Forgotten risk, what condo buyers overlook

Thu, 10 December 2015

siman-griffithsIn their purchasing decision condo buyers often pay little or no attention to who will take charge of property management upon completion of the development and what quality property management actually costs. Without effective property management and the necessary according fees, the impact can be catastrophic on re-sale value and the ability to rent a condo, according to Simon Griffiths, associate director at CBRE Cambodia.

Exclusively for Post Property, Griffiths explains why developers and condo buyers in Cambodia should consider more on property management, management service fees and what it really means to their purchasing decision.

“While the real estate market in Cambodia is ‘hot’ and new condo developments are rising out of the ground all over Phnom Penh, a rarely discussed topic is how these new condos will be managed once they are built and online. With property management (PM) being a decisive factor in the enjoyment of a condo, not to mention potential re-sale values and rental returns, the topic neither receives attention nor interest from many buyers. Understandably and rightfully so. Price, location, developer reputation, facilities and amenities are key determining factors on which a condo buyer will make a ‘buy or not’ decision. However, property management and according fees are crucial components when it comes to owning a condo.

In one sentence: Buyers beware of low management service fees (MSF)!

Consider buying a Porsche sports car. Would you then use the cheapest gasoline off a street vendor or pay the extra 20 cents a litre for the premium gasoline that is meant to protect the engine? Would you clean your car regularly at the additional cost or let it be covered in dirt? You would want to protect and enjoy your investment.

The same principle holds true for property investment. Low cost PM will manifest in low quality PM and will quickly become visible to buyers and renters even in the short term.

With poor management, the value of a condo investment is at risk, not to mention the enjoyment of anyone living at the condo. Why then, so often, do buyers invest in premium condos and then actively seek-out and desire lowest price MSF’s?

Let’s set put this discussion in Phnom Penh’s market context. The often so called ‘standard market price’ for condo management service fees in Phnom Penh is set between $0.5 and $1 per square metre and buyers commonly consider $1 per square metre overly expensive.

Consider then a scenario with 100 condominium units at 100 square metre each. If you manage this building at $0.50 per square metre the PM monthly budget is $5,000. This will need to cover a building manager, accountants, handymen, technicians; building insurance; cleaning; 24 hours security; cleaning materials, mechanical and electrical parts and so much more. Simply put, this budget may keep the building functioning but only just, and the initial ‘on the surface’ benefit of a low MSF would quickly transpire into low safety standards, broken machinery and equipment and a poor condition building in a short space of time.

Now, would you desire a low price MSF or consider paying more for quality?

But even at $1 per square metre MSF for the building in the above scenario, while it would be possible to provide functional PM, there is little room for high quality services and sacrifices would need to be made in cleaning, security and mechanical and electrical maintenance to keep within the budget, thus showing that the MSF so called ‘market rate’ (in some cases) is artificially low and being driven down by buyers who are mistakenly prioritizing ‘low price’ PM as a positive factor in a purchasing decision.

In effect, condo buyers’ MSF expectations are often too low set by a ‘market rate’ that makes it difficult for developers to truly deliver promises of high quality. Couple this with the successive increases in minimum wage levels, and achieving a quality PM service becomes an increasingly difficult proposition.

In summary, the so called ‘market price’ for MSF in Phnom Penh in many cases is not feasible and creates a situation where there is a disconnect between buyer expectations and what will actually be delivered in terms of PM service quality.
The result is a situation where lowering MSFs effectively may secure sales but creates unrealistic expectations. Selling high quality PM with a low budget makes it almost impossible to deliver on such promises.

So how should the developers and buyers think and behave?

Developers should not be looking for the easy or quick way out of setting an unrealistic MSF to achieve extra sales. This is flawed and would inevitably lead to unsatisfied buyers come the time when the building opens and is short sighted. Developers need to invest time, energy and knowledge to ensure relevant PM services are installed and embedded within a development before they ‘exit’ and ensure MSF’s relevance to the quality of the development.

Buyers should consider more than the bottom-line price in relation to MSF. Consider your expectations, quality and what you want from your condo investment. If you desire a low price, expect low quality and manage your expectations accordingly. Read Original text

Yours sincerely,

Simon Griffiths
Associate Director
CBRE Cambodia

Mortgage Matters Part 2: What’s in a Home Loan

Thu, 10 December 2015

mortgageapplicationformThere are three basic components to any mortgage: the home loan amount, interest rate, and loan term. You must understand these clearly before you start the home loan application is here to help with a very simple guide.

The Loan Amount:
The loan amount is the principal amount that you want to borrow. Banks in Cambodia generally give a loan of up to 70% of the property value.If you combine the principal loan amount and the interest amount, you will then know the overall loan size. Most home loans are usually repaid via monthly installments. The repayment comprises two parts. One part is for the repayment of the principal amount; the other part is for the repayment of the interest.

The Interest Rate:
The interest rate is very important to understand! It is the percentage of annual interest that you have to pay on the total loan amount. It can be a fixed rate, a flexible rate, or a combination of both.

The Loan Term:
The loan term is the duration of time that you can take to completely repay the loan. Loans generally range from 15 to 30 years in Cambodia.

Why is my Bank property valuation different than my Agent Valuation?
It is confusing how valuations can differ depending on who does it, right? Your real estate agent will give you one valuation figure – and then your banks’ valuationarrives looking much different… Why?

The Bank Valuation:
If your home is or soon to be mortgaged, your lender/bank will need to value it.

This is necessary to give the lender/bank confidence that your asset offers sufficient security against the borrowed amount of money if, for any reason, you cannot pay your mortgage and the lender must sell the property to reclaim the debt.Hence, a bank valuation will usually be quite conservative, sometimes 10 to 20 percent less than the current selling prices of comparable homes in the same area.

The Selling Agent’s Valuation:
Real estate agents are commonly asked to assess the market value of your property, and many have some training in how to conduct proper appraisals of property. This agent valuation will often be used to decide who to engage to sell your home.

Before completing your valuation, the agent will typically inspect your home and research comparable sales in the local suburb or commune before producing a report and sale price estimation. This price guide is useful to a vendor when deciding what price to advertise.

However, the bank is unlikely to respect this valuation without a follow up appraisal by one of their valuation specialists, or an independent appraisals agent. Of course, the agent wants to help you get a good price – because this means more commission for them, and a happy customer – but these over-confident valuations can be dangerous to a lender.

If you want to read more of the best home loan, valuation and property finance advice, check out today. Read Original text

Serious investment for Sihanoukville

Thu, 10 December 2015

playgroundSihanoukville is becoming more than just a place to soak up the sun on a slow weekend; it’s attracting the interest of serious investors looking to cash-in on a growing middle class in the coastal city.

Trade and tourism are the city’s biggest revenue generators and with growing numbers of tourists and business people who come to invest in Sihanoukville, especially from China and the rest of Asia, property developers are looking for new opportunities to capture these growing markets.

One of the upcoming properties set to make an impression on Sihanoukville is D’Seaview, a 735-unit condominium to be located near Sokha Beach. The project is backed by Singaporean agribusiness company HLH Group Ltd under their newly formed Camhomes branch.

Through private subsidies, the company is marketing units as low as $33,000 for Cambodian citizens – but this subsidised investment opportunity is running out at the end of December 2015. Construction on the project is expected to begin later this year, with a completion date of 2018.

New families, young professionals and other prospective buyers will have the chance to secure one of the beautifully appointed units on offer at D’Seaview from as little as $675 per square metre.

D’Seaview will boast state-of-the-art facilities including a swimming pool, a fitness centre and sauna, function rooms and a children’s playground, all catering to a modern family lifestyle and all with a view over the ocean.

Real estate experts say major condominium projects such as D’Seaview will bring international standards to the city and draw more sophisticated investors.

Clement Dupont, a property market watcher and investor based in Sihanoukville, said D’Seaview will give the city a new image, one of luxury and liveability rather than just an affordable holiday destination.

“This will make people realise that Sihanoukville is a worthwhile place to invest money and attract homebuyers who are looking to live and work in a comfortable, classy environment, as the city’s economy grows from year to year.”

“It’ll definitely be interesting to see how the property market pans out once D’Seaview is complete,” he added.

Content image - Phnom Penh Post

In the first eight months of the year, Sihanoukville airport handled a total of 65,698 passengers, with total arrivals at 35,882, up 149 per cent and 140 per cent year-on-year, respectively. Lucky Air recently launched direct flights from Kunming to Sihanoukville, becoming the first Chinese carrier to offer year-round regular scheduled service to Sihanoukville.

“Many Chinese have come here to invest and live and work,” said Y Thearin, a Sihanouk Provincial Hall representative.

“Their investment in the city has become important to the way Sihanoukville is moving forward,” he added.

The Chinese influence is certainly becoming noticeable as Chinese-backed casinos and hotels multiply rapidly. One of the largest properties to open recently is the 135-room White Sand Palace, which will also feature a casino set to be open next month, in Occheuteal.

The casino industry has doubled since last year to 15 casinos, with an additional five applications pending approval. Spurring this growth is the potential of online gambling which is being offered from the majority of Sihanoukville casinos, says the spokesperson Ministry of Economy and Finance, Ros Phirun.

Paralleling Sihanoukville’s growth is its property market, with land prices going up fast especially in areas where infrastructure is being improved, says Ruslan Gronov, manager of Sihanoukvilla Real Estate and Consulting.

“The new road that is being upgraded from Sokha to Independence beach is resulting in more land available for sale, while prices are also going up around Otres beach where the road joining National Road 4 and the airport are going up.”

Gronov says the rental market for small residential properties has not changed much amid the city’s growth but rental prices for commercial properties and full buildings have gone up considerably since November last year as the hospitality industry thrives and Chinese business people living in the city push up demand.

Gronov said the lowest price for a one-bedroom apartment with a kitchen is around $250 per month, located in the downtown area away from the beach. For a similar property near the beach the price is around $100 more.

“If you rent commercial and full building, the prices have changed a lot but for residential and small houses it’s the same.”

“It is a good time to invest here. Some areas are still growing and the price is growing fast.”

Content image - Phnom Penh Post

Gronov added that the cheapest land prices are around $200 per square meter for land not close the beach, while some of the highest prices are in Otres and the Golden Lion, the city’s most prominent landmark just a short walk away from Occheuteal Beach where land can go for about $1,000 per square metre.

Sihanoukville has maintained a crucial position in the country’s trade and manufacturing sectors and is set to capitalize on this as the government looks to construct a 190-kilometre-long, 25-metre-wide expressway linking Phnom Penh and Sihanoukville on National Road 4. This project is said to begin next year and finish in 2020.

Sihanoukville is home to the country’s largest port and one of the largest special economic zones, but set to create competition is the development of the Stung Hav Port.

LCH Investment Group acquired the more than one thousand hectare Stung Hav site in 2005 and began in 2007 constructing the site’s small port about 4 km from the entrance. The smaller port opened in July 2012 and handles general cargo but not containers.

However as of January this year, American and Singaporean investors pledged investment that will result in construction of the port starting in January 2016.

This will take approximately two years to build and once complete, hopes to attract the business of around 75 factories in the Sihanoukville Special Economic Zone who currently use the Sihanoukville port for shipping.

Management says the first step will be to build the International port next year and then the economic zone, and hopes to offer more competitive prices to the main Sihanoukville Port and SEZ, which has around 75 mainly Chinese-owned factories who currently use the Sihanoukville port for shipping. Read Original text

CSX lures more panel valuers

Thu, 10 December 2015

csxAs interest grows in the nascent Cambodia Securities Exchange (CSX) amid announcements of new floats tentatively scheduled for 2016, real estate agencies push for approval to become panel valuers—the sole legal mediator to value property holdings while pursuing an IPO.

Thus far, members of just six real estate agencies have been granted approval for IPO appraisals in Cambodia: VTrust Appraisal, Real Estate VMC Cambodia, CBRE Cambodia, Bonna Realty Group and the most recent entrant joining this month, Knight Frank Cambodia.

Although activity on the CSX was initially slow, with the Phnom Penh Water Supply Authority listing in 2012 and Taiwanese-owned Grand Twins International listing in mid-2014, Ross Wheble, country manager for Knight Frank Cambodia, believes that the recent activity indicates growing confidence in the Cambodian economy and finance industry as a whole. “[This] is a positive sign for Cambodia’s real estate and construction industry,” he said.

The recent announcement that Hong Kong-based developer, Eastland Development, expressed interest in listing on the CSX follows a number of similar announcements by companies such as the Phnom Penh Special Economic Zone (PPSEZ), TY Fashion and Sihanoukville Autonomous Port.

If Eastland’s promises come to fruition and other real estate developers follow suit, “this shall enable investors who may not be able to afford to buy a property a chance to participate in the growing real estate sector by indirectly investing through the purchase of shares within real estate companies,” said Wheble.

Regardless if a company like Eastland pursues a listing, a publicly traded entity would bring in the much-needed transparency to a vague property market where financial capital and level of investment are often kept in the dark. But besides that, it would allow more investors to enter the market without having to put down the large sums to acquire property directly—and at lower risk.

“Small investors will have a chance to invest in the property market,” says Kuy Vat, president of VTrust Appraisal. Meanwhile, “the developer can mobilize more cash and spread the risk. Of course, the CSX will also receive a boost in public confidence with the announcement.”

Simon Griffiths, associate director at CBRE Cambodia, suggests that for developers with an established and diverse portfolio, new projects in the pipeline, and a well-financed organisation, “risk is diversified and can be stabilized across sectors to some extent” by joining the stock exchange.

While diversity is important, especially in the oft-turbulent real estate and property development market, “as we saw during the last global economic crash,” said Griffiths, a certain amount of risk will always remain.

Content image - Phnom Penh Post

With growing interest in the Cambodian stock market, the CSX could finally gain steam. Heng Chivoan

“Buyers of any stock would consider this and hedge their bets,” he said.

However, if more developers join the CSX, Griffiths believes that it would allow for investors to capitalize on developments. It could also issue in the unique potential for Real Estate Investment Trusts (REITs)—a type of security that invests in real estate by combining property or mortgages, thus providing more liquidity and high dividend yields.

While Kuy believes that there would certainly be an increase in liquidity, additionally, it would also provide a secondary market for investors who want to easily trade out of their investment.

“This means adding more lubricant to transactions [across other] sectors,” he said.

But while it is highly debatable if foreign property developers are even considering listing,property valuation is an important step in the IPO process that requires companies to open their books and disclose their assets.

“A company is required to have its real estate assets valued to determine its Net Asset Value (NAV),” explained Wheble.

But with only six accredited panel valuers currently operating in Cambodia, Griffiths highlighted the high standards required to gain entrance into the club.

A foreign agent has to be security checked in their home country and in Cambodia, and academic and relevant valuation experience and qualifications need to be verified, he said.

One such accreditor that can audit an agent or a real estate company that wishes to be a panel valuer, is the Royal Institute of Chartered Surveyors—a London based organization that values property worldwide.

“[Royal Institute of Charted Surveyors] adheres to strict and internationally recognized valuations guidelines, practices and methodologies,” said Griffiths.

For smaller, local real estate agencies, the demand for CSX valuations remains too small of a market to service, with qualification thresholds currently out of reach.

“Until this stock exchange grows significantly,” Kim Heang, president of the Cambodian Valuers and Estate Agents Association, suggests, “local agents will continue to focus on [regular] property valuation.”

“It is great to have more, and more professional, panel valuers in the industry - so that we can compete with professionalism and quality rather than on price,” said Kuy. However, “considering the market and volume of assignments currently available, the CSX valuations market for local agents likely won’t grow dramatically in the short term.” James Whitehead,

Affected business owners push for faster repairs of National Road 1

Thu, 10 December 2015

view-from-shopWith her hand blocking the glare of the sun, Kuy Peou gazed steadily at the dust kicked up by the slow stream of vehicles lumbering over uneven surfaces trying to get into Phnom Penh.

“When I first came here, I couldn’t sleep. This construction project is really disturbing as there is so much dust, traffic and noise pollution from vehicles,” she said.

While the current construction along National Road 1 on the outskirts of Phnom Penh has left the road torn up by heavy machinery, with endless wafts of dust coating local storefronts as bumper to bumper traffic spews dark clouds of toxic exhaust, Peou is just one of the many business owners who hope the road will soon be paved. After opening a motorbike shop last October, and expecting to capitalise on the promising business prospectives along Cambodia’s main artery to Vietnam, her business has been hindered by the sheer lack of accessibility. She holds out hope and is confident that once the road is finally completed, business will take off and her investment will be worth it. Until then, the reality is that she can barely stay afloat.

For Keo Somphearak, a motorbike cleaner who has been living on National Road 1 for three years, the reality is much more daunting as his business has completely grinded to a halt.

“My business has to cease to operate because of this construction,” he said. “I want this project to move faster so that I can start my business as per normal.”

While Somphearak claimed he has been compensated for his loss of land and business along the 4-kilometre stretch of road that is being developed, with the government having paid him $500 per square metre, his savings are beginning to dwindle and he is eager to get his business back up and running.

“Once it is finished, business will be better as the road will be bigger and I will have more room to clean bikes more thoroughly,” he said.

But it is not just small business owners who have had to adjust to the bothersome project while waiting for construction to be completed.

Sim Senacheat, a director of a local branch of Prasak Microfinance, has already relocated his business further north. While he said that business was dramatically affected at first, with his new location, it is no longer a problem.

“The current road is considerably hard to travel on, and construction is expected to take up to two more years,” he said. “While it doesn’t affect our operations, it doesn’t make it any easier.”

Chhim Phalla, director of the Ministry of Public Work’s Department of International Cooperation who is responsible for overseeing the Japanese-funded expansion, said that the government has already compensated an undisclosed sum to homeowners and businesses that have had their land reclaimed for the road expansion, with only one or two cases left awaiting payouts.

Content image - Phnom Penh Post

Until completion, National Road 1 will be heavily congested. Heng Chivoan

“The first is the Total gas station and the second is the residence of an official who resides along the road in front of Chbar Ampov pagoda who has yet to receive compensation from the government,” he said.

While the expansion is part of an overall plan to speed up traffic to the capital as ground transportation becomes more important, he said that the construction has faced some unforeseen difficulties. One issue is that homeowners and businesses that have already received compensation have refused to vacate their properties, thus clogging up the ability to speed up construction. Another problem is ensuring that those who live in the surrounding areas still have access to electricity, as the spider web of black cords nesting on the electrical poles, have to be carefully relocated.

“The project will be finished by March 2017, but the actual progress is already moving faster than expected, so construction should finish before then,” he said. The expansion will turn the two-lane highway into a four lane, and will greatly ease congestion entering the capital, he added.

He explained that the $10 million development is not cutting any corners and that the road will consist of a 20-centimeter-thick layer of concrete, adding that the road is designed to handle heavy traffic.

Chrek Soknim, executive director of Century 21 Mekong, said that the area has long needed investment in infrastructure, and while the growing pains may hurt local businesses for now, once completed the land will be a prime development destination.

“With a new road, this area will see high development in terms of property, and the surrounding areas will benefit as well,” he said, adding that prices for land have already jumped from the initial price range of $150 to $300, to a range of $400 to $700 per square metre.

“But because the infrastructure is still limited, it will take time before development takes off,” he said.

Meanwhile, as the jackhammers and cement trucks continue to pile in, local residents like Peou have no choice but to wait idly by, gazing at the development that she hopes will make the wait worthwhile and her business profitable.

“The construction really stresses a lot of us out. I hope it finishes sooner so life can get back to normal,” she lamented. Read Original text


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Office Building for rent along Sihanuk Blvd
- Stories 9.5 floors
- Building size  8m x 16m
- Total size: 1,216 sqm
Price : 18,000 $ /month

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សូម​បញ្ជាក់​ថា ក្រុមហ៊ុន​អចលនទ្រព្យ ឆៃ​លី​ន ស៊ា រៀល​ធី ជា​ក្រុមហ៊ុន​ដែល​មាន​ជំនាញ​វាយតម្លៃ​អចលនទ្រព្យ​ច្បាស់ ដែល​បាន​ចុះបញ្ជី​ពាណិជ្ជកម្ម​លេខ ០៥៣៥/២០១៣ ព​ណ​.​ចប​ព​, មាន​អាជ្ញាប័ណ្ណ វាយតម្លៃ​អចលនវត្ថុ​លេខ​១២២ សហ​វ​.​ឧ​ហ​, អាជ្ញាប័ណ្ណ​សេវាកម្ម​អចលនវត្ថុ​លេខ ១១៩ សហ​វ​.​ឧ​ហ​, ប័ណ្ណ​ប៉ាតង់​សម្រាប់​សេវាកម្ម​អចលនវត្ថុ​លេខ​០១២៧៦ អ​ព​ដ​/​ស​ខ​/​ចម​, និង​វិ​ញ្ញាប​ន​ប័ត្រ​វាយតម្លៃ អចលវត្ថុ​លេខ ០២៥៣៥ អ​ព​ដ​/​ស​ខ​/​ចម និង​ជា​សមាជិក សមាគម​អ្នក​វាយតម្លៃ និង​សេវាកម្ម​អចលន វត្ថុ​កម្ពុជា​លេខ ០០២៤ ស​.​វ​.​អ​.​ក​។ Read Original text

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Should you buy into a property boom?

Thu, 3 December 2015

propertyboomEach type of property buyer has a unique set of considerations before deciding whether to buy during a property boom. With that in mind, wants to advise each type of property buyer, respectively.

The first-time home buyer:
First-time home buyers are generally the most price-sensitive type of buyer, because they may not have any equity (current properties) to use for a mortgage on their next property investment. Therefore, they are usually dependent on only their deposit savings to buy a new property.

First-time home buyers have likely delayed their purchase, hoping that the market is going to adjust – downwards. Unfortunately, though, in a property boom, delaying a purchase on a rising market often only costs the first-time home buyer more in the long run – as the average property prices don’t stop rising.

A “change of scenery” buyer:
In general, most people moving will choose another property in their local area. However, many people look to escape the congestion of urban areas as they begin to grow up – in search of a quieter life on the outskirts of the city, suburbs, by the beach, near a forest or on a farm.

Making a successful lifestyle-change property purchase will depend on how familiar you are with that new market, as well as the state of the property market in which you are selling your current property.

Strong selling conditions in central Phnom Penh, for example, or the extremely well-valued Chamkarmon district mean it’s the perfect time to sell for those considering a lifestyle change property – and wanting to move to a location outside the central city.

For example, trade in your high-valued villa property in BKK1, for a Borey home along Chea Sophara Road. Usually, prices are lower in areas outside the city, so selling in the city and moving to the country right now, during the property boom, means your purchasing power will be maximised.

You should be able to get a bigger and better property with more privacy, and be near mortgage-free – because you current home’s sale should cover purchase fees. No mortgage would also improve your lifestyle, remember – but you might be trading this pressure for a slightly longer commute to work.

The “downsizing” buyer:
The downsizer, those people looking for a smaller, cheaper home, is often in the best position to buy their next home during a property boom. The chief example of a downsizer is the retiree. Like a property up-grader, they tend to be selling at the same time as they are buying. However, the downsizer is lucky that their new home tends to be worth less than the one they are buying. Strong demand in a boom market will assist this type of property buyer because it means a maximum sale price is available. Thus, retirees and other downsizers are more likely to be in a position to put some money in the bank and buy a less expensive property.

The “property investor”:
Every property investor needs to ensure the money-return is sufficient before taking the plunge into even the strongest market. In a rapidly rising market such as Cambodia, that means keeping a strong head and not getting caught up in the boom fever.
One of the main factors influencing your decision will be whether you will also be selling in a booming market, since capitalising on demand for your existing property will boost the cash you have available to fund your next purchase.

Read more about how to approach your property investment decisions on today! Read Original text

Will foreign ownership laws spur FDI?

Thu, 3 December 2015

pp-sky-viewAs the ASEAN economy is slated to be the next engine of growth as China’s economy slows, matures and is likely to become consumer driven, Southeast Asian countries are clamouring to attract foreign direct investment. While foreign capital represents a huge engine for growth, with a cumulative average of 9.2 per cent annual rise spread out across Cambodia, Vietnam, Myanmar and Laos, countries are now relaxing long held property restrictions in order to boost their market appeal.

It is believed that as rules are eased, companies such as property developers, banks and providers of property-related services, like construction, maintenance, insurance and security, would naturally flow into the economy and boost it from within.

However, industry experts suggest that foreign investors in the region need more than just attractive ownership provisions to lure them into frontier markets.

“When referring to FDI, it’s more related to multinational companies investing in manufacturing, agriculture, infrastructure, the financial sector and commerce in general. Many of these companies do not want to own freehold property; if a company can secure a long term lease of 20 to 30 years and above, they are generally able to source financing from banking institutions and also payback on their initial investment,” said Ross Wheble, country manager for Knight Frank Cambodia

For this reason, Wheble suggests that “small alterations to foreign ownership laws on real estate in neighbouring countries won’t have significant impact on FDI flows into Cambodia. There are more pertinent factors that affect FDI such as political stability, skilled labour force, infrastructure, ease of doing business, and anti-corruption policies.”

Nevertheless, there has been much talk about how Myanmar’s recent historic elections, allowing for the country to be the predominant frontier economy in the region – which could be boosted if US sanctions are lifted.

Currently, Myanmar’s constitution establishes the state as the ultimate owner of all land. Yet, under the new Myanmar Foreign Investment Law, an investor may lease land for up to 50 years, with two possible 10-year extensions.

A Condominium Law that is currently in development in Myanmar but not yet in force, likely inspired by the Singaporean model, would allow a foreigner to purchase a condominium on the sixth floor or above of a co-owned building, up to a quota of 40 per cent foreign ownership of the total units in the property.

Now whether this law will come to fruition is speculative, Matthew Rendall, senior partner at ZICOlaw, believes even if they are adopted, implementation would take a long time before results could be quantified.

“The laws themselves will not be such a decisive factor for foreigners in deciding where to invest, but rather the market conditions and the implementation of those laws on the ground. Whereas ownership is usually a secure form of tenure, a test often comes in the legal security offered by leasehold,” he said.

Meanwhile, in Vietnam, freehold ownership by foreigners over land is prohibited by the constitution. Yet state authorised leases of between 50 and 70 years are widely available, especially for development projects, and renewable at the discretion of officials.

Further, pursuant to the Vietnamese Law of Housing 2014, a foreigner may now own a unit in an apartment or condominium building - if it is a no-more-than 30 per cent foreign owned building.

Cambodia, unlike its three neighbouring counterparts, has a freehold land ownership system for its citizens. Foreigners based in Cambodia are also allowed rights of ownership over certain properties, subject to 2010 Law on the Provision of Ownership Rights. These rights, however, are restricted to buildings that have obtained a “strata title,’’ which is available only to newly completed apartment buildings. Foreigners cannot acquire a ground-floor unit legally, and any foreign ownership allocation is limited to a maximum of 70 per cent of the units in any one co-owned building. Nevertheless, a foreigner lease term over landed properties can still be up to a 50 year maximum, with a 50 year renewal option included.

“It is very important that each country ensures that its lease agreements receive the full protection of the law and that possession acquired through leases receives the same protection as ownership offers,” said Rendall.

But competition further afield could also shake things up.

In Indonesia, Southeast Asia’s largest economy, foreign nationals are not allowed to buy property under current laws. However, recent statements from the government indicate that restrictions could be loosened by the end of the year. These new laws are expected to allow foreigners to buy apartments priced above $375,000, although they will still not be able to buy landed property.

But despite all these changes, Rami Sharaf, CEO of World Bridge International, believes that Cambodia doesn’t offer singular incentives, but the whole package, secure itself as prime destination for investors entering the frontier market.

“In Cambodia, there is very little discrimination between foreigners and locals in regards to company registration, taxes and customs duties. Meanwhile, the country is geographically central, with a young and motivated labour pool, and, of course, buoyed by the US dollar. Furthermore, Cambodian-based manufacturers still enjoy tax-free export to Europe because Cambodia is still classed as a less developed country.”

James Whitehead, Director of Content at Read Original text

Beautiful Sihanoukville

Thu, 3 December 2015

kohdekkoul-islandIn the distance on Otres Beach a golden runny sun slips behind the horizon. “Another day in paradise coming to a close,” remarked one tourist.

Sihanoukville is known for its tranquil beaches and idyllic islands and long been a destination for tourists and locals alike looking to escape the humdrum of Phnom Penh and Siem Reap.

The province boasts numerous beaches such as Otres, located about five kilometres from the town, and along the unspoiled Saracen Bay on the island of Koh Rong Samloem.

Visitors can pick from a variety of competitive tour packages that include a glass boat and fishing trips, while for those looking to travel in style, Sail Cambodia offers charter services on a 45-foot racing yacht Cygnet.

Similarly, groups can also hire private boats and go fishing or travel to and from the islands without a tour guide, an option popular among Cambodian families, travel agents say.

For those struggling to find their sea legs, an afternoon well spent with spectacular views can be had at Wat Leu temple, which sits on top of a hill about 1.5 kilometres northwest of the city centre.

Similarly panoramic views of Sihanoukville from a swimming pool, along with top-quality sushi, can be found at Victory Castle Villa and its restaurant Yamashiro.

But for a truly luxurious experience, it doesn’t get much more exclusive than Sokha Beach Resort. The hotel has a casino, three restaurants and six bars and two large swimming pools. While part of Sokha Beach is private there is also a section available to the public.

Only minutes away from luxurious Sokha Beach, the D’Seaview complex is beginning to take shape. Though in a prime location, this property by Singaporean developer Camhomes is not only affordable for the very rich but also for new families, young professionals and other prospective buyers.

Content image - Phnom Penh Post

Units are available from as little as $675 per square metre. Until the end of the year, Cambodian buyers may even enjoy a 50 per cent subsidy on their purchase reducing the price per unit from $66,000 to $33,000. Financing options to fit lower incomes are also available. Interested buyers are advised to make up their minds quickly as this special offer is running out at the end of the month.

Once finished, D’Seaview will boast state-of-the-art facilities including a swimming pool, a fitness centre and sauna, function rooms and a children’s playground, all catering to a modern family lifestyle and all with a view over the ocean in the heart of the port city.

When it comes to sampling the freshest seafood in the country that comes right from the port, Sihanoukville is the place to go.

The city is famous for its fish. Fresh red snapper, shrimp and crab are served at most of the restaurants at very affordable prices.

Early birds looking to bypass the popular fish market in the town can buy from fisherman who sell their latest catch by the shore in the morning.

Damien Pradayrol, general manager of the newly opened Chivas Beach Club and Sports Bar in Occheuteal, said having good food on the menu is crucial to keeping his more discerning clients happy.

The high-end bar, which has nine TV screens showing the latest sports programs, opened just one month ago but is already taking big bookings from Cambodian and Asian clients looking for refined food and entertainment.

“There’s no other place like this in Occheuteal. Everyone is trying to open in Otres so we thought why not set up here,” said Pradayrol.

Authentic European cuisine can also be found in Sihanoukville. The Italian restaurant, L’Osteria di Gino, offers homemade Italian meats and pasta dishes, while the French restaurant Susaday ages its own beef.

As the province grows in popularity, more flight and bus connections are being established, linking it to the rest of the country and region.

Content image - Phnom Penh Post

Sihanoukville International Airport now operates flights from South Korea, Singapore and China, as well as daily flights to Siem Reap.

Pan Sophy, co-owner of Wonderful Travel and Tours, says about 13 bus companies connect Sihanoukville to Phnom Penh, Siem Reap, Vietnam and Thailand.

The road to Kampot, another popular nearby destination, has been recently improved, cutting the time considerably to about one-and-a-half hours by taxi.

“Before the road was bumpy but now very easy to get there so more companies are offering tours to Kampot where you can see the pepper farms and see the river.”

The city also looks poised to benefit from greater investment as the government looks to capitalise on Sihanoukville’s infrastructure and accessibility to Phnom Penh.

Advisor to the Cambodian government, Dr Sok Siphana, said in August that the government plans to shape Sihanoukville province into a primary hub for trade, logistics and manufacturing, which also involves improving the connectivity to Phnom Penh.

To achieve better connectivity, the government signed a memorandum of understanding with China’s Henan Provincial Communication Planning, Survey, and the Design Institute Co. Ltd for the construction of a 190-kilometre-long, 25-metre-wide expressway linking Phnom Penh and Sihanoukville on National Road 4. This project is said to begin next year and finish in 2020.

Moreover, last month Korean developer Green Eco Energy Co. Ltd’s signed up for development the 275-kilometre-long, 20-metre-wide Sihanoukville expressway along National Road 3 that could begin as soon as next year. Read Original text