Residential property prices see steady growth

Thu, 27 March 2014

4_Residential-property-is-likely-to-continue-to-see-steady-growth-due-to-Cambodia’s-youthful-demographics,-experts-sayA property expert and investor in the construction sector says that home prices have increased between 10 and 20 per cent so far this year compared to last year.

Kim Heang, president of Khmer Real Estate, says that demand for property in boreys is healthy. Most homebuyers bought properties for personal use rather than for speculative reasons, he adds.

According to Heang, Cambodia’s demographics – around nine million people are under 35 – mean that demand for residential property will continue to increase as young people marry and have children, thus it makes sense for people to buy early as property prices are going up by 10 to 20 per cent on an annual basis.

“I think residential demand will keep increasing for 10 years because there are so many young people,” he says, adding that the majority of growth in the market will be on the outskirts of Phnom Penh due to more affordable prices.

Most property sales are for personal use, realtors say.

Most property sales are for personal use, realtors say. Heng Chivoan

According to Heang, prices for apartments and villas have increased, while prices for condominiums remained stable or slumped due to oversupply. He adds that newly introduced bus services could boost land prices on the outskirts of town by making commuting easier and more affordable.

VTrust Appraisal CEO Chit Uys Stevexo, however, is more sceptical, suggesting that land prices have been flat due to Cambodia’s adverse political situation. He says land prices are not going up, and the same applies to residential units, even though prices might have rise due to taxes on imported construction materials.

Meanwhile, Van Chanthorn, managing director of Town City Real Estate, argues that residential prices in Borey Mohasethey, Borey Outhean Basak, Borey North Bridge, the BKK 1 area and residential areas on the outskirts of Phnom Penh have increased by around 10 per cent this year.

“Transactions have been steady, both for homebuyers looking for a place to live, and in some cases for speculative reasons,” he says.

Teng Rithy, general manager of Borey River Town, which is close to the Chrouy Chongvar Bridge, says that sales are strong, adding that single and twin-villa shophouses are 80 per cent sold-out.

According to Rithy, prices for units at Borey River Town have seen a year-on-year increase of 5 per cent, with increases in the costs of construction materials, workers’ wages and demand for property combining to boost home prices.Read Original text


Koh Russey, a jewel by the sea

Thu, 27 March 2014

2_Alila-Villas-Koh-RusseyAfter its November launch in Hong Kong, Alila Villas Koh Russey will break ground late next month, initiating the construction of a world-class luxury resort.

Alila Villas occupies 25 hectares on Koh Russey, an island in the Koh Rong archipelago in the Gulf of Thailand, with easy access from Sihanoukville via Ochheuteal jetty.

The first phase of the development will see the completion of the villas and the hotel in late 2015, according to Chris Hobden, surveyor at CBRE Cambodia, which is the authorised sales agent for the luxury island-resort development.

“It will bring a new standard of luxury to the southern coastline of Cambodia. Both Alila and CityStar are very focused on sustainability, which is not always a priority here,” says Hobden, who adds that just last week the project design was endorsed by EarthCheck.

EarthCheck is an Australia-based organisation that provides benchmarks and scientific advice and certification for sustainable tourism.

Among the many sustainable features of the villas are systems that automatically adjust lighting and temperature when occupants enter or leave the villas.

Meanwhile, resort structures only account for 15 per cent of the total site area, preserving most of the natural foliage.

A fishing exclusion zone 200 metres around the resort will preserve the marine environment.

A fishing exclusion zone 200 metres around the resort will preserve the marine environment. PHOTO SUPPLIED

The resort will also feature a nursery, which aims to protect more than 20 species of trees indigenous to the island, and an exclusion zone 200 metres around the resort that will preserve the marine environment – fishing boats will dock at jetties at the northern side of the island.

CityStar is pre-selling 132 villas – each of which has a swimming pool – and 47 duplex apartments. The villas will range from one-bedroom to four and from $480,000 to $2 million and more, according to Hobden.

“For one-bedroom villas, you have a guaranteed return of 6 per cent for three years – years two, three and four of hotel operations – and after that, the rental income is split 50/50 between Alila and the villa owner, after a 15 per cent maintenance, management and service charge fee is deducted,” Hobden says.

For two-bedroom and four-bedroom villas, owners have the choice of keeping them fully private or asking the hotel to manage them for periods of five years, on a renewable basis. The duplex apartments are all private, although CityStar and Alia are in a position to offer services.

Rates are expected to be set at around $500 a night for a one-bedroom villa, $600 for a two-bedroom villa and $1,360 for a four-bedroom villa.

Hobden says it will be the first coastal resort in Cambodia to be managed by an iconic brand.

The developer is French CityStar, founded in 2003 by Jean-Louis Charon, who was formerly managing director of Nexity, France’s No.1 real estate development company. The managing director in Cambodia is Etienne Chenevier, an established entrepreneur with over 20 years’ experience in Asia.

It is the first time that Alila has cooperated with CityStar, and Hobden describes it as a development that adds another level of prestige to the project.

“We’re talking about two companies that both have strong track records, and you need that if you’re going to attract investors,” he says.

According to Hobden, the best parallels for the resort regionally are in Bali, where Alila Villas Uluwatu and Alila Villas Soori have garnered multiple international awards.

Hobden calls Alila Villas the “crafted luxury” arm of the company’s profile, and the new Cambodian villa resort will be only the fourth of its kind worldwide.

Alila Villas Koh Russey is designed by Singaporean architect Chioh-Hui Goh of renowned architectural firm studiogoto.

David Simister, chairman of CBRE Thailand and Cambodia, says he is enthusiastic about the long-term potential for the Cambodian hospitality sector and particularly beach resorts, having seen dramatic growth in values in Phuket and Bali.

“Cambodia has the appeal, natural hospitality and unspoiled islands to offer a fresh and more eco-conscious approach to resorts,” Simister says.

Meanwhile, on the subject of Alila Koh Russey, Hobden says there is already some early interest from investors.

“Considering the full marketing campaign has not got under way yet, we have already had considerable interest from investors,” says Hobden, who was not at liberty to disclose precise sales figures.

Just 25 minutes by private car and speedboat from Sihanoukville Airport, Hobden notes that Alila Villas Koh Russey is perfectly positioned to take advantage of Siem Reap’s luxury tourism sector by offering visitors a luxury boutique beach holiday.

“With the daily flights from Siem Reap to Sihanoukville, you could fly into Siem Reap, and then fly almost direct to Alila,” Hobden says.Read Original text


Small-scale construction firms suffer amid slump in demand

Thu, 27 March 2014

5_As-demand-for-foundation-pillars-grows-for-large-scale-construction-projects,-many-smaller-operators-in-the-sector-say-they-have-been-suffering-from-a-slump-in-salesSmall business owners in the pillar construction industry say they are facing hard times as demand increases for large pillars but diminishes for small-scale construction.

Hun Bun Heng, who owns a small business on Street 272 that makes pillars for homes, said sales had been flat since last year’s contested elections, and that many construction projects had been postponed. However, he noted that sales had since normalised in Kampong Speu, Takeo and other provinces.

He added that his business specialised in making small-scale pillars – ranging from three to six metres in height – for the construction of flats. He said prices ranged from $10 to $20 per pillar.

“If the political situation normalises, we expect that our business will be revived, and sales are already growing gradually,” he said. “We were selling 700 to 800 pillars per month before the elections, but sales plummeted after they were held.”

According to Heng, the pillars, which are needed as foundation supports, can today be put in place with little disturbance to neighbours because new technology makes it possible to drill with very little noise and with minimal vibrations.

Kov Meng, owner of Craft Made Pillar Hay Meng, agreed that sales had fallen in the aftermath of last year’s elections, but he said he expected that the situation would improve later this year. He said he usually sells around 100 to 200 pillars per month, but prices have been flat for some time.

“Our products are used for building flat units that require foundation pillars of between three and six metres in height,” Meng said.

He added that the height of pillars depended on where the construction took place.

“For flat units downtown, pillars that are three to four metres in height are enough, but if the land is next to a riverbank or a lake, they need to be six metres,” he said.

Meanwhile, pillar-makers that provide foundation construction materials for larger-scale projects report that business has improved.

Chheang Bona, director of 7FTD Co, Ltd in Vihear Sour commune, in Kandal province’s Ksach Kandal district, said that his business grew 25 per cent so far this year in comparison with last year, and that the growth, he thought, reflected the growth in the construction sector.

Bona said his products are made using the latest technology, and that he had invested a further $4 million into his business on top of an existing $7 million in investment capital in order to meet market demand.

“We expect that property development and construction sector growth will continue to be strong and steady looking ahead,” he said, adding that his company was currently enjoying sales of between 3,000 and 5,000 pillars per month.

7FTD makes foundation pillars ranging from six to 12 metres and their installation requires the supervision of experienced engineers, Bona said, adding that for this reason his company was the sole point of sales.Read Original text


City’s third overpass shoots for ahead-of-schedule completion

Thu, 20 March 2014

2_Stueng-Mean-Chey-Flyover-is-now-70-per-cent-complete,-according-to-the-developer.-Hopes-are-high-work-will-be-finished-in-AugustPhnom Penh’s third overpass, or flyover, bridge is now close to completion, some eight months ahead of schedule, and its planners say it will not only greatly improve traffic congestion in the southwest of the city but will also lead to price increases for property that will have easier access to downtown.

The so-called butterfly-shaped overpass – a variation on a standard cloverleaf interchange – is now visibly taking shape, with construction slated to be completed in August.

The Stung Meanchey flyover project was inaugurated on November 26, 2012, with a budget of $19 million financed by the Overseas Cambodia Investment Corporation (OCIC), and is now 70 per cent complete, according to Touch Samnang, the project’s manager.

Samnang confirmed that progress on the Stung Meanchey flyover was continuing to proceed ahead of plan, and that the main bridge and feeder roads were scheduled for completion in August, well ahead of the scheduled date of March next year.

“The current situation [in terms of construction] is causing many difficulties for people who live in the area, so we are sparing no efforts to try and get this project completed by August, but we can’t make any 100 per cent guarantees on that front,” he said.

Once completed, the overpass is expected to significantly ease traffic congestion in the area, but traffic issues are likely to continue to worsen in other parts of Phnom Penh as vehicle numbers increase by the day.

It is an issue, sources say, that the municipal government is devoting considerable efforts to rectify.

Po Eavkong, managing director of Asia Real Estate Cambodia Co, Ltd, said that infrastructure development in Phnom Penh would provide many positive outputs, including ease of travel and improved economic growth. Eavkong also noting that improved infrastructure is good for property values as well.

At this time, land along the main road in the Stung Meanchey area, between Stung Meanchey Bridge and the crossroad close to the Sokimex Petrol Station, is priced at between $1,000 and $1,500 per square metre, while on the sub-roads prices range from $300 to $400 per square metre, seeing an increase of around 15 and 20 per cent annually, Eavkong said.

However, he noted that land prices close to the bridge had been affected negatively on a temporary basis.

“Property next to the bridge has suffered due to blocked roads and parking difficulties,” he said.

Oum Vutha, director of Angkor Khmer Real Estate, said that once the bridge was completed it would benefit the nearby property sector, and property prices would again increase once traffic jams and dust from construction are no longer a problem.

Land prices along the main road would likely rise from$1,500 to $2,500 per square metre depending on the location, he said.

“Once the bridge is completed, land prices in the area will increase at least 20 to 30 per cent,” he said.

Stung Meanchey Bridge is Phnom Penh’s third flyover, following the Kbal Thnol Bridge, which saw an investment of $6 million after being inaugurated for use on June 24, 2010, and the 7 Makara Bridge, which saw investment of $8 million and was inaugurated on January 6, 2012.

At the inauguration of the project, the plan was for the OCIC-invested Stung Meanchey flyover to take a total of 28 months to complete. An August completion date would represent a saving of eight months on the original planned completion date.Read Original text


Construction on Cambodia Plaza resumes after years-long delay

Thu, 20 March 2014

3_On-hold-since-2009,-office-space-in-Cambodia-Plaza-is-now-open-to-tenants,-while-a-72-room-hotel-and-an-vehicle-showroom-are-slated-to-open-by-year-end,-according-to-the-developerAfter postponing construction due to the 2008 economic crisis, work on the ambitious Cambodia Plaza is gradually being resumed.

The plaza is a mixed development project along Russian Boulevard close to the western end of the 7 January Overpass.

Cambodia Plaza project manager Adam Liv said the project is moving forward, and four floors of office space will be open next month, while a three-storey hotel with 72 rooms and an automobile showroom will open together at the end of the year.

Some parts of the project continue to be on hold, he added.

“The supermarket and the apartment units have been on hold since 2009, and I don’t know when the projects will restart,” Liv said, adding that the project owner is hiring an American architect to redesign and develop the blueprints of the mall and hotel, replacing the previous ones prepared by a Chinese designer.

According to Liv, Cambodia Plaza occupies 15 hectares, and half of the land would be used for gardens and a landscaped lake.

Liv was unable to confirm the total investment capital for the project, but said that $3 million has been spent on compacting the land.

He added that 20 houseshops have been completed, with an occupation rate of 50 per cent.

Cambodia Plaza is being developed by Lipo Politan Corporation in cooperation with Knight Frank, which will be managing the office space and property services.

Po Eavkong, managing director of Asia Real Estate, said that the project had not seen any remarkable developments since being put on hold in 2009. However, he also noted that, since the completion of the 7 Makara Flyover, access to the project had improved.

He also noted that the overpass, with its attendant traffic noise, might be a disincentive to potential homeowners.

In theory, Eavkong said, apartments in the area might sell for as much as $290,000, but since the completion of the nearby flyover demand had been weak, and apartments might actually sell for as little as $220,000.

General manager of VMC Real Estate Dith Channa said the fact that the project had been subject to such long delays made it more risky because there were now so many competing projects.

But he also pointed out that for Cambodia Plaza itself, the flyover was more of an advantage than a problem.

Because the project is located on the main road and at a distance from the flyover, it was unaffected by traffic noise, he said.Read Original text


Construction on triple-tower Times Centre to start in June

Thu, 13 March 2014

5_The-Times-Centre’s-construction-siteWork on a triple-skyscraper complex near Olympic Stadium announced in February is due to get under way in June this year and be completed in 2017, according to the project supervisor.

With its slogan “The heart of Phnom Penh”, Times Centre is slated to feature three residential towers – two with 38 storeys and one with 40. The project is located south of Olympic Stadium on Sihanouk Boulevard, in the capital’s 7 Makara district.

Project supervisor Tony Chou said that construction work would begin in June and would be completed in July 2017. He added that the complex would comprise a mall, a cinema, swimming pool, gym, sauna, tennis courts, gardens and restaurants from the ground to fifth floor, with the floors from the sixth floor up reserved for condominiums.

There would be a total of 1,583 units ranging from $2,000 per square metre, he added.

On the subject of competition, Chou said Times Centre had quality and expertise on its side.

“I think we can compete because our project has a good location, superior interior design and quality construction materials,” he said, adding that experienced Taiwanese engineers and architects were behind the project.

Chou declined to provide any information about the investors behind the project, saying only that it was a joint venture between Taiwanese business interests and local investors.

The target market for the condominiums would largely be foreigners, according to Chou, due to low demand for condominiums among Cambodians. He nevertheless voiced optimism that the Cambodian preference for flats and villas would change in due course, and local demand for condominiums would grow due to their convenience when combined with good management, and a variety of services and amenities, as well as comfort and security.

A model of Times Centre’s ambitious residential and commercial triple-tower project, which will be built close to Olympic Stadium in downtown Phnom Penh, with a slated 2017 completion date.

A model of Times Centre’s ambitious residential and commercial triple-tower project, which will be built close to Olympic Stadium in downtown Phnom Penh, with a slated 2017 completion date. SIV MENG

Asked about Cambodia’s political situation, Chou admitted there were some concerns, but said they were not “severe”, and that 15 per cent of the units in Building A had already been completed.

“We believe that this project will be a success due to its location and our focus on quality.”

Building A is 38 storeys, Building B will be 40 stories and Building C 38 storeys.

According to Chou, the land for the complex was leased from the government for 99 years and covers a total of 8,557 square meters. Upon completion, there will be parking space for 800 cars.

Not everyone is optimistic about the prospects for the increasing number of large-scale developments under way at present in the Kingdom’s capital.

In January this year, Khmer Real Estate Company president Kim Heang told the Post that the timing for Times Centre might be less than perfect because it comes at a time when other big-budget projects, such as Olympia City, are also under way.

Olympia City will feature a seven-storey shopping mall as well as two towers, one 45 storeys and the other 55 storeys. It is scheduled for completion in 2016.

But Noun Rithy, general manager of Bunna Realty Group, was more sanguine, pointing out that property transactions have been on the rise so far this year, suggesting there was little concern about political uncertainties and that over supply was currently also not a problem affecting the market.

“Even though development of the Times Centre has been sluggish, it will be successful due to three factors – its good location, quality and affordable prices,” he said.Read Original text


Seminar gets building sector talking about safety standards

Thu, 13 March 2014

4_The-Seminar-of-International-Building-and-Fire-Safety-Standards-in-Cambodia-aims-to-raise-awareness-of-safety-standards-in-the-construction-sectorA seminar was held last week to discuss concerns about building safety, which has become an increasingly hot topic, with the construction sector seeing fast growth and investment confidence at stake.

The Seminar of International Building and Fire Safety Standards in Cambodia was jointly held by the Ministry of Land Management and the International Business Chamber of Cambodia on March 6 to increase the body of knowledge about how to achieve a high level of quality and safety in the construction sector.

The chairman of IBC’s Real Estate Sub Committee, Daniel Parkes, said the purpose of the seminar was to share ideas about international building and fire-safety standards. He added that two speakers from Britain’s Royal Institution of Chartered Surveyors (RICS-UK) visited the Kingdom to offer advice to the government about preventing accidents in all kinds of buildings, ranging from factories to high-rises to residential apartments. They also provided recommendations on many other fronts, including laws and regulations, enforcement, and education, with a view to assisting Cambodia in its shift towards safer building codes.

Martin Russell-Croucher, director of Sustainability and Special Projects for RICS-UK, raised the case of the Rana Plaza garment factory collapse in Bangladesh last year. The disaster was caused by the use of inferior quality construction materials and the addition of extra floors onto the existing six-storey building – construction which had received official permission.

Sung Bonna, director of Bonna Realty Group, said that raising the Bangladesh case was a good idea because it helped raise awareness of the risks construction developers face in Cambodia. He added that he thought the seminar would help improve Cambodians’ awareness of the importance of quality and safety standards in the construction sector, which ultimately would be a driving force in terms of investment.

“Besides this factor, three catalysts are important in terms of attracting more investors – first peace, second economic sustainability and third good social security,” Bonna said.

Sorn Seap, general manager of Key Real Estate Company, said the seminar was useful in establishing safety systems for the construction industry in Phnom Penh and nationwide, especially fire safety.

“It encourages foreign investors and foreign direct investment when they see that a country has well-regulated safety codes for its construction sector. It’s a sign that a country is developing,” he said, adding that the result would be more foreign investors buying property in Cambodia.

Pen Sophal, secretary of the State Ministry of Land Management, Urban Planning and Construction, said that building safety was paramount, and all construction projects needed to adhere to safety standards that mitigated against collapses, while also following safety standards that prevented accidents in construction workplaces.

“We hope that investors will have more confidence in us – especially in the garment sector and the construction industry,” he said.Read Original text


Vattanac readies for series of openings with ‘surprises’

Thu, 13 March 2014

2_Neil-Brown-and-Gayle-Hockin-in-their-brand-new-office-in-Vattanac-Tower,-which-is-welcoming-more-tenants-in-the-coming-weeksThe office space at Vattanac Capital Tower – Phnom Penh’s “iconic”, dragon-backed, glass skyscraper – is finally open for business, and the first retail outlets in the mezzanine Tower 2 are due to open at the end of next month.

“It’s our second week now, and we’re the first tenants in the building,” says Gayle Hockin, PR and marketing coordinator for Vattanac Capital. She says the office has finally shifted to Vattanac Tower to test its facilities ahead of the arrival of other businesses in the coming weeks.

The 240-square-metre office space – occupied by Vattanac Properties – includes the entire Vattanac team, from asset management to engineers and the operations team, which is “overseeing everything from pest control to cleaning”, Hockin says.

“We run the building, basically, and so we were first in to ensure that everything is working properly, that the lifts function as they should and security is functioning the way it’s supposed to,” she says.

Vattanac Properties occupies the third floor of Tower 1, and Vattanac Bank will soon occupy the second floor.

Vattanac Capital property services manager Neil Brown says: “The next tenant will be Qatar Airways, who are moving in in the next two weeks, and then One Asia Capital are coming in, as well as Arup [Associates].”

Brown adds that Switzerland’s Schindler Elevator is also poised to take office space in Tower 1, which he notes is good news for the Kingdom’s most sophisticated elevator system – it guarantees a wait of no more than 35 seconds for a speedy (four metres per second) ascent to any of the building’s floors.

Schindler operates all the elevators in the 188-metre TFP Farrells- designed Vattanac Tower – Phnom Penh’s tallest. According to Brown, who previously worked in property services in cooperation with Schindler in Ho Chi Minh City in partnership with Schindler, the elevators are cutting edge in terms of getting people where they need to be in a building with the least inconvenience.

Furthermore, though declining to mention names, Hockin says that the three floors of retail in Tower 2 – the Monivong dragon’s back – will feature some surprises, with outlets for luxury brands that have yet to make an appearance in Cambodia.

She adds that Vattanac is allowing the mezzanine retail space to develop in what she describes as a “drip-feed” of openings, starting from the end of next month and slowly building up to a retail-tower grand opening in six months. In the meantime, Hockin says the upper floors of Tower 2 will be home to a state-of-the-art cinema complex, international medical services, education services and a boutique food court.

Hockin says to expect a series of surprises while that is under way.

“We’ll be having grand openings for every name brand that opens their doors as we go along,” she says.

Hockin also notes that the upper floors of the 39-storey Tower 1 have been handed over to Rosewood Hotels and Resorts, following an agreement signed in November last year.

The Rosewood will open in 2015 and will offer 148 rooms and suites, as well as 27 luxury, serviced apartments, a 120-seat bistro, two restaurants, and a sky bar on a cantilevered terrace that provides a bird’s-eye view of Phnom Penh.

The locally financed tower has already received awards, including best commercial property in Southeast Asia at the South East Asia Property Awards in Singapore in 2012.

Hockin notes the building is already LEED (Leadership in Energy & Environmental Design) Silver certified, but is aiming for Gold certification, which would place it among a relatively small number of office retail spaces globally that meet the stringent environmental LEED building standards overseen by the United States Green Building Council.

Standing on the 37th floor, cantilevered sky-bar terrace, Brown says of Phnom Penh’s boulevards and the Tonle Sap and Mekong rivers below, the city’s landmarks all clearly visible in the early dry-season haze: “It’s a good way of getting a sense of the layout of the city.”

But when the Rosewood-managed sky bar opens in 2015, it will also offer something besides just another luxury food and drinks venue with a view – a high-altitude wining-and dining experience in a city uncluttered with competing sky-scraping structures.

“We’re in now, and it’s all happening” says Brown.Read Original text