General Construction & Real Estate News

Phnom Penh's new apartments soar on high rents .

Thursday, 19 July 2012 Don Weinland.

.







Share


Real estate developments covered in green tarp have sprung up across the capital’s Boeung Kang Kong commune, and housing units are filling before the projects are finished, insiders said.

The value of construction approvals in Phnom Penh jumped by 557.5 per cent in March to US$150.5 million compared to a year earlier, according to a report from the Cambodia Development Resource Institute (CDRI).

The value of approved apartment, or flat, construction was worth $26.7 million, an increase of 855 per cent year on year.

Sun City Apartments, a 35-unit development in Boeung Kang Kong, has rented all but one flat even before the project has been completed, Sun City owner Channda Sok said yesterday. The units were put on the rental market about three months ago.

One-bedroom Sun City flats rent at $1,500 per month, two-bedroom flats at $2,500.

High rental yields compared to the low cost of land in Phnom Penh has boosted the construction market for flats, Sunny Soo, Knight Frank country manager, said yesterday.

Renters have not shied away from increasingly steep prices.

“There are still people willing to pay these prices in this market,” he said, adding that there are about 10 similar rental projects in Boeung Kang Kong alone. Soo could not confirm the CDRI figures for March.

The CDRI data showed that public, commercial, industrial and tourism-related construction was worth $122.1 million in March, a year-on-year increase of 604.3 per cent.

http://www.phnompenhpost.com/index....phnom-penh-apartments-soar-on-high-rents.html

Daun Penh and 7Makara see sharpest increases in value
Thursday, 16 August 2012 Seun Son



Land in prime area are keeping increase. Photograph: Sreng Mengsrun/Phnom Penh Post
The areas where land prices in Phnom Penh have increased most sharply over the past six months are the districts of Daun Penh and 7Makara, according to a report from Asia Real Estate Cambodia.

The data shows that the price of land in Daun Penh district and 7Makara during the first six months of this year rose 19.7 per cent compared with the corresponding period in 2011.

And the price of land in Chamkarmorn district – an area in some demand – increased only 5.3 per cent, while Tuol Kork rose 12.7 per cent.

Keuk Narin, vice-president of Asia Real Estate Cambodia, said the price growth had begun in 2011 as the world economic crisis started to fade.

“The economic sector started getting on better while the banking sector reduced loan interest rates, pushing real estate gradually upwards with those buying property having specific targets,” he said.

The report revealed that land in Daun Penh district for business in the first six months of the year saw an average price of US$ 3,365 per square metre, with residential at $2,042 per square metre, compared to the same period last year, when business areas averaged $2,832 per square metre and residential areas only $1,692.

7Makara district’s business areas in the first quarter averaged $3,000 per square metre, and with residential at $1,681 compared to the corresponding period last year, when business land cost $2,597 and residential $1,357.

In Chamkarmorn, business areas in the first quarter was at $2,685 and residential $1,362 In Tuol Kork, areas for business in the first quarter of the year averaged $2,140 with residential areas at $948 for same period last year the figures were $1,827 and $874 respectively .

Keuk Narin said the real estate market by the end of the year was not expected to increase more than last year - it may be at only 6 per cent.

He said real-estate investors had more knowledge about changing from residential property to business.

Previously, they had invested in villas only, but now they had begun investing in apartments rather than selling or renting them.

“One villa is rented from $3,000 to $4,000 a month, but if you build an apartment, not in the same area, and the land size is the same, you can earn from $40,000 to $50,000 a month,” Narin said. He added that demand for apartments has increased more than the available supply, from 5 per cent to 10 per cent.

Sung Bonna, president of Bonna Realty Group and chairman of the Cambodia Valuers and Estate Agents Association, said that in Phnom Penh, the real purchase price for the first quarter had increased 10 per cent compared with the equivalent period last year.

He said land in Daun Penh district was filled with investment in buildings, but the district had some good locations.

“Daun Penh and Chamkarmon are good for a similar potential investment; actually, Boeng Keng Kang I residential area is in demand more than other areas in Phnom Penh,” he said.

He added that land in Chamkarmon district had a 50 per cent potential, with Daun Penh at 70 per cent, while 7Makara is a multi-market area, but trading was limited.

http://www.phnompenhpost.com/index....-7makara-see-sharpest-increases-in-value.html

Cambodia's islands up for grabs
Friday, 17 August 2012 May Titthara and David Boyle



A view from the pristine beaches on Koh Rong island, off Sihanoukville. The island is one of 28 in Cambodia earmarked for development. Photograph: Will Baxter/Phnom Penh Post
More than 180,000 hectares on 28 of Cambodia’s 64 islands were reclassified as state private property for 31 companies seeking land concessions between 2008 and 2010, government sub-decrees reveal.

The reclassification sub-decrees, compiled by investigators at the rights group Adhoc, pave the way for firms to secure 99-year leases to develop hotels, resorts and casinos, mostly on islands dotted across the coasts of Preah Sihanouk, Kampot, Kep and Koh Kong province.

They include already popular destinations off Preah Sihanouk and Kep province such as Koh Tonsay (Rabbit Island), Koh Russey (Bamboo Island), Koh Rong, Koh Rong Somleom and Koh Takhieo, as well as far more obscure enclaves.

Experts in the investment and conservation communities have told the Post that on top of these land reclassifications, many of which have since gained final approval, plots have been earmarked for development by private firms on almost every single island in the Kingdom.

Adhoc senior investigator Chan Soveth said although this was good for a small number of individuals in the business community and rich foreign tourists, there were few island areas left for average Cambodians to enjoy their own country’s serene getaways.

“For example, can residents travel along Sokha beach?” he said, using the private, 1.5-kilometre shore at Sihanoukville reserved exclusively for hotel guests as an example of how the Kingdom’s islands could soon become off limits to most Cambodians.

Soveth said there was a lack of vision and co-ordination from the government as it hastily divvied up Cambodia’s islands, reclassifying land for 99-year leases without assessing negative effects such as the depletion of forest resources that supported communities.

“We are concerned about development without transparency, and we don’t know what exists on those islands,” he said.

Seven of the sub-decrees reclassify land to firms that are not named, while two are simply referred to as “Chinese company”, a not uncommon practice in documents related to land concessions in Cambodia.

Some of the most audacious Cambodian island developments have been connected to shady individuals, including convicted pedophile Alexander Trofimov, who allegedly drove to his resort on Koh Pos from prison regularly before he was pardoned by the king last year.

Adhoc’s list of soon-to-be concessionaires includes a veritable who’s who of controversial development including LYP Group (Koh Kong Knong), TTY Corporation Co, Ltd (Koh Koan) and Try Pheap Company (Koh Tonsay), all firms that have been involved in major land disputes.

But Tourism Minister Thong Kong yesterday defended the aggressive island development plan, which was guided by the Cambodian Development Council, saying it would lead to jobs and prosperity for the local populations.

“If it affected villagers, for what would we be doing it? We have to make villagers get profit from those development projects,” he said.

Tobe Eastoe, protection adviser at Fauna and Flora International, said many companies had not even broken ground yet on their concessions, while some were developing on islands where 60 to 70 per cent of villagers depended on fishing for their primary income.

“Different types of development pose different threats to the marine environment. Some, such as those we have worked with, are interested in preserving natural beauty, as it is their primary tourist attraction,” Eastoe said. “Some are more interested in large-scale development.”

David George, Cambodia country manager at property investment firm CBRE, which has partnered with two of the biggest island development projects in Cambodia, said most firms developing Cambodia’s islands recognised it was in their own interest to do so responsibly.

“If you allow poor development on your island, it will affect the quality of your whole island,” George said.

He added that as Cambodia pushed to catch up with established markets in Thailand and Vietnam, it had the advantage of being able to learn from mistakes made in those countries.

“In a country where you have a relatively small number of people who have quite a lot of land, they have quite a lot of power [as to] how it’s developed,” George said.

With about 20 per cent year-on-year increases in tourist arrivals and the expected commencement of flights from Vietnam to Sihanoukville next year driving investment, Cambodia’s long-dormant island tourism industry had become nascent, he said.

As greater numbers of well-heeled tourists sojourned out to luxury island resorts, increasing trickle-down revenues would ensure that smaller-scale, locally owned onshore businesses benefited, George said.

But George and Thong agreed that a number of concessionaires who continued to idly sit on their leases – a strategy usually used to profit off land appreciation rather than follow agreed-upon development plans – remained a snag holding back tourist dollars from Cambodia’s beaches.

http://www.phnompenhpost.com/index....onal-news/cambodias-islands-up-for-grabs.html

Cambodia sees shortage of builders
Thursday, 13 September 2012 Seun Son



Cambodian labourers working in a construction site in Phnom Penh. Photograph: Hong Menea/Phnom Penh Post
The increasing level of investments in new buildings in Cambodia is causing a shortage of trained building workers, according to the government and to major investors.

Vice director of the Building Department and deputy chairman of the Cambodian Architects Committee Lao Tepseiha said the extent of building investment in Cambodia is increasing this year, but is coming up against the shortage of workers.

“The owners of both small and big building projects, which need 200 to 300 workers, are complaining about the shortage of building workers”, he said, adding that there is demand for more than 18,000 or 20,000 workers per day. The lack of expert workers is especially notable.

He continue “the concept of using emigrants is not good because it could involve many risks: we would rather work with locals, so that if we have numerous building jobs they will gain skills, experience and money.”

The average income for unskilled workers is between 15,000 riel to 20,000 riel per day.

Cambodia Building Worker Confederation (CBWC) president Sovandeth said that the demand for building workers really showed a shortage, while the number of building projects was growing. “Building worker growth increased 70 per cent in 2012 and the lack of workers is some 50 per cent right now,” he added.

He went on: “there is a shortage of workers due to the low pay, causing some Khmer to go back home in the rainy season.”

Khmer immigrant workers went to Thailand, Malaysia, Korea and Japan a few years ago, but now demand has decreased after the government increased the rules and regulations governing their movement, he said.

He confirmed “if there is low payment for a building job now, there will be a lack of workers, but if there are suitable benefits and a safe job, there will be no shortage. You need to pay less skilled workers on average $5, while skilled workers should get $10 per day”.

Assistant to the chairman of House Building Investment Co, Nget Piseth said “Our company lacks less skilled workers because of procedures to provide a place for workers to stay who work in our company”.

Ky Real Estate Company CEO Soun Seap said “it is unlikely there is a lack of workers within each housing project. When they start working they usually have enough workers but by I know there can be lack of workers for those projects with small budgets,” he said.

“Cambodia does not lack many workers now, but I think we will lack skilled labour when we integrate in ASEAN in 2015,” he added.

http://www.phnompenhpost.com/index.php/Real-Estate/cambodia-sees-shortage-of-builders.html