\nSolid economic growth and strong foreign investor demand are helping to drive Cambodia\u2019s condo boom, but some worry it could lead to a glut<\/p>\n
Cambodia\u2019s real estate market is heating up, especially in its capital Phnom Penh, with foreign developers from China, Singapore, Taiwan and Korea looking to expand their footprint in the fast-growing city.
Solid economic growth and strong foreign investor demand are helping to drive Cambodia\u2019s condo boom,...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-10114","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-2D8","jetpack-related-posts":[{"id":12928,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/12-tips-for-investing-in-cambodia-property\/","url_meta":{"origin":10114,"position":0},"title":"12 tips for investing in Cambodia property","date":"May 13, 2016","format":false,"excerpt":"\r Here are some things to take note of before you invest in the Kingdom Sunrise over downtown Phnom Penh Cambodia is a rapidly developing market, and many investors with lower budgets and higher risk appetites are looking closely at this country to make their next pot of gold. Tip\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16860,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/how-cambodias-real-estate-sector-will-fare-in-the-aec-era\/","url_meta":{"origin":10114,"position":1},"title":"How Cambodia\u2019s real estate sector will fare in the AEC era","date":"June 17, 2016","format":false,"excerpt":"\r Boom times ahead for the Kingdom, but is supply meeting demand? Phnom Penh (Image credit: ASEAN Travel) At the tail end of 2015, Southeast Asian nations inaugurated the ASEAN Economic Community (AEC), a borderless market for commodities, services, capital, and labour between 10 of the world\u2019s fastest-growing economies. Long\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18830,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/why-property-developers-should-keep-a-beady-eye-on-cambodias-southern-coast\/","url_meta":{"origin":10114,"position":2},"title":"Why property developers should keep a beady eye on Cambodia\u2019s southern coast","date":"July 6, 2016","format":false,"excerpt":"\r Cambodia\u2019s southern coast is finally getting some overdue attention Sihanoukville\u2019s beaches have long been a draw for tourists. Image credit: Damian @ Flickr Long overlooked for the historical beauty of Siem Reap and the bustle of Phnom Penh, the province of Sihanoukville has been earmarked for more foreign investments.\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":23829,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/is-phnom-penh-at-risk-of-growing-too-fast\/","url_meta":{"origin":10114,"position":3},"title":"Is Phnom Penh at risk of growing too fast?","date":"August 24, 2016","format":false,"excerpt":"\r With developers eager for a slice of Phnom Penh pie, is the city\u2019s growth spurt too quick? Independence monument in Phnom Penh. Image credit: khlungcenter \/ Shutterstock.com A surfeit in condominium supply continues to raise suspicions of a bubble encapsulating Phnom Penh\u2019s luxury residential property market, according to CityLab.\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":132612,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/cambodias-property-sector-rises-above-politics\/","url_meta":{"origin":10114,"position":4},"title":"Cambodia’s property sector rises above politics","date":"March 15, 2019","format":false,"excerpt":"\r Last year was the one many hoped would see the political tide turn in Cambodia. But as Hun Sen chipped away at Cambodia\u2019s thin veneer of democracy in the months leading up to last year\u2019s election, it was clear the status quo would remain unchallenged. Hun Sen crushed the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":29941,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/more-optimism-urged-on-cambodias-property-market\/","url_meta":{"origin":10114,"position":5},"title":"More optimism urged on Cambodia\u2019s property market","date":"October 14, 2016","format":false,"excerpt":"\r Make room for growth Phnom Penh at night. khlungcenter\/Shutterstock A seeming glut of condominiums on the\u00a0Phnom Penh residential market\u00a0should not be cause for much naysaying, and grim prospects on the Cambodian property sector are overstated, a leading property analyst in the country said. In an interview with The Phnom\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/10114"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=10114"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/10114\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=10114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=10114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=10114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nFor Singaporean developers, restrictive cooling measures in the city-state, as well as the passing of legislation some years back allowing foreigners to own Cambodian property, have been the main pull factors for companies such as Oxley Holdings, Teho International and TA Corporation to develop large-scale commercial and residential projects in Phnom Penh.
\nUnder the Foreign Ownership Property Law, foreigners can own upper-floor units, but not ground floor units, and up to 70 percent of a condominium project.
\nAccording to property consultancy CBRE, this restriction has little impact on foreign buyers, considering that apartments are usually not built on the ground floor.
\nOutperforming the neighbours
\nIn its inaugural \u201cCambodia Real Estate Highlights\u201d report, Knight Frank said it expects the country\u2019s economy to grow at an average of seven percent year-on-year until 2018, outperforming other economies in the region. Much of the growth will come from the manufacturing, agriculture, tourism and construction sectors, with the latter helping to boost the fledgling property market.
\nMore: Low rise Phnom Penh could soon be home to ASEAN\u2019s tallest building
\nToday the city of Phnom Penh is a hive of building activity, \u201cdotted with mid- to high-rise projects under construction,\u201d says Sofia Perez, research and consultancy manager at Knight Frank Cambodia.
\nShe notes that \u201c11 condominium developments were launched in H2 2015, which will add 1,768 units to the existing stock\u201d, in contrast to the 2009 and 2010 period, when only 732 condo units were put up for sale.
\nOver the next four years, Knight Frank expects the supply of new residential apartments in the city to surge by a whopping 641 percent. Meanwhile, CBRE believes that Cambodia\u2019s condominium market offers great potential, and expects more than 9,000 units to enter the market between 2015 and 2018.
\nHowever, with thousands of units expected to be ready in the next few years, some analysts are warning of a possible oversupply.
\n\u201cThere are growing concerns about a potential oversupply in the near future, with many anticipating supply to quickly outpace demand. This can be attributed mainly to limited local market demand coming from high-net-worth individuals and expatriates living in Cambodia, which has forced many developers to target the overseas market,\u201d said Perez.
\n\u201cTaiwanese, Chinese, Singaporeans, Japanese and Malaysians are some of the main overseas investors buying the majority of the residential units.\u201d
\nIn addition, Knight Frank revealed that many developers are looking to increase sales by offering incentives such as upfront discounts, furniture packages and guaranteed rental returns.
\nMore: The good, the bad and the ugly in Phnom Penh\u2019s property market
\nCondo prices up; still much cheaper than in Singapore
\nThe recent launches of a few major projects have pushed prices of condo units upwards, noted Perez. But prices are still significantly lower compared to Singapore. For instance, high-end units in central locations are going for more than USD279 per sqft, with some penthouses priced at USD465 per sqft, said the consultancy.
\nAs for rentals, high-end condominiums in the city centre can command anywhere between USD1,345 and USD4,500 per sqft for one- to four-bedroom units, according to figures from the fourth quarter of 2015, added the consultancy.
\nMeanwhile, property investors have been recording rental returns of between five and seven percent, and capital growth of between five and 7.5 percent per annum.
\nForeign property firms move in
\nAs confidence in the property market continues to grow, more real estate agencies are expanding into Cambodia to support marketing efforts. US-based Century 21 opened a representative office in Phnom Penh in 2014, while global firm Savills joined forces with Cambodia\u2019s Keystone Property Consultants last year.
\nProperty developers from Singapore are also recognising Cambodia\u2019s great potential for growth.
\n\u201cWe are of the view that Cambodia\u2019s property market exhibits the right fundamentals for growth: a robust GDP supported by foreign investments, translating into rising demand for office space; and the rising affluence of Cambodia\u2019s young middle class, translating into demand for quality residences,\u201d said TA Corporation\u2019s executive director and CEO Neo Tiam Boon.
\nMore: 6 reasons why Phnom Penh\u2019s western district is quickly moving on up
\nThe group just launched The Gateway, a mixed-use development located in Phnom Penh\u2019s central business district that comprises 299 strata-titled office units and 572 one- to three-bedroom apartments. It also comes with guaranteed rental returns of 12 percent over two years for the residential units, and 16 percent for the office units.
\nCurrently, about 30 percent of the residential apartments and 40 percent of the office units have been sold or reserved. Aside from Singapore, the project will also be marketed elsewhere in Asia, including Taiwan and China.
\nOxley Holdings is also seeing strong interest for its two mixed-use developments in Phnom Penh, The Bridge and The Peak.
\nSo far, almost 100 percent of the residential units and more than 70 percent of the Soho apartments at The Bridge have been sold, said Oxley.
\nThe developer also revealed that phase one of The Peak, comprising 507 residential units in Tower 1, is close to 50 percent sold. The 55-storey freehold project features two residential towers with a total of 1,014 units, a 15-floor office tower and a 300-room hotel, all above a five-storey retail podium.
\nProperty buyers of residential units at The Peak are guaranteed a 12 percent net rental return for two years, subject to conditions.
\n\u201cWe have a good mix of local and foreign buyers for both The Bridge and The Peak. Cambodian buyers contribute close to 50 percent of the total sales. Other than Singaporeans, Taiwanese and Malaysians also form part of the foreigners who buy at these two projects,\u201d a spokesperson for Oxley told PropertyGuru.
\nThis article, written by\u00a0Romesh Navaratnarajah,\u00a0was first published in the print version\u00a0The PropertyGuru News & Views. The online version appeared in full on PropertyGuru.com.sg on 11 March 2016.
\nNow read: What you didn\u2019t see on TV during the Cambodia Property Awards 2016
\n
\nSource : property-report.com
\nRead more…Why Phnom Penh is Asia\u2019s next top city for real estate<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"