be one-way with a park in the middle and will run for 9.16 kilometres and be 60 metres wide.

The employee did not know how much capital had been put into the project or when it was expected to be completed.

“It is to avoid traffic jams between Phnom Penh and Takhmao, because in the Chak Angre area along National Road 2 to Takhmao there are traffic jams every day, so when this road is completed there would be no traffic problems,” he said.

“My company has a development plan for the real estate in this area as well, but I do not know when that project will start.”

Long Dimanche, the spokesman for the Phnom Penh’s City Hall, and Sang Piseth, the director of Phnom Penh’s Department of Public Works and Transport, and Kim Borey, the general director at the Ministry of Public Works and Transport, refused to comment on the projects.

However Kuch Chamroeurn, the governor of Meanchey district, said work on the road had not yet started and he refused to talk about the road and the development in the area.

A reporter from the Post who recently visited the area said there was some machinery doing work there and that some construction work had started.

Kim Heang, the president of Khmer Real Estate Co, Ltd, said the construction work is good because it shows the strength of real estate in Cambodia, particularly for land in this area.

The construction work sends a signal to both national and international investors about the strength of infrastructure in Phnom Penh and also the strength of the property market in Cambodia.

Po Eav Kong, the Managing Director of Asia Real Estate Cambodia, said: “If this road is completed fast and well, it will contribute positively to the development of the real estate sector in Cambodia, because I heard that AZ Group plans to build many residential projects in that area.”

He added that although this project has not yet been publicised, he knew the company already had a master plan for the development. The company does not want to leak any information, he said, which may make property owners in the area demand higher-than-the-market prices.Read Original text


OCIC ready to construct more condos on Koh Pich

Thu, 10 October 2013

5_A--view-of-Koh-Pich,-the-site-of-the-Casa-Meridian-Condo-developmentOverseas Cambodian Investment Corporation (OCIC) is ready to build two more 30-storey buildings in the Casa Meridian Condo development on Koh Pich (Diamond Island) in the near future.

Om Bun An, sales manager of Casa Meridian Condo, said construction on the two condos will start at the end of the year. Each building will be 30 storeys high, have an underground car park, 188 units and 16 shop houses.

She added that the condos will be completed by the end of 2016. Part of the project is to build another butterfly bridge linking the Sofitel Hotel to Koh Pich.

“The company is developing this now because it sees a need in the condo market,” she said. “I believe the projects will be a success due to Cambodian laws authorising foreigners to own a place from the first floor up as well as conditions provided by the companies.”

The price of a Casa Meridian condo will range from $80,000 to $600,000 per unit.

Om Bun An said there are three things that make her company confident about the project’s success.

“First off, we installed quality materials. Secondly, the glass in the condos are wind-proof and sound-proof. Finally, the project is in a great location with plenty of fresh air.”

Kim Heang, the president of Khmer Real Estate Co, Ltd, said demand for condos is greater than the number available. But he added that it can still be difficult to find buyers as the majority of Cambodians have yet to adapt to living in condos.

However Kuy Vat, the president and CEO of VTrust Group, said that while local people are less interested in living in condos, most of the customers are foreigners who are looking for an investment and who also prefer living in condos. Vat predicts that Cambodians will soon change their habits and start to buy condos as the city expands.Read Original text


Warehouses enjoy surging demand

Thu, 10 October 2013

2_Rising-demand-means-rising-profit-for-those-renting-out-warehouse-space-in-Phnom-PenhThings are looking up for the capital city’s warehouse rental market, with demand increasing significantly and prices rising about 10 per cent so far this year.

Economic growth is driving the demand for goods storage facilities, especially in Phnom Penh and on the outskirts of the city in areas such as Stung Meanchey near Northbridge International School, Veng Sreng Street, Po Chen Tong and Chom Chao, CL Realty Co, Ltd CEO Chailin Sear said.

“Nowadays those who have warehouses for rent are not worried about finding customers,” he said, adding that those with floor space between 500 and 3,000 square metres are doing the best.

The average warehouse rental price is between $2 and $3 per square metre a month and rental prices have risen about 10 per cent since the third quarter last year, Chailin said.

Most people renting warehouses are Cambodian, Chinese, Korean, Malaysian or Thai.

Van Chanthorn, managing director of Town Real Estate, talked up the potential of warehouses as a long-term investment, especially those of at least 1,000 square metres. The rental price in Phnom Penh is currently between $1.5 and $2 per square metre a month.

The highest demand is being experienced in areas with access to land, air and water services in western Phnom Penh, such as Chamka Doung, Lou 5, Veng Sreng Street and National Road numbers 3 and 4, he added.

Chanthorn said building new warehouses is a smart investment because “economic growth and population growth raise demand for consumer goods, so warehouses to store the materials and goods will also see great demand”.

There are, however, many factors that prospective warehouse owners must take into consideration, Chanthorn said, pointing to requirements such as high roofs, good lighting, a steady flow of fresh air, stable electricity and clean water supplies, drainage and sufficiently sized loading docks.

Dith Channa, general manager of VMC Real Estate Cambodia, said the biggest surge in demand came in the first half of this year, with growth slowing down in recent months.

The average price of small-scale warehouses (less than 2,000 square metres) in Phnom Penh is between $3 and $4 per square metre a month, with space on the outskirts costing from $2 to $3, Channa said.

Larger warehouses (2,000 to 5,000 square metres) in the capital range from $2 to $2.2 a square metre, while those on the outskirts cost $1.5 to $1.8.

Even amid the boom, the political environment has made itself felt in the sector, Channa said.

“In the first half of the year, a lot of customers were asking my company to help find them a warehouse. After the election demand decreased as firms waited to see the formation of a new government before making new investments.”

Warehouse investment is now picking up again, especially in Chamka Doung, Chom Chao, Tuol Sangke, Chbar Ampov and Chroy chang var, he added.

He also said he expects demand to increase significantly when Cambodia fully integrates into the regional economy at the end of 2015, bringing new waves of investors to the country.Read Original text


Sihanoukville development project 30 per cent complete

Thu, 3 October 2013

2-borey-kouchWork is moving at a brisk pace on Borey Koch Asia, with 30 per cent of the multi-million-dollar project complete.

“Borey Koch Asia is a major development project in an onshore province,” Borey Koch Asia project manager Tous Saphoeun said.

The first phase of construction, which consisted of a supermarket, flats, villas, road system and gardens, has been completed, he said. The six-phase project has now entered its second phase, and work on flats, villas and a 17-storey hotel is 80 per cent complete, he added.

“This can compete with other projects in Asia in the future because its construction is focused on quality and attractiveness,” he said. “The project shines brightest in its infrastructure, quality, safety and location, which is close to the province’s commercial heart.”

Borey Koch Asia is being built on 62 hectares of land in Mittapheap commune, Preah Sihanouk province, and is at the centre of the Sokha, Ek Kareach and O’Cheu Teal beaches. One of the project’s biggest selling points is its sprawling, two-storey supermarket with a retractable roof. Each floor will house 500 stores and the centre’s parking lots will be able to cater to some 2,000 cars.

Saphoeun said all of the villas built in the first phase have been sold, while around 40 per cent of the flats have been taken. Fifteen per cent and 30 per cent of the flats and villas being constructed in the second phase have already been snapped up. Prices for the flats range from $13,000 to $15,000, and the villas from $200,000 to $300,000.

Three floors of the 5-star, 17-storey hotel have been built, Saphoeun said. He added that the hotel will be completed by the end of 2015, but he declined to give a finish date for the entire project.

Residential developments in Preah Sihanouk have been struggling recently as the supply of commercial developments has failed to rise to meet surging demand, according to Bunna Reality Group Co general manager Noun Rithy. Investors have bought large amounts of land there but the area’s status as a tourist hot spot means only projects like bungalows and villas, such as Borey BS, are met with interest, Rithy said.Read Original text