Content image - Phnom Penh Post Prince Real Estate Using Action To Repay Society, Responsibility Is Value

Read Original textThu, 27 August 2015

prince-realestateGreat Love without Borders: Prince Real Estate Charitable Foundation Officially Sails Out

Prince Real Estate will hold a charity event aimed at helping a plethora of vulnerable groups, revealing the beauty of charity and deducing responsibility.

On August 29th, 2015, The Prince Real Estate Charitable Foundation Gala will officially raise the curtain to present the social welfare program which raises awareness and donations for dropouts, people with disabilities, elderly people with no families to look after them, municipal development, ecological protection and similar efforts. Depending on donations from people of all walks of life to provide support, Prince Real Estate is proud to present the opening of the Prince Real Estate Charitable Foundation Gala.

As a big charity event held by the foreign company in the Kingdom of Cambodia, Prince Real Estate Charitable Gala has already become a brand name and received attention from many people, including the chairman of the chamber of commerce, business executives, Cambodian government officials, experts and scholars, celebrities of finance and economics, real estate and the mainstream media. According to the relevant sources, this event is a distinguished gathering for various elite celebrities.
The day of the charity, there will be singing and dance performances, as well as a blessing lamp put in the Baise River. Various celebrities will join the auction and an on-site treasured collection will be used to collect donations, which will be used for the charity projects.

As one of the key projects of public welfare, the Prince Real Estate Charitable Foundation Organization hopes the gala will pass on the spirit of caring for society and youths, as well as bringing prosperity to communities in need. As an international enterprise with multinational developments, Prince Real Estate strives for long-term investments between enterprises and society.

In the future, the organization plans to continue to be a long, open platform that engages in social responsibilities by integrating and supporting various social contribution projects raised by Prince Real Estate. Efforts for giving back to society include supporting the poor, solitary assistive assistance, disaster relief and rescue, environmental protection and cultural promotions, to name but a few. In order to uphold the purpose of being “committed to public welfare charity, advocate corporate-citizen responsibility, promote social harmony and progress”, the organization will devote itself in supporting those efforts.

The Prince Real Estate Charitable Foundation Organization belongs to the national non-public fund with an initial $400,000 investment to start the project. In addition, for every set sold, $2 per square meter will be donated under Prince Real Estate building sales. However, the organization still relies on donations from others, thus it will continue to promote charity projects. To tie into the establishment of the foundation, Prince Real Estate organized volunteers to carry out regular anti-poverty activities with dedicated compassion.

The Prince Real Estate Charitable Foundation Organization is a milestone for the real estate industry in promoting charitable organizations for the betterment of the Kingdom of Cambodia. The founding of the organization reflects Prince Real Estate’s willingness to become the most respected property enterprise and the company’s dedication in building a better life for the people of Cambodia. It is definite that the development of the organization will keep expanding within the industry as an influence and social significance.

Mixed blessing from China’s stock market crash

Read Original textThu, 27 August 2015

chinese-stok-worriedWhile the devaluation of the yuan may work in overseas property markets’ favour, including Cambodia, what has been referred to as ‘Black Monday’ could drag down the local real estate sector, said industry experts.

China rattled global financial markets when the People’s Bank of China (PBoC) weakened the yuan by 1.9 per cent on August 11 from the previous day, its biggest one-day drop in two decades and dropped a further 1.6 percent the following day.

Signaling the Chinese government’s growing worry about the country’s slow economic growth, the yuan devaluation is believed to boost China’s flagging export sector, however, at the same time, the buying power of Chinese investors outside their currency zone would be harmed.

This has raised concerns over Chinese investment in Cambodia as their investment largely contributes to Cambodia’s fast-changing skyline.

It was previously reported that during the first four months of last year, China’ public and private sector invested about $1.4 billion in Cambodian construction projects, while the total amount was $2.7 billion in 2013, according to Tep Thon, undersecretary of state for the Ministry of Land Management, Urban Planning and Construction.

Grant Knuckey, CEO of ANZ Royal Bank, said the shift in the value of the yuan does not necessarily impact the investment climate for the Cambodian property.

“In fact, precedent suggests that perception of a weakening yuan normally cause investment outflow from China and at the margin that may even increase demand for property investment here. It’s a bit counter-intuitive, but the flow can work that way,” said Knuckey.

Although the Chinese authorities called the currency move a one-off fix to make its exchange rate more market-oriented and said there is no basis for continued currency depreciation, Knuckey said that if Chinese investors anticipate a more pronounced depreciation trend, they would choose to move more cash offshore regardless if the PBoC does not have a definitive stance to further weaken the currency.

Meanwhile, Tan Ying Kang, Asia Pacific senior research analyst for Knight Frank Asia Pacific, echoed the sentiment that if investors see that the Chinese economy is becoming more risky, it would be a boon for other markets.

“If the Chinese economy is in a worse state than thought [investors will] seek diversification to preserve their wealth. This substitution effect may boost investment in overseas properties,” he said.

According to CBRE Cambodia, Chinese cross-border capital outflows into commercial real estate have grown rapidly, reaching $11.7 billion last year. Halfway through 2015, its global real estate investment totaled $6.6 billion, up 19.7 per cent on the same period last year.

While the impact on overseas property markets has yet to be revealed with updated figures, associate director of CBRE Cambodia Simon Griffiths said most of the economic evidence suggests that currency plays a very small role in transnational real estate investment.

“The size of the savings pool in China and the imperative for Chinese institutions to build up more diversified portfolios are too great for a devaluation of the yuan to impact the flow of capital from China into world real estate markets, even if it reaches up to eight per cent, as some expect,” said Griffiths.

With 20 per cent to 30 per cent of business coming from Chinese companies and nationals, CBRE Cambodia sees an in-flow of investment from China for long term investment, geo-political or commercial reasons. Griffiths expects to see such investment characteristics from China to continue for years to come.

However, the rosy future for the local property market may have been dampened as the fears of a Chinese economic slowdown have haunted investors, resulting in the biggest slump in the Chinese stock market in eight years.

China’s benchmark Shanghai Composite Index went into free fall plunging 8.5 per cent on what the Chinese state media dubbed ‘Black Monday’.

The next day, worries over a deeper plunge brought China’s central bank to cut the interest rates by 0.25 per cent and the required reserve ratio by 0.5 per cent.

That same day, Moody’s, one of three big rating agencies, published an announcement on possible spillover effects the Chinese stock plunge could have on various Cambodian markets noting that “...Cambodia’s economy has benefited significantly from Chinese trade, concessional loans, and investment.”

Although the Chinese authorities claimed that during the second quarter of this year the GDP grew seven per cent, some argued that China’s growth is significantly lower.

“The extent of the slowdown is still unknown, with the official growth numbers likely to overstate the true picture,” said Jay Menon, lead economist for trade and regional cooperation at the Asian Development Bank. “The fact that the yuan has been devalued is an indirect indicator of the likelihood that the growth slowdown is much larger than the official numbers suggest.”

“The property market is certainly going to be one of the main casualties,” he said, explaining China’s slowdown is likely to have a noticeable impact on the economy as it is a major investor and lender to Cambodia.

While the global markets are still buzzing about devaluation of the yuan and the stock markets’ crash, one thing is certain: the currency move has affected other Asian countries not pegged to the US dollar.

On the August 11 crash, emerging Asian currencies dropped to multi-year lows: Indonesian rupiah and Malaysian ringgit hit fresh lows not seen since the Asian Financial Crisis in 1998, the Singapore dollar and the Philippine peso fell to their weakest levels in five years, while the South Korea won touched a near four-year trough.

Cambodia, however, where the US dollar remains to be the major currency for large transactions in the country, has remained unaffected by currency volatility.

“Certainly the currency depreciation occurring in neighbouring markets affects the relative return for a US dollar investor and erodes competitiveness for Cambodia,” said Knuckey in terms of regional payoff.

“Conversely, some may see US dollar property in Cambodia as a currency hedge, if they foresee US dollar strength to continue. In short, there is not a singular impact,” he said, adding the US dollar is currently in a structural bull trend, especially relative to Asian currencies.

If this continues to last, Tan explained that “investors may actually be attracted to Cambodia to profit from the currency play.”

Regardless, investors would have had a better foreign exchange gain if they had converted foreign currency to US dollar to buy property in Cambodia a few months ago, added Knuckey.

Knuckey said while this bull trend may not last, “as long as Cambodia remains a US dollar market, it will at least provide currency diversification for Asian investors.”

As talk of China’s economy, and the yuan, continues to reverberate across the globe, Tan reiterated the fact that for investors, currency value is not the only factor driving investor’s decisions.

“Particularly for institutional investors interested in commercial properties, the long-term prospects of Cambodia [is] the most important consideration,” he said.

Living the Dream: The Lesser-known Industries Adding Value to New Developments

Read Original textThu, 27 August 2015

seara-phnom-penh-officeObviously the construction industry is booming alongside the recent explosion of high rise apartment and condominium projects taking place across Cambodia. However, this recent surge in development is also benefiting some lesser known industries, those of which are working toward improving the end quality of these development projects for both buyers and sellers. Some products proving hugely popular to the latest new developments in Cambodia are onsite gyms and health and fitness amenities. A rise in these additional features in new developments nationwide reflects international consumer trends appearing in the Kingdom as they never have before.

Speaking with Simon Rapoport, country manager of Seara, official importer of Life Fitness exercise equipment in Cambodia and full package gym design and installation professionals, we discover what is fueling this surge in demand for high end amenitie within new development projects.

“When we install the gym, we add value to the project immediately, and we help maintain trust between the developer and prospective real estate buyers,” remarks Rapoport.

As many new developments are being presold before their construction in Cambodia, the end buyer is instilling a lot of trust in the developer to provide all features promised when the apartment, condo or serviced unit finally becomes available for new tenants. Tales of missing features when the development is finally ready for occupancy are rife throughout the industry –for instance, gym space provided as according to the presale project specifications, but no equipment to be seen at the final launch, or much cheaper branded equipment than first promised; previously touted roof top pools that are cut in final budget considerations; and the arrival of new management of serviced condos and apartments that don’t hesitate to ignore earlier promises of products and services once the project welcomes its new tenants.

For this reason, says Rapoport,“the developers we work with increasingly want to see the gym constructed and fitted as soon as possible.” The reason being, “if the potential buyer comes to view the project mid construction, and the gym on the fifth floor has already been fully fitted with international standard equipment, even while the rest of the building remains a work in progress, the buyer has already witnessed the developer fulfilling promises within the presale specs.”

Cambodian property hotter than ASEAN average ahead of AEC

Read Original textThu, 27 August 2015

southern-asiaWith the ASEAN Economic Community (AEC) set to commence at the end of this year, promising deeper cross-market potential for property investment, the region as a whole is experiencing a cooling effect—with the exception of Cambodia, which shows strong growth numbers according to property consultancy Knight Frank’s latest Asia Development Index.

The report states that during the first half of this year, the price for residential sites quantified across ASEAN slowed from 3 per cent growth to 1.1 per cent growth compared to the previous six months. Meanwhile, prime office space increased from 2.6 per cent to 3.6 per cent in the region.

The high-end housing markets in Singapore and Malaysia have been softened to curb speculation by measures such as the implementation of Malaysia’s Goods and Service Tax.

Indonesia, on the other hand, has been hampered in the residential sector by an economic slowdown which has damaged consumer confidence.

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In addition, Bangkok’s market has shifted towards the luxury condominium sector that saw continued capital appreciation and higher profit margins, which resulted in slower, yet more sustainable growth.

Cambodia’s land prices, however, have surged by 14.1 per cent for residential, and 9.7 per cent for commercial land respectively, marking the biggest land price hike of all countries analysed.

Knight Frank’s Cambodian country manager Ross Wheble explained that the regional cooling “has benefited [Cambodia with] an influx of both foreign developers and investors seeking to take advantage of the comparatively low property prices and the relative ease at which foreign buyers can acquire freehold property (above ground floor level).”

Nevertheless, the report added that growth in Cambodia has decelerated in the second quarter of this year, suggesting prices may have reached their peak and will likely level off leading up to the AEC.

As to why prices are appearing to peak, Wheble explained the sales rates of newly launched condominium projects for the first half of 2015 compared to 2014 “have eased.”

“Which we believe is partly attributable to the increasing selling prices of newly launched developments suggesting that market prices in prime locations are reaching their peak.”

The report also noted that while office rental rates in Cambodia have remained flat, approvals for new developments have been the driving force for pushing commercial property upwards.

Wheble added that the rising value of commercial land was mirrored by planning policy while speculation over future growth potential of specific locations played a part in the formation of residential landprices.

However, he added “it is only once these future projects come on line that we will be able to accurately gauge the level of demand within the commercial sector.”

As the often touted AEC marches closer into taking effect and markets across the region have shown mixed results, Wheble said that those developments are more symptomatic of individual market conditions as opposed to the overall level of confidence leading up to the end of this year.

The Sihanoukville MAKEOVER?

Read Original textThu, 20 August 2015

sv-containersAiming to attract investors to broaden the Kingdom’s manufacturing base and to boost the country’s industrial development, the government is alledgedly preparing a master plan to turn Sihanoukville province into a new special economic zone, said an official.

The advisor to the Cambodian government, Dr Sok Siphana, gave a speech last week addressing the government’s plans to shape Sihanoukville province into a primary hub for trade, logistics and manufacturing. He said that while the master plan, under the responsibility of the Council for the Development of Cambodia, is set to be finalised by 2018, it needs to be carefully planned and executed.

Along with setting up a seaside special economic zone, the master plan aims to enhance the infrastructure of the country’s largest port, National Road 4 and Sihanoukville International Airport.

Siphana said that a master plan for Sihanoukville province would enhance the viability of Cambodia’s coastline.

“Usually, when it comes to industrialisation, we are talking about exporting, which means a [proper] management of the industrialization on the coast is a good thing,” he said.

These developments, he said, could help invigorate some of Cambodia’s flagging industries like agriculture.

“[For example,] the rice industry’s setback isn’t due to poor rice quality, it is due to the high price of transportation, which is why the government seeks to decrease the costs,” he said.

Last week, it was announced that an expressway between Phnom Penh and Sihanoukville will be developed to ease traffic on National Road 4. Under the Chinese firm Henan Provincial Communications Planning, Survey and Design Institute (HPCPSDI), the construction is set to begin next year and finish by 2020.

Nevertheless, Siphana acknowledged that within Cambodia’s development, the high cost of electricity is still a major impediment that needs to be addressed.

“In the new Industrial Development Policy, the government is finding a solution for the high price of electricity. By 2018, the government will have lowered the price,” he said without providing details.

While the master plan is apparently being drafted and road construction is set to begin next year, more flights to Sihanoukville International Airport have been arriving, showing an increased tourist and investor interest in Cambodia’s third largest travel destination.