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Knight Frank Approved for SECC Valuations
Knight Frank Approved for SECC Valuations
June 6, 2022, 5:06 p.m.
Realestate News
Knight Frank Becomes the Latest Real Estate Company to be Approved as a Panel Valuer for the Securities and Exchange Commission of Cambodia: As part of the listing process, a company is required to have its real estate assets valued to determine its Net Asset Value (NAV). Established in 1896 and opening their Cambodian office in 2008, Knight Frank, which is the worldโ€™s largest privately owned real estate consultancy, has become the latest real estate company to be approved as a panel valuer for the Securities and Exchange Commission of Cambodia. With over 440 offices in 58 countries, all valuations undertaken by Knight Frank are carried out by professionally qualified valuers, and all valuation reports comply with the highest of standards set out by the International Valuation Standards Council (IVSC), giving investors total confidence in the value of a companyโ€™s real estate assets. Check out Knight Frank's listings on Realestate.com.kh here. The recent announcement that Hong Kong-based developer, Eastland Development (HK) Ltd, has expressed interest in listing on Cambodiaโ€™s stock exchange follows a number of similar announcements by companies that are also looking to list on the exchange, including the Phnom Penh Special Economic Zone (PPSEZ), TY Fashion and Sihanoukville Autonomous Port. Check out Eastland's property for sale here. If the companies indicated above list on the Cambodia Securities Exchange (CSX) as intended, real estate companies will represent one half of the listed companies (based on number of companies and not market capitalisation) on the CSX. Although activity on the CSX was initially slow, with the Phnom Penh Water Supply Authority listing in 2012 and Taiwanese-owned Grand Twins International (Cambodia) Plc listing mid-2014, the recent activity indicates growing confidence in the Cambodian economy and finance industry as a whole, which is a positive sign for Cambodiaโ€™s real estate and construction industry. The announcement by Eastland Development (HK) Ltd signifies their commitment to Cambodia over the long term and also their confidence in the Cambodian real estate sector. Furthermore, it also enables 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.
Eastland Development announces plans for IPO 2016
Eastland Development announces plans for IPO 2016
June 6, 2022, 5:04 p.m.
Realestate News
Hong Kong-based developer Eastland Development (HK) Ltd has announced plans to listย on Cambodiaโ€™s stock exchange within a year. Sam Yang, the companyโ€™s CEO, said during a recent company promotional event that Eastland is working with a local underwriter to prepare to float shares on the Cambodian Stock Exchange (CSX). โ€œThe application will be ready early next year and the company will have an initial public offering in September next year,โ€ he said, adding that Eastland intends to be the first foreign-registered company to list on the CSX. Yang said that the purpose of listing was not just about raising funds for its projects, but also to raise the confidence of its investors and allow them to be part of a high-standard property firm. Read a related article: Knight Frank authorized to conduct IPO valuations.ย  Eastland Development (HK) Ltd is a branch of Chinaโ€™s Guangzhou Yuetai Group, a real estate developer with over $1.2 billion in assets. Eastland is focused on real estate development in Cambodia, and claims to have invested $60 million in three projects here: East One Apartments, East View Residence and East Commercial Center (ECC). Phnom Penh Securities, the underwriter for the IPO according to Yang, could not be reached for comment yesterday. Sou Socheat, director-general of the Securities and Exchange Commission of Cambodia (SECC), said he had not received any letter or official documents from the Eastland yet, though he welcomed its intention to join the stock market in Cambodia. He said some foreign-registered companies have submitted letters of interest to list on the CSX, though nothing is official yet. In addition, the SECC is also reviewing the applications of three local companies that intend to list within the next year, namely Phnom Penh Special Economic Zone (PPSEZ), TY Fashion and Sihanoukville Autonomous Port. Sor Chandara, Phnom Penh Post Want to invest with Eastland? Check out their properties for sale on Realestate.com.kh:ย East One Apartments, East View Residence and East Commercial Center (ECC).
Cambodian Hotel Industry Growing
Cambodian Hotel Industry Growing
June 6, 2022, 5:04 p.m.
Realestate News
A recent study has found that the hotel service quality in Cambodia is improving due to rising competition and the industryโ€™s readiness to compete regionally. A recent report by the Bunna Realty Group shows that as of the third quarter of 2015, there are 317 hotels with 15,000 rooms in Phnom Penh, and 417 hotels with 17,000 rooms in Siem Reap; 133 hotels with 4,000 rooms in Sihanoukville, and 45 hotels with 1,600 rooms in Battambang. The same study also identified that within Siem Reap, Phnom Penh and Sihanoukville, only 892 hotels could be deemed to have at least a two-star ranking. In addition to the breakdown of the sector, the study also looked at hotel occupancy rates. Of the hotels surveyed in Phnom Penh from January to November of this year, occupancy reached 68 per cent; while it was 66 per cent in Siem Reap, 74 per cent in Sihanoukville, and 75 per cent in Battambang. The study also looked at the hotelโ€™s ranking compared to price. Two-star hotels offered rooms ranging from $21 to $60, whereas 3-star hotels cost from $60 to $200 for a room. 5-star hotels saw the greatest range of prices at $150 to $2000 per night, based on the room type, size and amenities included. Hen Socheat, Bunna Realty Group director announced that private online bookings cost more than bookings made through travel agencies. โ€œThe rate of hotel occupancy via online booking is about 71 per cent on average,โ€ he said. He added that the improvement in services seen in the growth of the hospitality sector came from better coordination between the Ministry of Tourism and private sector training programmes. However, the study concluded that during the peak months from December to February every year, hotels reach near full occupancy especially in Siem Reap when bookings rise to 100 per cent. Socheat said that this signifies the need for hotel expansion. However, Ho Vandy, an adviser to the Cambodian Chamber of Commerce, said these statistics are not credible due to the fact that the study was undertaken via an online survey, and did not consult with private hospitality companies that work directly with clients and their partners. Socheat admitted that the statistics in this study could have been skewed. Based on the Ministry of Tourismโ€™s statistics from 2013 to 2014, Vandy explained that in Phnom Penh there were a total of 7,807 rooms across 170 hotels, and 477 guesthouses adding an additional 6,614 rooms. โ€œMeanwhile, in Siem Reap, there were only 175 hotels but they had a total of 11,620 rooms, with an additional 3,927 rooms from 254 guesthouses,โ€ he said. Government data also showed that there were only 54 hotels in Sihanoukville, totalling 2,697 rooms with an additional 2,734 rooms from 187 registered guesthouses. For Battambang, the government study yielded 32 hotels with 1,620 rooms. From this comparison, the number of hotels in Phnom Penh, Siem Reap and Sihanouk province have more than doubled, while those in Battambang province has also seen a notable increase, all within one year. Nevertheless, both statistics show that the hotel industry is growing. Siv Meng, Phnom Penh Post, Post Property.
New Market Dawns as Oknha Tastes Go Oligarch
New Market Dawns as Oknha Tastes Go Oligarch
June 6, 2022, 5:06 p.m.
Realestate News
After defining high-end taste in Russia, China and Thailand, an Italian luxury home-dรฉcor company aims to conquer the villas market of Cambodiaโ€™s rich.Greeted by gold-gilded tables, intricately carved gold-leaf headboards, and polished tiles of marble and ceramics, one would feel as though they had just stepped into a magical place reminiscent of the Winter Palace in St. Petersburg or an oligarchโ€™s lavish home. In actual fact, this place strikes much closer to home. With its palatial and baroque items on display at the launch of their showroom on November 22, Azza Dรฉcor is the first of its kind in Phnom Penh; a luxury home-dรฉcor company specializing in Italian interior design, mainly in the market for furniture and lighting, tiles and bathroom furnishing and kitchen fittings. Every distinctive product has a โ€œMade in Italyโ€ tag, while its exclusive brands boast of names like Versace (Ceramics), Valentino, Bastianelli Home, and Socci, amongst many others. Marco Cipriani, area manager for CIAC Group which supplies furniture to Azza Dรฉcor, explained that, โ€œour first market all over the world [for this style of furniture] is the Russian market, as the Russian people love to buy these types of gold leaf furniture.โ€ However, at $165 per pop for one Versace Ceramic tile-piece or $10,000 for a Versace sink, the question is whether such ornate and lush furniture is prohibitive here in Phnom Penh. โ€œSince our expansion in other Asian countries like China and Thailand, we feel it is time that this kind of furniture comes into the interior market in Cambodia,โ€ Cipriani said. Minea Prach, Azza Dรฉcorโ€™s sales and marketing manager, explained that the Phnom Penh launch was due to the exponential growth in the construction sector and an increasing appetite for luxury goods among a few. โ€œOur main target audience is the high-end niche market of those who own private residences or villas,โ€ Prach said. The influx of foreigners and foreign businesses in Phnom Penh does seem to complement the opening of such a company. Azza Dรฉcor seemingly fits in with the high-end residences, exclusive condominiums and villas that have been springing up over the past few years. Lorenzo Martini, founder of architecture and interior design company Lorenzo Martini Design Studio, offered his insight on the home dรฉcor style that appeals most to Cambodians, as well as how luxury interior dรฉcor companies will fare in the Cambodian market. In reference to what style of interior design piques the localsโ€™ interest, โ€œCambodians with a budget manage to implement what I would say a Neo-Baroque, or Transitional Classic [style],โ€ Martini said. โ€œPeople would call it โ€˜classicalโ€™, but is a classical style with exaggerated curves, patterns and textures, heavy to the sight, which draws on baroque but while sharing its power, it doesnโ€™t share its elegance. Itโ€™s a style that is popular in most developing countries,โ€ he continued. On how high the demand for such a niche market is here, Martini said that it is tempting to affirm a high demand given the number of showrooms showcasing luxury furnishing in Phnom Penh. However, this pertains only to a pocket of very wealthy people who may not have an idea of what defines a real luxury product. Therefore, many end up purchasing overpriced products without much discernment. โ€œIโ€™m happy to see [Azza Dรฉcor] stepping up the game, and will give a run for their money to many other shops currently selling average products at high prices under the pretense it is luxury,โ€ Martini said. There is no such pretense at Azza Dรฉcor, with each product guaranteeing its authenticity of quality and branding. Partly echoing Prachโ€™s words, Martini said, โ€œI donโ€™t see the market as being ready for luxury commercial projects just yet, I think luxury products are almost exclusively employed in high-end private residences.โ€ Azza Dรฉcor currently works closely with luxury housing developer The Bay, managed by the TEHO Group, in supplying materials to them. Having sold a considerable number of products before and during the launch to owners of private villa residences in BKK 1, Borey Orkide, and Borey New World, Azza Dรฉcor looks set to make waves in this small, but powerful, pocket of Phnom Penhโ€™s elite. Hanamariya Halim, Phnom Penh Post, Post Property
Bank Valuation Vs. Agent Valuation
Bank Valuation Vs. Agent Valuation
June 6, 2022, 5:07 p.m.
Realestate News
It can be terribly confusing how valuations can differ depending on who does it, right?ย Your real estate agent will give you one valuation figure and then theย lender-valued estimate (your banks's valuation) arrives looking much different...How does this happen? Which price is right? And how does your bank and agent come to different conclusions?The bank valuation: If your home is or soon toย be mortgaged, your lender/bank will need to value it. This is necessary to give the lender/bank confidence your asset/home offers sufficientย security against the borrowed amount of money if, for anyย reason, you cannot pay your mortgage and the lender must sell the property to reclaim theย debt. Hence,ย a bank valuation will usually be quite conservative, sometimes 10%-20% less than the current selling prices of comparable homes in the same area.The selling agentโ€™sย 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 toย decide who to engage to sell yourย home. Before completingย your valuation, theย agent will typically inspect yourย home and research comparable sales in the local suburb or communeย before producing a report and a sale price estimation.ย 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.Learn more about how valuations are estimatedย at Realestate.com.kh now!Realestate.com.kh, CambodiLooking forย real estate for rent in Cambodiaย orย real estate for sale in Cambodia?
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Make your Home Quieter
Make your Home Quieter
June 6, 2022, 5:06 p.m.
Realestate News
There are lots of easy things you can change in order toย make your home quieter,ย and fetch a higher market price.ย Sam, a local Phnom Penh real estate agent recounts:ย โ€œI recently checked out a villaย home for saleย along the main road out of Phnom Penh, Road number 4. The main road there is very loud and dusty - as you may know. But, asย soon as I walked in the large gate of this 4 bedroom villa for sale,ย I found that the owners had created a peacefulย garden sanctuary behind the thick and tall street fence. Inside this secret garden wasn't loud or dusty - and it was hard to tell the main road was not far away. This owner had very-cleverly created aย quiet home setting able toย offset the propertyโ€™s location shortcomings.โ€The trick is to stopย street and/or neighborhood noise from entering the house. You can do this by adding:ย Botanical gardensWindow glazingWall insulationBlindsTall secure fences:ย a good landscape designer willย use walls, fencing, plants, hedges and other noise cancelling techniques to bring down the noise levels of your home.Generally - using noise-reducing materials when building or renovating is the best wayย to start when trying to cut your home noise down.In the design stage consider havingย bedrooms and living areas away from the noisiest parts of the building.ย What is the value of a quieter home?For some, such as Brian, who lives on central Street 51, Phnom Penh - the noise is offset by his surroundings:"I'm a heavy sleeper, so I can handle the late night music outside my apartment window. For me, it is a welcome trade-off for being able to walk 5 meters outside my home and be immersed in the heart of Phnom Penh City - I personally love the smells, sounds and great food all at my doorstep! And no need to pay for transport."However, according to Realestate.com.kh data, most of the housing market does put a higher value on quiet homes. Having your home on a quiet street can increase its value by thousands of dollars, if you can find the right type of buyer. The value of peace and quiet is highly sought after by many property seekers, and this is known by valuation professionals. Homes on noisy main roads generally lose 10% of their value, as compared to homes in the same area on quiet side-streets.Want more articles similar to this? Check out Realestate.com.kh now!
Hong Kong Hottest Market, says CBRE
Hong Kong Hottest Market, says CBRE
June 6, 2022, 5:05 p.m.
Realestate News
CBRE Residential Global Living Report, released this year by CBRE International, has seen two east Asian real estate markets ranking in the top 5 highest value residential property markets worldwide, as decided by average property prices. The rational given for this Asian boom appears promising for the Cambodian residential property market, given hints to parallel trends occurring on a smaller scale in the Kingdomโ€™s residential real estate market currently. The CBRE Global Living Report examines the residential property markets of 31 affluent cities around the world, including hubs such as Shanghai, Paris, New York, Tokyo, London and Madrid. Hong Kong ranked number one in the CBRE Global Living Report this year, having the highest average price per square foot in the world. Singapore has the highest property price by capital value in the world, according to the report, however, when viewed on a per square foot basis it came fifth, internationally. In Hong Kong, property prices leaped by 13.5 percent last year alone, meaning the market saw 20 percent average annual price growth, ranking as the second fastest residential growth market worldwide, according to the CBRE Report. Interestingly, the CBRE report cites increased Chinese investment as a key stimulant behind this boom: โ€œAs Hong Kong attracts a substantial amount of Chinese (as well as other international buyers), the market is likely to be buoyed by the recent Chinese stock market crash, which may lead to investors finding alternative homes, such as property, for their capital.โ€ Not surprisingly, therefore, in Hong Kong only 65 percent of all residential properties are owned by owner-occupiers. Cambodia, with the unique invitation of an investment in USD, could also be benefiting from this type of investor. Anthony Galliano, Group CEO, Cambodian Investment Management, believes that, โ€œCambodia โ€˜s real estate market had been historically ignored as the country wasnโ€™t viewed as a โ€œquality of lifeโ€ or โ€œproperty investmentโ€ destination by foreign investors.ย  With Hong Kong and Singapore being Asiaโ€™s 2 most expensive markets and also in the worldโ€™s priciest markets, developers are seeking alternative Asian geographies that are more economically viable.โ€ Knight Frankโ€™s Cambodian country manager Ross Wheble explained to the Post, in regards to similar indicators in Knight Frankโ€™s latest Asia Development Index, that the regional cooling โ€œhas 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).โ€ Galliano suggests that the surge in investment in Cambodiaโ€™s property market has been driven by economic fundamentals, namely, โ€œ a more positive image of the country from frontier to developing market, and to an extent, herd instinct.โ€ Galliano continues that โ€œWhile property prices currently remain attractive, and the country, more specially Phnom Penh, has welcomed developers with open arms, inevitably once you do the math it is blatantly obviously there will be oversupply given the expected developments coming online in the next 2 years.ย  Therefore while it is all rosy today, I expect turbulence in property prices in the medium-term.โ€ The Knight Frank report also added that growth in Cambodia has decelerated in the second quarter of 2015, 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 in Cambodia for the first half of 2015 compared to 2014 โ€œhave eased.โ€
East Commercial Center (ECC) Sales Launch!
East Commercial Center (ECC) Sales Launch!
June 6, 2022, 5:06 p.m.
Realestate News
After the success of the โ€œEast One International Apartmentsโ€ project โ€“ a condo development which is already 70% sold and now under construction in Duan Penh, Eastland Development Co. Ltd. have announcedย the launch of sales forย โ€œEast Commercial Center (ECC)โ€ along Norodom Boulevard, near the Malaysian Embassy. The number one real estate need within Phnom Penh moving into the future is a lack of affordable, sole-purposed office space, believes CEO of Eastland, Mr Sam Yang. "There are a growing number of talented local entrepreneurs and small business owners who need a place for their businesses to take flight, without driving them bankrupt." The East Commercial Center (ECC) will be completed in late 2017 and provide the market with 38 floors of pure office space, divided into small and affordable units, with low management fees, and common areas with all necessary business amenities. Inquire about the East Commercial Center (ECC) on realestate.com.kh todayThe ECC project will include a total of 680 car parks, over 6 floors. And in fact, the following stage of this development will be the East View Residence project, which will include four 38-floor high residential buildings. The second Cambodian condominium project for Eastland Development. The current office space market in Phnom Penh is unsuited to the growing demand, believes Mr Yang. "These types of start-up businesses are not interested in A-grade office space, as rental rates are too high, and instead now find themselves adapting villas or flat houses into office space. Meanwhile, International companies are increasingly interested in moving an office to Cambodia at low risk because investment incentives are some of the best in the region."Inquire about the East Commercial Center (ECC) on realestate.com.kh today
FDI Encouraged by Foreign Property Ownership Allowances
FDI Encouraged by Foreign Property Ownership Allowances
June 6, 2022, 5:05 p.m.
Realestate News
Foreign direct investment (FDI) is luring a new breed of foreigners to Cambodia, and the region more generally. With foreigners comes an increase in demand for property, and different types of property - and a series of new allowances in national property laws to accommodate this demand.Foreign investors come to the South East Asia region for the low labour costs, connectivity between the neighbouring economies, and the huge supply of land, resources and business opportunities. And as local markets grow, FDI will naturally follow as international companies are spurred by the chance of jumping on the wagon of a fast moving economy. Foreign capital presents a huge engine of growth in South East Asian countries such as Cambodia, Vietnam, Myanmar and Laos - which cumulatively saw an average annual rise in FDI of 9.2 percent in the years 2010 to 2013. In this FDI growth, Myanmar was the leader of the pack with a 35.8 percent increase over the three year period. Cambodia followed with 22.3 percent; Laos came third at 15.2 percent; and finally, Vietnam, fell behind with just 2.6 percent growth over the three year survey. Yet, amid the Cambodia, Laos, Myanmar and Vietnam bloc, foreigners are subject to a variety of ownership limits. The foremost of these is being barred from owning land on a freehold basis, otherwise termed as outright ownership in perpetuity. This is a rule which is largely steadfast throughout the four nationsโ€™ borders. This may not be surprising, however, as freehold possession of land is likewise unavailable to citizens of Laos, Myanmar and Vietnam, where government policy holds the state as the principal owner of all land. Long-term leasehold is, therefore, the accepted form of land ownership for foreigners based in these nations. Lease terms are flexible for most purposes, whether it be for a new business property or a residential address, and allow room for ownership limits to potentially ease in the years to come as governments in the region increase efforts to attract quality FDI. Given the relative political stability in the region, investors are generally happy to accept these long term leases. Cambodia, unlike its three neighboring 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. According to the strata title regulation, foreigners cannot acquire a ground-floor unit legally, and any foreign ownership allocation is limited to a maximum of 70 percent 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. In Laos, land is owned by the "national community", meaning no individual or business entity, foreign or local, can truly own land. Land-use rights are only granted to individuals or organizations by the state, and these rights are able to be transferred or inherited. 50 year leases are commonly granted to foreign individuals or companies. Myanmar's constitution similarly 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 10 year extensions. Structures affixed to land are the property of the foreign owner, but these rights revert to the lessor or the state with no prescribed compensation when the lease comes to an end. A Condominium Law, likely inspired by the Cambodian example, that is currently in development in Myanmar but not yet in force, 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 percent foreign ownership of the total units in the property. In Vietnam, freehold ownership by foreigners over land is prohibited by the constitution. Yet state authorized leases 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 percent foreign owned building. The influx of FDI and the relaxations upon ownership laws is pushing local real estate developers to create and sell more residential space suitable for the needs of this new investor class. The massive boom in construction in all of these countries, Cambodiaโ€™s condo explosion being a prime example, reflects this drive to meet a new FDI based market. As rules are eased, companies such as property developers, banks and providers of property-related services, like maintenance, insurance and security, soon flow into the economy and boost it from within. In evidence of this, the GDPsโ€™ of Cambodia and Myanmar each grew 9.7 percent last year; Vietnam's shot up by 8.8 percent; and Laos experienced 5.2 percent GDP growth.
Mortgage Matters Part 2: What's in a Home Loan
Mortgage Matters Part 2: What's in a Home Loan
June 6, 2022, 5:06 p.m.
Realestate News
There are three basic components to anyย mortgage. You must understand these clearly before you start the home loan application process.ย If you missed Mortgage Matters Part 1, read it here!In short, these are the homeย loan amount, interest rate, and loan term:Mortgage Component #1 - The Loan Amount: The loan amount is the principal amount that you want to borrow. Banks in Cambodiaย generally give a loan of up to 70% of the property value. Mortgage Component #2 - 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. Mortgage Component #3 - The Loan Term: The loan term is the duration/length of time that you take to completely repay the loan. Loan generally range from 15 to 30 years in Cambodia. If you combine the principal loan amount and the interest amount,ย you will then knowย the overall loan amount. Mostย home loans are usually repaid via monthly installments.The repayment comprises two parts or portions. One partย is for the repayment of the principal amount. The other partย is for the repayment of the interest.Read Mortgage Matters Part 3 HERE!This information should help you calculate your monthly mortgage payment... These home loan calculators should help too!ย Ready to get a Mortgage??ย Inquire for a home loan here.
Politics and Frontier Property Markets
Politics and Frontier Property Markets
June 6, 2022, 5:05 p.m.
Realestate News
Myanmar's election held on November 8, deemed as the countryโ€™s first free election in 25 years, caught the attention of people around the world as Aung San Suu Kyiโ€™s National League for Democracy won by a landslide.Considering the date from the Directorate of Investment and Company Administration (DICA) indicating the rise in the real estate market in Myanmar from $440 million in 2012 to 2014, to $780.7 million this year, Post Propertyโ€™s Catherine Harry met up with Kevin Goos, CEO of Century 21 Cambodia, to talk about how the changes in the political scene will impact the local and regional property markets.ย How does the Cambodian property market fare compared to the region? Cambodia has the most attractive market for real estate development in Asia right now. Following closely are Japan and Myanmar. Most real estate markets such as Singapore, Hong Kong, and Taiwan have seen a decrease in transaction by as much as 30 per cent; hence, the surge in foreign buyers over the last 24 months who are purchasing condos in Cambodia. Phnom Penh is seen as relatively affordable when compared to other cities in Southeast Asia and Cambodia has a strong economic growth track record with strong GDP growth since 2001. Comparative real estate markets such as Singapore, Taipei, and Hong Kong were booming in the 1980โ€™s and 1990โ€™s. What we are seeing in Phnom Penh is a city that is โ€œcatching upโ€ and we can directly see the success of new developments, most notably North Park Condominium which sold 40 per cent of phase 1 on launch day.What advantages does Cambodia have in terms of laws, regulations and the ability for foreign ownership? Cambodia is good for business. The governmentโ€™s stance on foreign direct investment (FDI) is very attractive when compared to surrounding countries. The drafting of the new development and construction law will create a clear pipeline for big developers to enter the market and the creation of the strata title and condo law in 2009, allowed for a transparent and practically applied way for foreigners to buy condos in Cambodia.Recently, Vietnam has brought in new laws for foreign ownership. While it appears to have had mixed results thus far, could this have an impact on property development in Cambodia? Yes. The new Vietnam laws on foreign ownership are a move in the right direction and I am sure when these laws are practically applied to the local market, more investors will continue to bring new real estate developments into Vietnam. Traditionally, if both Vietnam and Thailand are doing well in real estate, Cambodia also grows. In this case Phnom Penh is very far ahead of Ho Chi Minh City for condo development, housing development, and commercial development. The main positive effect of a prosperous real estate development market in Vietnam, that benefits Cambodia, is the decreased cost in construction materials for new developments in Cambodia.With Myanmarโ€™s recent election, and the hope of a proposed condominium law, how could this change the focus of investors looking at frontier economies? How do you see the election results affecting the real estate market there? Myanmar is an attractive country for both retail and institutional investors, largely due to the growing populations, geographic location, and the positive results of last elections. However, for brands entering the real estate market, like Century 21, we are still very far from considering Myanmar as US sanctions are still in effect and pertain primarily to property. The condo law has been in the works for roughly 24 months and would have a great effect on real estate developments in the country. Once Myanmar finalises the condo law and allows foreigners to own condominiums outright, we will see a huge surge in world class developments begin to emerge in the country, bringing some of the best developers and large amounts of FDI.How important is political stability when it comes to investorsโ€™ decisions? Both retail and institutional investors are smart and base their decision around elections in frontier markets. However, Cambodia has been very consistent in economic growth and political stability for the last 15 years. We are seeing investor confidence at a very high level in Cambodia.After the recent political events in Cambodia, do you think it will have a lasting effect on the real estate market? The real estate market here has not been affected by any recent political events. The only political events that affect real estate transactions in Cambodia over the last 15 years are elections and they are minimal. Usually transactions begin to slow down about six months prior to elections and pick back up again about six months after the election outcome. This has been the recent trend and we expect to see this trend continue. However, as Cambodia enters into the ASEAN community, we expect to see a strong real estate sector in Cambodia well into the 2020โ€™s.Itโ€™s believed that foreign investment in retail in Myanmar is limited because of its regulations that require foreign-brand entries to team up with local partners. Do you see similar problems happening in Cambodia? Foreign brands can enter the Myanmar market as a franchisor without a local partner but are required to have less than 40 per cent control over franchisee operations. American brands are still very hesitant due to the current sanctions that pertain primarily to specially designated individuals (SDIโ€™s) who are considered to be involved in human rights violations. Currently, there are about 85 SDIโ€™s that are restricted from doing business with American brands or American nationals should they involve in more than 50 per cent of the current investment, especially in property.This article was a co-production of Realestate.com.kh and the Phnom Penh Post, Post Property.Stay tuned for more updates from Realestate.com.kh!
Real Estate Courses develop Professional Standards
Real Estate Courses develop Professional Standards
June 6, 2022, 5:05 p.m.
Realestate News
In a profession that has long seen unlicensed real estate agents from tuk tuk drivers to open Facebook groups saturating the profession, local universities and real estate agencies are clamoring to attract and groom the next generation of agents. With fees ranging from $250 to $1000, these classes aim to teach the in and outs of the profession through business courses and lengthy intensive seminars. However, some students find that they need a more thorough education before committing to the profession.In Sitha, vice president and senior valuer of World Trust Estate teaches courses at both the Cambodian Valuers and Estate Agents Association (CVEA) and Western University.At Western Universityโ€™s three-credit 48-hour course, he focuses on basic knowledge of the market and industry trends to provide a general overview. โ€œThe students will have a better understanding of the real estate market in the area; why there are many companies investing on this sector, and why there are many investors investing in this country,โ€ said Sitha. โ€œReal estate is an important subject globally. Thatโ€™s why countries like Malaysia and Singapore teach [these] subjects.โ€ Out of all the lessons that the students can take away, Sitha reminds them time and time again of the importance of ethics to steer agents away from becoming entangled within legal predicaments, something that is rising as often unchecked investor cash flows in from overseas. โ€œThe most crucial duty of a real estate agent is to legitimise developments and investment,โ€ he said, adding that to do so, an agent has to verify if the developer is properly licensed and has obtained permits from the authorities. Another thing he stresses is that agents need to do their homework and investigate a developerโ€™s international and local track record, because โ€œmeasuring a clientโ€™s financial status is a very important thing to be sure of,โ€ something that can be difficult for smaller projects or new entrants into the scene. Meanwhile, at CVEA the classes are geared towards career development and valuation. The students range from company managers, to government officials and bankers who wish to increase their knowledge in a fast growing market. His class is usually full of students, he said. Taught one day a week at a cost of $200 to $250, once completed, students receive CVEA certification. Century 21 Cambodia, an international franchise, is another company offering classes for current and prospective agents. Learning Director, Grace Rachny Fong, said that their best selling and well-known course is โ€œHow to be a professional real estate agentโ€ at $295 for a full day intensive. Other workshops last for three days at a total of 36 hours. Once completed, participants receive certification that is recognised in all 75 countries in which Century 21 operates. Century 21 also offers 16-day, seven course packages to the tune of $990. The majority of the students, Fong said, vary from college graduates, company managers, doctors and dentists, as wells as current investors. Se Penglong, a business major at Western University and one of Sithaโ€™s many students, said that real estate classes have provided an insight into the sector and the terms, conditions and responsibilities involved in a real estate deal; something which he sees as beneficial as the sector grows. โ€œWe can see rapid growth in infrastructure and construction,โ€ he said. โ€œAt the same time, we can also see an increase in foreign and local investment.โ€ Meanwhile, Ry Socheat, also a business major, said that although he has learned a lot, he doesnโ€™t yet have the confidence to delve into the world of real estate. โ€œWhile the course has been valuable, the lessons only cover a small part of a complex sector,โ€ he said. Kong Sovanatey, who is pursuing a degree in hotel management, explained that while she now has a grasp of the fundamentals, when it comes to purchasing or looking for property, she would still prefer to seek out a professional real estate agent. Um Vuthdara, a professor of Economics at Pannasastra University of Cambodia, said that the real estate courses through both universities and agencies are a good start because โ€œwe should have developed these skills many, many years agoโ€. While the construction sector has taken centre stage, becoming one of the major contributors towards GDP growth, he explained that no country can develop โ€œwithout good human capitalโ€. With 13 years of experience as a professor, he said that to support real estate development, โ€œeducation and training needs to also include direct practical work,โ€ noting that while it is up to a university or agency to provide quality programs, a course just provides a general guideline. It is up to the โ€œstudents to practice their work with the private sector and investors,โ€ he said, adding that is when the value of a real estate course really comes into play. Catherine Harry and Moeun Nhean, Phnom Penh Post, Post Property.
Property FDI in times of Turmoil
Property FDI in times of Turmoil
June 6, 2022, 5:05 p.m.
Realestate News
With the recent political upheaval that began with the severe beating of two Cambodia National Rescue Party representatives on October 26, last Fridayโ€™s arrest warrant issued for Sam Rainsy concerning a defamation lawsuit stemming from 2008, the subsequent stripping of his lawmaker status by the National Assembly on Monday โ€“ a vote which was boycotted by opposition lawmakers โ€“ the heated politics between the ruling CPP party and the CNRP has led economists to argue that further political instability will scare away foreign direct investors into the property market much like it did during the last election cycle, providing the situation further deteriorates.Seng Bunna, CEO of Bunna Realty Group, told Post Property that such political turmoil would generally spurn investors temporarily, slowing FDI, as well as delay ongoing projects causing investors to second-guess their decisions while they wait and watch to see how the situation plays out. Cautioning the dependence the Kingdom has on foreign investment, Bunna added that โ€œ[these events] demand vigorous discussion between politicians and they have to specifically address the need for political stability for the economy to develop because Cambodian politics and [the] economy are still not widely apartโ€. Ho Vandy, advisor to the Cambodian Chamber of Commerce, echoed the fact that the potential for Cambodian economic growth was always viewed in the context of relative political stability and that a lack of it could freeze the flow of FDI. Also, Vandy, a former co-chairman of the Private and Public Sector Working Group, said that with rising political tensions, the tourism sector could also be placed at risk. Whenever the political situation heightens, it not only shakes local and foreign investor confidence, but potential tourists take notice, he added. In a deteriorating political environment, Vandy said that investors could face three options: shore up their investment to secure their current assets, maintain their current stance, or retreat. The latter, he explained, could be possible if property investors liquefy their capital by taking mortgages on their property and simply pull out due to increased uncertainty. However, while he sees no sign of this presently occurring, he suspects that tourism, which is a quick barometer of outside confidence, has already been negatively impacted. โ€œWe request politicians to calm the situation because this political turmoil disturbed much income, FDI and overall tourism in Cambodia,โ€ he said, noting that the slowdown in the increase of tourism growth compared to last year โ€“ due to unrelated factors โ€“ needs to be addressed. โ€œCurrently we are conducting a study with many economists from related ministries in order to study these complications,โ€ he said. Ann Thida, vice president of CBRE Cambodia, said that while she has not seen โ€œreactions from anxious investors, what I see is that the investorsโ€™ sentiment is [primarily] affecting the international market perception negatively.โ€ โ€œIn whatever way, I think they worry, but so far I have not received any response concerning this problem,โ€ she added. Srey Chanthy, an independent economic analyst, said that the current state of affairs could take six months to blow over before investor confidence is renewed. In the present context, she explained that investor activities can โ€œstagnateโ€ causing a pause in โ€œprojects and signing of contracts because [investors] are still observing.โ€ Besides political stability, he noted that the most important thing for FDIย is economic growth, macroeconomic stability, โ€œgovernment policy and the rule of lawโ€. Chailin Sear, CEO of Chailin Sear real estate, did not believe that the present situation was of consequence, noting that any appeared slowdown is chalked up to the mix of national holidays and the rainy season, when construction typically slows. โ€œIf we look into the political situation, I do not think it affects investors or projects,โ€ he said, adding the turmoil has not even made it onto foreign investorsโ€™ radar screens. Investment figures from ACLEDA Bank also seem to suggest that at least for now, investment has remained unchanged. In Channy, CEO of ACLEDA, was unfazed by the current rumblings, saying that investors have always operated on the principle of long-term investment strategies. According to the bankโ€™s figures, $2.7 billion is scheduled to come into Cambodia through ACLEDA by the end of this year, of which $2.6 billion had already arrived as of October. Channy tried to underscore the notion that a rather healthy dose of confidence comes from regional stability, saying that, โ€œASEAN is the most peaceful and secure region with the lowest risk for investment, while regions in Europe and the Middle East are having many troubles.โ€ In a time of uncertainty in other global markets, he said this was the time for Cambodia to shore up its stance as a โ€œfavourable investment atmosphere in order to attract more investors.โ€ Siv Meng, Phnom Penh Post, Post Property.
Can I Apply for a Home Loan? Mortgage Q&A
Can I Apply for a Home Loan? Mortgage Q&A
June 6, 2022, 5:00 p.m.
Realestate News
How much can banks lend you through a home loan?ย Banks can Cambodia can lend you up to 70% of the total property value. Much like the rest of the world, the final loan amount will be the bank's discretion based on the applicant's capacity to pay it back.What annual interest rate can I expect from Cambodian banks?Annual interest rates in Cambodia are about 8%.For how long can I borrow from banks in Cambodia?Borrowers can get a loan payment term for up to 20 years.Are there any fees associated with my loan application in Cambodian banks?Yes, the bank may charge around 1% of the loan amount drawn down. Associated fees such as Hard Title Registration, blockage, Property valuation, annual insurance, and legal fees are also borne by the borrower.How do I apply for a loan in a Cambodian bank?Of course, getting in touch with a bank will be the first step in doing so. But then again, choosing the right bank for your home loan is almost as important as the property itself. Realestate.com.kh is partnered with several banks in Cambodia offering great terms for both Khmers and foreign buyersInquire for a home loan in CambodiaWhat are some requirements if I want to apply for a home loan? Different documents will be required for different loan scenarios. However, the basic information requires from you includes:National ID Card and Passport;Sales and Purchase Agreement of the property;ย Income evidence (i.e. salary payslip, employment letter, bank statement, and/or other relevant documents);ย For self-employed applicants, business income verification is also required.ย Can foreigners apply for a home loan in Cambodia?ย  Yes, foreigners in Cambodia can apply for a home loan. Realestate.com.kh has a comprehensive guide on home loans for foreigners based in Cambodia.Guide to home loans for foreigners in Cambodia