De Castle Royal launches leaseback program

Thu, 24 April 2014

2_De-Castle-Royal’s-new-leaseback-program,-offered-in-partnership-with-SBI-Royal-Securities,-provided-a-guaranteed-return-for-one-to-three-yearsIn a first for Phnom Penh, South Korean condominium developer Nury D&C has teamed up with SBI Royal Securities to offer condominium buyers a leaseback arrangement on the remaining condo-miniums and condo-minium blocks for sale at De Castle Royal.

The 32-storey De Castle Royal has a total of 414 condominium units. According to Nury D&C, a total of 90 per cent have been sold so far, with construction slated for completion in the coming months of this year.

Senior associate of SBI’s Corporate Finance Division, Leng Vandy, says that the leaseback program will bring positive financial benefits to buyers who take advantage of the arrangement.

“The buyer will get a guaranteed return that is relatively higher than most of the alternative property investments in Phnom Penh,” says Vandy. He adds, “In addition, the buyer will not be responsible for payment of management fees and utilities.”

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An arrangement in which the buyer leases a property back to the seller in return for guaranteed returns, leasebacks are common overseas, but are being pioneered by Nury D&C in Cambodia. Other condominium developers that are currently considering leaseback arrangements are, according to SBI, still too far from completion to act on such plans.

The De Castle Royal leaseback program offers a one-year high annual return of 8 per cent, with available investment possibilities ranging from a single condominium unit to blocks of five units.

The leaseback arrangement is limited to De Castle Royal’s three-bedroom condominiums.

At a block investment of five three-bedroom condominiums for approximately $2 million (or about $400,000 each), the annualised return on a one-year leaseback is $160,000, or 8 per cent, $155,000, or 7.75 per cent over the space of two years, and $150,000, or 7.50 per cent over three years.

“It solves the problem of buyers having to worry about finding tenants, and with Asean economic integration approaching next year, it’s the right time,” says SBI’s Vandy.

The leaseback program also offers buyers significant savings in terms of interior design and furnishings, “Interior decoration is inclusive in this leaseback arrangement,” says Vandy. “The seller will lease the unit back from the buyers and furnish the unit to be ready to move in. After the leaseback period the furniture and the interior decoration become the property of the buyers.”

The program is structured, says Vandy, to encourage one-year leasebacks, but three-year arrangements are also welcomed. The same, he says, applies to the number of units a buyer can purchase and leaseback.

“The leaseback arrangements are flexible,” says Vandy.Read Original text

Luxury resort looks for new lease of life with redesigned blueprint

Thu, 10 April 2014

3_Koh-posA new blueprint for the long-delayed Snake Island (Koh Pos) resort development off the coast of Sihanoukville will soon be completed, and investment of up to $1 billion is hoped to kick-start the project, which has a planned completion date of 2018, according to the developer.

Kheam Kolneath, public relations manager of the Koh Pous (Cambodia) Investment Group (KPIG), said recently that the group’s director was overseeing the finalisation of a revised resort blueprint with an architect from US-based Interstate Hotels and Resorts.

According to KPIG’s website, the group has entered into a long-term strategic development agreement, with Interstate acting as the island resort’s property manager.

Plans to redesign the blueprint for the 116-hectare luxury residential and resort complex come amid poor sales and a host of other setbacks.

In 2006, the Cambodian government signed a 99-year lease for the land on Koh Pos – also known as Morakot Island – to Russian KPIG.

The Post reported late last year that the company had already invested $100 million on a 1-kilometre bridge to the island, as well as other infrastructure, including an unfinished 5-kilometre road circling the island.

An artist’s view of previous plans for the 116-hectare Koh Pos resort.

An artist’s view of previous plans for the 116-hectare Koh Pos resort. PHOTO SUPPLIED

According to Kolneath, the blueprint is not yet complete, with the group director seeking changes to some aspects of the design from Interstate before an official launch and a proposal aimed at gaining permission to initiate the new project from the Council for the Development of Cambodia.

KPIG’s director has said that the new plan will increase the project budget from $276 million to $1 billion.

“I think the blueprint will be finished by the middle of this year because the director wants to push project ahead after it was put on hold following the 2008 financial crisis,” Kolneath said. “The project originally had a planned completion date of 2016, but it has now been delayed to 2018.”

The project comprises two 4-star hotels, one 5-star hotel, one “6-star” hotel, a casino, bungalows, villas for private residents, and further infrastructure to serve the resort, he said.

Kolneath added that the group had already spent $100 million so far on island infrastructure, including the bridge and the perimeter road.

“Construction of 20 villas is under way, but progress is slow,” Kolneath said, who suggested that off-plan sales had been deterred by the high price tags of $1.5 to $1.6 million.

According to Noun Rithy, general manager of Bunna Realty Group, even if the group changed the development plan, the resort development needs to have specific goals and a strategy. He said that construction delays had led to a loss of confidence, and that the developer would need to show strong commitment to win back market confidence.

Comparing Kho Pos and Ko Pich – better known as Diamond Island – in Phnom Penh, Rithy noted that Koh Pich is open for people to visit, but Koh Pos is closed to the public despite the construction of the bridge, making for a lost marketing opportunity.

Koh Pos covers a large area, and if the owner leased some parts of the island to short-term investors they could generate income, which would be better than leaving the island deserted, Rithy said.Read Original text

Battambang moves to establish first Pub Street

Thu, 3 April 2014

3_Battambang-provincial-authorities-are-hoping-to-lure-more-tourists-by-establishing-a-more-lively-nightlife-scene-in-the-Kingdom’s-second-biggest-cityTo attract tourism and make Battambang province more appealing as a nightlife destination, provincial authorities are preparing to follow the way of Siem Reap and lay the groundwork for a Pub Street ahead of the Khmer New Year.

The deputy governor of Battambang, Ngon Ratthanak, says the authorities had decided that Battambang’s first Pub Street would be located in Svay Pou commune, on a riverside stretch of Road No.1, and that it’s hoped the move will attract more visitors to the city as well as entice more people to relocate there.

The provincial authorities’ first step would be to promote a Pub Street exhibition, which will launch in the second week of this month, he says.

The riverside area that Battambang plans to develop into a Pub Street.

The riverside area that Battambang plans to develop into a Pub Street. PISEY HIN

“The Pub Street area will be 500 metres long, in the area of the French colonial-era Angkor Hotel in Svay Pou commune,” he says, adding that “after the exhibition, Pub Street will be open permanently”.

Battambang city comprises 10 communes and 62 villages, with a total population of about 147 000 people.

Provincial governor Chan Sophal says that the provincial authorities are still preparing aspects of the new Pub Street area, including ornamental lighting, among other features. He adds that the area will also include shops and restaurants, and that the owners were cooperating with the authorities in getting everything ready.

Battambang, according to the governor, aims to publicise itself as a tourist destination that offers excellent Khmer food and international cuisine, as well as nightlife.

“The authorities are focused on the preparations and we have the support of the Ministry of Tourism,” Sophal says. “This is our first initiative and we hope to attract as many tourists as possible.”

Battambang was ranked number one by the National Committee for Clean City Evaluation both this year and last year, and the city calls itself the Kingdom’s most beautiful city.

Changes are afoot in laid-back, early-to-bed Battambang.

Changes are afoot in laid-back, early-to-bed Battambang. PISEY HIN

“I think that increased tourism will help generate jobs at all level of the tourism sector,” the governor says.

Meanwhile, Eam Sokhon, Battambang city governor, stresses that the city is home to about 800 French-colonial-style buildings and that authorities are trying to preserve them rather than lose them to demolition. If buildings are beyond repair, he says, they should be reconstructed in the same style in which they were built.

Ho Vandy, co-chair of the Tourism Working Group at CATA, says he supports the idea of Battambang having a Pub Street because tourists do not only want daytime activities and to retire early at night – they also want to be able to go out for dinner and drinks and enjoy performances. Establishing evening events would likely be well received by tourists, creating more jobs for people in many sectors, Vandy adds.

“There are many tourists from Europe who are interested in Battambang city, especially French tourists who want a glimpse of an area that was once under their rule. Tourists from America and Germany are also interested in the province and the city for its traditions and history, as well as its green, beautiful landscape,” he says.Read Original text