Growth in real estate companies reflects healthy market

Wed, 27 November 2013

8_Increasing-construction-activity-is-increasing-demand-for-legally-registered-real-estate-companies-in-CambodiaThe number of legally registered real estate companies in Cambodia grew by nearly 50 per cent in the past year, a development that industry leaders say bodes well for development of the property sector while reflecting increased domestic and international confidence in Cambodia’s future.

Since the end of 2012, 19 new licences for real estate companies were issued by the Cambodian government. More than half of those were issued to companies with foreign investment. There are now presently 59 licensed real estate companies operating in Cambodia, 33 of which are also members of industry association Cambodian Valuers and Estate Agents Association (CVEAA).

Cheng Kheng, CVEAA president and director of Cambodia Properties Limited, told the Post that the 48 per cent jump in licensed real estate companies over the past 12 months demonstrates an increasing interest in Cambodian real estate internationally.

“The growing number of companies illustrates the growth of real estate sector in Cambodia as well as growing international investment inflows,” he said.

Even though there is positive growth in the number of legally registered real estate companies, CVEAA property investment research suggests that up to 90 per cent of real estate investments in Cambodia are not properly licensed.

Kuy Vat, president and CEO of VTrust Group, said growth in legally operating real estate companies in Cambodia, especially foreign-invested companies, would have a positive net effect upon the industry by driving competition. Vat added that the influx of foreign investment in Cambodia is an indicator of confidence in economic growth and political stability in the Kingdom.

“Among the 10 countries in ASEAN, people are only talking about Cambodia and Myanmar as places with untapped potential that provide investors with confidence,” he said. “Cambodia gets higher marks than Myanmar due to its better investment policy, whereas, in terms of comparing market potential, Myanmar has the edge with its larger population.”

Nuon Rithy, general manager of Bonna Realty Group, pointed at more than 50 per cent growth in CVEAA membership over the past year as a similarly positive trend to the increase in licensed real estate companies. CVEAA membership grew from 20 members to 33 since the end of 2012.

Cambodia’s moves to strengthen rule of law and increase transparency have not only improved prospects for domestic players, Rithy said, it has also kindled interest by investors from South Korea, Japan and the European Union.

“We do not worry about competition from foreign companies,” Rithy said. “In contrast, it is extremely positive that foreign companies are entering Cambodia. This increased competition will force local companies to strengthen themselves, which will prepare them for upcoming challenges in the ASEAN market.”Read Original text


De Castle Royal preparing to bring luxury condos to Phnom Penh

Wed, 27 November 2013

2_Castle-De-Royal-is-the-only-luxury-condominium-project-scheduled-for-completion-in-2014Phnom Penh’s condominium market is only just beginning to develop, with early movers scooping up prime locations. The De Castle Royal development in the city center, which will come online in the second quarter of next year, will change Phnom Penh’s skyline, and likely pave the way for expansion in luxury residential offerings to come.

The construction of De Castle Royal is currently finishing up on Street 288. When completed, the 32-storey building will have 414 residential units ranging in size from one to three bedrooms as well as parking for up to 474 cars in its six-storey garage.
Ann Sothida, associate director of the Cambodian office of CB Richard Ellis (CBRE), which took over as property manager of De Castle Royal in September, said that the development’s location in Boeung Keng Kang I, commonly known as BKK1, was a big advantage.

“De Castle Royal’s location in BKK1 makes it appealing to both wealthy locals and expatriates,” Sothida said. “The project’s unique selling point is that it is the first condominium in Cambodia to provide individual owners with a strata hard title.”

CBRE Cambodia property manager Simon Griffiths said that De Castle Royal will take luxury residences in Phnom Penh to a new level.

“De Castle Royal is on a much grander scale than other developments,” Griffiths said. “It’s unique not just in terms of the quality of services but also in the materials used, the workmanship and the design.”

CBRE’s property management duties at the moment involve what Griffiths describes as “preconsulting”, in which CBRE begins involvement in a property nine months before it is scheduled to open, ensuring optimal space usage as well as coordinating and streamlining services and systems.

“It’s quite an efficient way of doing property management,” he said.

De Castle Royal is being constructed by South Korea-invested Nuri D&C, which is also handling sales. Nuri D&C sales manager Lach Linda said that of the 85 percent of apartments that had been sold, roughly half had been sold to Cambodians and the other half to foreigners including East and Southeast Asians as well as French buyers.

Linda said the development was ideal for investment as it was one of the best locations for a project of this kind in Phnom Penh and there was an undersupply of high-end residential space in the city center.

“Investors will be able to buy cheap and rent high,” she said, adding that each unit sold comes with a non-fixed parking space. Nuri D&C research estimates a 21 per cent annual return on a one-bedroom unit purchased for $143,110 with 30 per cent cash down and the remainder with a loan with 10 per cent interest, if rented for $1,600 per year.

The brisk condominium sales of recent months and the involvement of CBRE cap a major turnaround for the De Castle Royal project, construction of which stalled in the wake of the 2008 global financial crisis.

De Castle Royal’s fortunes changed this year when Canadia Bank injected $28 million into the project, enabling it to move toward completion. Lach said the financial support was crucial in assuaging investor concerns.

“The customers have confidence in our project again,” she said.Read Original text


Business travellers to change skyline

Wed, 27 November 2013

2_The-view-from-Vattanac-Tower-and,-in-2015,-the-Rosewood-Phnom-PenhNew residential and office spaces will change the Phnom Penh skyline for many years to come, but new hotels catering to business and high-end travellers will also play a big part of changes in the city.

This was illustrated earlier this month when it was announced that the capital’s first Grade A office building, Vattanac Capital Tower One, reached an agreement with Rosewood Hotels & Resorts to manage an ultra-luxury hotel on the building’s top 14 storeys.

Cambodia relies on tourism more than any of its Southeast Asian neighbours, with the sector accounting for a substantial 16 per cent of gross domestic product (GDP). But at the moment, Phnom Penh, with its cultural, architectural and historic attractions and buzzing nightlife, still lags behind Siam Reap in terms of its hospitality sector. Unfairly, but perhaps not surprisingly, many cash-rich leisure travellers still simply fly in and out of Siam Reap without visiting the capital.

Asking a developing country’s capital to compete with Angkor Wat and Siam Reap’s world-class dining may be a bit much, but Phnom Penh does possess one distinct advantage over its northwestern rival. As Cambodia’s economy continues its solid growth and more foreign enterprises set up shop, international business travellers will come to Cambodia, with Phnom Penh as their primary gateway.

Global hotel brands understand this and are already making moves. Markland Blaiklock, senior vice president of Sofitel Asia Pacific, told the Post earlier this year that the hotel’s France-based parent company, Accor, was planning to diversify its target markets in Phnom Penh. Blaiklock said Accor’s economy brand Ibis and mid-range brand Novotel were planned for the vacant sites near the Sofitel Phnom Penh Phokeethra.

According to a report released by the Asian Development Bank this month, tourism is playing a key role in pushing up the value of Cambodia’s service sector, which only accounts for 40 per cent of GDP at present. Tourist arrivals during the first half of this year were up 19 per cent year-on-year to 2.1 million.

Established high-end hotels such as Sofitel, Raffles Hotel Le Royal and Intercontinental Phnom Penh are no doubt expecting increased competition in the coming years. And for the moment it appears that, barring any major economic or political disturbances, Phnom Penh’s tourism arrivals will continue to grow through the short- to mid-term, with more and more visitors coming to do business. And maybe visit Siam Reap if they have time.Read Original text


Snake Island plans back to the drawing board

Wed, 20 November 2013

8_A-one-kilometre-bridge-connects-mainland-Cambodia-with-the-island-of-Koh-Pas,-site-of-a-high-end-resort-projectA development company with a government concession for a high-end property project on the island of Koh Pos, also known as Snake Island, has announced that it will significantly alter its original plans for the project. The new plan, which must first be submitted for government approval, will raise the project budget from $276 million to $1billion.

Keam Kolnead, chief public relations officer of Koh Puos (Cambodia) Investment Group, told the Post in a phone interview that the villa, hotel and office projects on the island have been redrawn to adapt to the current situation. Villas were not selling well due to their large size and nearly $1 million asking price, he said.

“Now the company is altering the project blueprints before seeking permission for construction from the Council of the Development of Cambodia [CDC] again,” Kolnead said. “Reapplying for permission will happen in 2014 and the revised project will have a budget of $1 billion.”

A model of the planned development at Koh Pos.

A model of the planned development at Koh Pos. Heng Chivoan

The company submitted its first application for the project to the CDC in 2006, when it was planning on investing $276 million in converting the 116-hectare island into a luxury residential and resort complex.

Kolnead said the company had already invested $100 million in building a 1-kilometre bridge to the island as well as other infrastructure on the island itself, including an unfinished 5-kilometre road circling the island.

Noun Rithy, general manager of Bunna Realty Group, said that it appeared that progress on the Koh Pos project was slow. Bunna Realty’s contract to sell residential properties on the island had already expired, he said.

Ho Vandy, co-chairman of the government’s Private Sector Tourism Working Group, said that the government had provided many similar island concessions to other companies. It was understood that companies with concessions would use their developments to attract domestic and international tourists, maintain an existing national resource and provide jobs and income for local people, he said.Read Original text


Tonle Bassac: Primed for the future

Wed, 20 November 2013

4_A-view-from-the-Phnom-Penh-Center-on-Sothearos-shows-the-numerous-cranes-working-on-riverside-developments-in-the-Tonle-Bassac-areaThis week, Phnom Penh property expert David Murphy of Independent Property Services explores the southern riverside sangkat of Tonle Bassac.

Tonle Bassac is located on the western shore of the Bassac River, from which it takes its name (Tonle is Khmer for ‘river’). Contained by the river to the east, Sihanouk Boulevard to the north and Norodom Boulevard to the west, Tonle Bassac hooks westward under BKK1 until reaching Monivong Boulevard.

This up-and-coming area is home to a number of small alleys and roads that branch off of the larger boulevards, creating a suburban environment of quiet leafy streets a stone’s throw from the hustle and bustle of central Phnom Penh. In the past few years there has been considerable development activity on Tonle Bassac’s riverside area, including the Sofitel Hotel, Diamond Island, Naga World and some gated community.

New restaurants and entertainment establishments have also popped up in the area, from Korean restaurants along Sothearos to noodle houses on Diamond Island and diverse dining options in Naga World. The wide variety of options within a small area make Tonle Bassac an ideal area for new families arriving in Phnom Penh.

In terms of traffic and transportation infrastructure, Tonle Bassac enjoys access to the dining and entertainment areas of Riverside to the north, easy connection to central Phnom Penh via Sihanouk Boulevard and Norodom Boulevard and convenient journeys to the airport via the Street 271 ring road.

There are three main gated communities located within the Tonle Bassac sangkat. Bassac Gardens, Les Jardins du Bassac and Chamkarmorn City offer a variety of property options within secure, managed environments. Villas in these communities range from $2,000 to $3,500 and apartments can be found in the range of $1,000 to $2,000 per month.

Serviced apartment options in Tonle Bassac are plentiful, including dK Sanctuary, the well-established Green Mansion 1 and the soon-to-be-opened Syphon. Villas in the area are common and of varying quality and size, running from $1,500 to $3,500 per month.

Tonle Bassac’s prime location make it just as appealing for setting up an office as it is for living. There is quite a bit of commercial and office space available in the area, including in newer buildings such as the iCON Professional Building and B-Ray Tower. Expect more office space to come online in the short term in this ascendant part of Phnom Penh.

David Murphy is managing director of Independent Property Services. He can be contacted on 077 959 861, inquiry@independentpropertyservices.com, or check out their website at www.independentpropertyservices.com.


Chinatown location still unknown

Wed, 20 November 2013

3_A-labourer-walks-past-the-entrance-of--Phnom-Penh’s-historic-O’Russey-MarketHistoric O’Russey Market will not be the location of a planned Chinatown development, according to Cambodia’s Tourism Minister.

Tourism Minister Thong Khon said the government was looking for another site for the tourism-focused development and that O’Russey Market was not under consideration, as had recently been reported by Japanese media.

“First we need to study a new location and discuss with the people, then we must submit our proposal to the royal government,” Thong said in a phone interview on Monday.

A report on November 13 by Japanese financial news service Nikkei singled out O’Russey Market as the location the government was considering for the new Chinatown. The development is intended to create a Chinese atmosphere in central Phnom Penh to attract greater numbers of heavy-spending Chinese tourists. Last year nearly one in 10 visitors to Cambodia was Chinese.

More than 330,000 Chinese travellers visited Cambodia in 2012, a 35 percent jump from the previous year. Visits by Chinese this year are set to surpass last year’s high mark – the kingdom recorded more than 200,000 entries by Chinese in only the first five months of this year.

China is currently the world’s largest source of outbound travelers, who spend an estimated $100 billion annually. With this massive supply of shopping-focused tourists, combined with the relatively short journey from China and the fact that 16 per cent of Cambodia’s GDP comes from tourism, it’s easy to see why attracting Chinese tourists has become a priority for the government.

The Cambodian Tourism Ministry has set a target of attracting 1.8 million Chinese tourists annually by 2018, according to statements made at a seminar by Bou Chanserey, deputy director of the department of planning and development at the Ministry of Tourism.

That may be an achievable goal, but to keep pace, Cambodia’s Chinese-language infrastructure will need to improve quickly. The restaurants, hotels and travel agencies that are early adapters of Chinese-language services will position themselves to reap the early benefits of the rapid growth in tourism from China.

It’s too soon to say what the ramifications of a Chinatown on Phnom Penh’s property market will be. What is safe to say is that when the location of the development is announced, the value of adjacent street-level commercial space will no longer be the same.Read Original text


Office demand expected to pick up

Wed, 20 November 2013

2_Phnom-Penh-Tower-and-Canadia-Bank-TowerOffice space demand in Cambodia remained stable in the third quarter of this year, the lack of growth reflecting market concerns regarding post-election political instability, property experts say.

Hang Yuvan, sales manager at Phnom Penh Tower, said that office space demand should improve by the end of this year.

“We expect that the rental office demand will grow early next year because fewer people will be concerned about the political situation here in Cambodia,” Yuvan said. “The office rental market will be more competitive next year, and we will no longer be concerned about demand increasing.”

Office space in Phnom Penh Tower is currently renting for $18 to $22 per square metre, with an additional $4 per square metre for management and security.

More than 100 international companies have established offices in Phnom Penh Tower, along with a few local companies.

Thab Rithy, general manager of rental offices at Canadia Bank Tower, said that in the third quarter office rents increased only slightly due to worries about domestic politics, but that increased business activity in Cambodia by Chinese and Malaysian companies should bolster demand.

Rithy said Regus Business Centre has rented space in the Canadia Bank Tower where it will offer services such as virtual offices and serviced offices to its corporate clients.

Office space at the tower is currently renting for $25 per square metre plus $5 per square metre for management and security. Thirty companies are currently occupying more than 80 per cent of the building space, but there is still high availability from floors 16 through 27 for businesses looking to rent.

“At the end of 2013 or early of 2014 office rental demand will increase again now that a lot of new companies have come to study the market and will lease from us,” said Chrek Soknim, deputy director of VTrust Group.

Buildings managed by VTrust Group are grade B rental offices with monthly rental rates running from $8 to $12 per square metre, according to Soknim. Grade B office space is popular during uncertain economic times, he said, adding that his buildings had 98 per cent occupancy.

In the coming two to three years grade A office space will be in high demand and clients currently renting grade B offices will likely upgrade to grade A, Soknim said, explaining that new entrants to Phnom Penh were likely to fill in the newly vacated grade B offices.Read Original text


Cambodia's construction industry looks ahead

Wed, 13 November 2013

8_Senior Minister of the Ministry of Land Management, Urban Planning and Construction Im Chhun Lim heads Tuesday's meetingCambodia’s construction industry took a major step forward in its development on Tuesday with the second summit of the Cambodia Constructors Association at DARA Airport Hotel. The summit occurred alongside an exhibition of construction products, materials and services.

Association chairman Pung Kheav Se said that was proud of the summit’s success, which he said hinged upon the crucial efforts of association members and other relevant institutions.

The association reached a total of 50 members recently, but many companies have still yet to join.

“I would like to appeal to all the companies attending the second summit here to please register as the member of the Cambodia Constructors Association as soon as possible,” Pung said before summit attendees.

Promoting sustainable development is one of the association’s key objectives for the construction industry, he said. Cambodia’s construction sector employs more than 150,000 people and is currently in a state of rapid expansion.

Senior Minister of the Ministry of Land Management, Urban Planning and Construction Im Chhun Lim.

Senior Minister of the Ministry of Land Management, Urban Planning and Construction Im Chhun Lim.

Im Chhun Lim, Senior Minister of the Ministry of Land Management, Urban Planning and Construction, said the summit highlighted the substantial progress and achievments of the domestic construction industry over the past two years. It also served to improve relationships with partners in the government as well as domestic and international institutions, he said.

Im said the association will serve as “an important stage for members and the construction sector as whole” and would raise domestic construction standards. Member companies are involved in a wide variety of construction activities, including constructing buildings, roads, bridges, railways and airports as well as manufacturing electric, water and air conditioning systems.

The association was founded in November 2011 and acceded to the ASEAN Constructor Federation the following month.Read Original text


Koh Russey Resort to exhibit in Hong Kong

Wed, 13 November 2013

5_A-computer-generated-bird’s-eye-view-of-Alila-Villas-Koh-Russey-Resort,-which-is-aims-to-attract-foreign-investors-at-with-an-exhibition-in--Hong-KongCambodia’s Koh Russey Resort development project is aiming to attract large foreign investment by exhibiting in Hong Kong.

The resort will showcase its properties and facilities at an exhibition from November 29 until December 1, according to the real estate company CBRE.

Expert staff of all departments at CBRE are busy preparing to show how Alila Villas Koh Russey Resort development project is focused on meeting international standards, with its residences. entertainment facilities, five-star hotel and other substantial infrastructure on the island, said Ann Sothida, a deputy director of CBRE Cambodia Co., authorised sales agent for the resorts, houses and hotels at Alila Villas Koh Russey.

Koh Russey is located in Preah Sihanouk province, opposite the beach of Ream National Park.  PHOTO SUPPLIED

Koh Russey is located in Preah Sihanouk province, opposite the beach of Ream National Park. PHOTO SUPPLIED

A complete mock-up model has been made to the show the houses, hotels, restaurants and bars located along the white sand beach.

The beauty of the area will be highlighted in photographs on display, as well as the computer-generated illustrations that will reveal the luxury of construction and attention to detail that the developer’s customers would demand, Sothida said.

“All are the first achievements of a huge development project to attract international customers from Hong Kong and other places around the world,” she said.

“It is the first exhibition for Alila Villas Koh Russey Resort, but our company was previously involved in this kind of event to attract customers for Koh Sangsa and it was quite successful,” Sothida said.

Ann Sothida, a deputy director of CBRE Cambodia Co. PHOTO SUPPLIED

Ann Sothida, a deputy director of CBRE Cambodia Co. PHOTO SUPPLIED

“Alila Villas Koh Russey has 227 luxurious residences, a five-star hotel with 48 premises to accommodate restaurants, bars and other entertainment venues plus places for residents and visitors to relax,” she said.

“The project is invested by Citystar Company and the company owner has chosen Alila Group as a decorative designer and for construction management.”

“This project is built on 25 hectares of land next to beautiful ivory beaches of Koh Russey,” Sothida said.

“We hope the fair in Hong Kong on the Alila Villas Koh Russey Resort project will help the development become a new attraction in the heart of Cambodia’s beach -- one of the most famous and beautiful beach clubs in the world,” she said.

“It will not only attract tourists, but also business people and more foreign investors.”

Alila Group is a famous company in the region and the world because it constructs and manages hotels, resorts and accommodation with modern, luxury housing that harmonises with the environment around each location.

Koh Russey is located on Preah Sihanouk province, opposite the beach of Ream National Park, which takes 15 or 25 minutes by boat from Preah Sihanuok town International Port.Read Original text


City faces gigantic 45-storey change

Wed, 13 November 2013

3_The-site-in-Tonle-Bassac-where-construction-of-twin-45-storey-condo-towers-will-soon-beginPhnom Penh will be a changed city and more attractive when twin 45-storey condominium towers are completed in the coming three or four years, developers say.

Sung Bonna, director of Bonna Realty Group, said Singaporean outfitThe Bridge Company, would start constructing the twin skyscraper buildings at the end of this year or early 2014.

The company is proposing that the Ministry of Land Management, Urban Planning and Construction run its project. He added that the buildings would be used for condos, office space and a supermarket. However, he did not outline further details about the project or how much it would cost.

“This project is not mine, I do not have such substantial capital, ” Bonna said. “It is my client’s project”

The twin buildings will be built south of the Australian Embassy in Tonle Bassac commune, Chamkarmon district.

Noun Rithy, general manager of Bonna Reality Group, said the owner was studying and preparing the project for a future sales campaign, adding that the location of the commercial building was interesting, for it is comprised a variety of services and a good urban environment.

Noun said that factors including proximity to the city centre, good surrounding environment and fengshui and high-class residential spaces would ensure the project’s success.

Tall buildings are popping up throughout the Tonle Bassac area, including the Rose, Riviera, and CASA Meridian condominium developments, Tokyo Inn and Bali Scenery.

Kim Heang, president of Khmer Real Estate, said that the twin skyscraper development was a good project because the location was the highest priced area in Phnom Penh. The development’s diverse targeted markets will ensure its success, he added.

The one-and-a-half hectare site will serve as a welcoming point for tourists and investors coming to Cambodia after ASEAN integration is launched in 2015, he said.

Liv Ratana, personal assistant to Sear Rithy, chief executive officer of The Bridge Company, said Sear declined to comment on the project.Read Original text