Mean Chey Market Review Q1 2017

May 15, 2017, 2:03 p.m.


Market Summary

Driven by the rapid growth of residential and commercial hubs within certain areas of Mean Chey district and spill-over impacts of Boeng Cheung Aek Development Plan, which covers some parts of Mean Chey, Dangkao, and Takhmao, Mean Chey’s property prices saw a slight pick-up. In the first quarter of 2017, prices of landed properties and land parcels across the district grew by 5.6 percent (2017Q1-over-2016Q1), despite negative property market sentiment over the course of last year.

Average land prices in the first quarter of 2017 across the district ranged between US$850 and US$1,200 per sqm. Whereas minimum land price could be as low as US$150 per sqm in the least developed zones, maximum land price (exclusive of buildings or structure) in the bustling commercial hubs could be as high as US$4,470 per sqm.

Mean Chey also saw a big jump in the completion of cluster landed housing units in 2016, having up to 1,500 units finished within the year. Even more, other projected completion of 2,700 housing units will add to the existing figure by the end of 2017. As of today, cumulative supply of landed housing units reaches 9,400 units across the four communes of Mean Chey district.

In term of development trends, Mean Chey has enormous potential for its partial coverage of Boeng Cheung Aek development zone known as ING City, which lies across some parts of Mean Chey, including Dangkao district and Takhmao province. The zone is expected to become a satellite city with a central hub for mixed-use development, while the nearby areas will also see the impacts.

Mean Chey Market Review
Introduction

Subdivided into four communes, Mean Chey district (Khmer: ខណ្ឌមានជ័យ) is situated near south of the central business districts (CBDs) of Phnom Penh, the capital city of Cambodia. With population of about 200,000, Mean Chey is adjacent to some part of Chamkar Mon district and shares borders with other districts such Chbar Ampov, Dangkao, and Pou Senchey (See indicative map 1).

Formerly, Mean Chey’s administration included the current district of Chbar Ampov, but later in 2013, the eastern part of Mean Chey was administratively separated and formed into another district which is currently Chbar Ampov. Today, Mean Chey composes of only four communes, namely Stueng Mean Chey (Khmer: សង្កាត់​ស្ទឹងមានជ័យ), Boeng Tumpun​ (Khmer:  សង្កាត់​បឹង​ទំពុន), Chak Angrae Leu (Khmer:  សង្កាត់ចាក់អង្រែលើ), and Chak Angrae Kraom (Khmer:  សង្កាត់ចាក់អង្រែក្រោម​).​ ​​​

Land Market

Due to many large vacant parcels across the district and ING City’s development plan which partially covers two communes of Chak Angrae Leu and Chak Angrae Kraom, land market in Mean Chey district has drawn interest from speculative buyers and developers alike. This has created a high demand over the areas and thus caused property prices to go up, albeit slightly, amidst the property market slowdown across the capital.

Prices of landed properties and land parcels in Mean Chey district grew 5.6 percent in the first quarter of 2017 as compared to the same period last year. Average land price across the district was US$1,190 per sqm in Q1 2017, though prices could vary greatly dependent on different zones and communes within the district (See figure 1).

In Boeng Tumpun, for example, average market price of land parcels was about US$1,200 per sqm in the first quarter of 2017, although in a peripheral, vacant zone, market price was as low as US$300 per sqm (See figure 1). Industrial estate, exclusive of buildings and structure, could range between this lowest market price and as high as US$1,500 per sqm dependent on how bustling the locations are. Market prices of landed properties, exclusive of buildings and structure, in a residential township or zone ranged between US$740 and US$1,350 per sqm. Shophouses and commercial properties, exclusive of buildings and structure, on a secondary street in a good location had an average market price of US$1,500 per sqm, and on a major prime street the average market price could be as high as US$3,300 per sqm.

Chak Angrae Kraom had a relatively lower market price than any other communes of Mean Chey district, for its prime street shophouse and commercial estate prices for different locations only ranged between US$1,230 and US$2,300 per sqm, which those prices are exclusive of buildings and structure (See figure 1).

Prime Street Pricing

Main and prime streets remain the most attractive target for commercial purposes. The fact contributes to a high demand on properties along those streets, putting them on a higher market value compared to those far off the main streets.

Landed properties as well as land parcels along Samdech Monireth Blvd., also known as St. 217, in Stueng Mean Chey commune had an average market price of US$2,490 per sqm, exclusive of buildings and structure, even though prices could vary greatly due to different determinants such as zoning, property type, or location (See figure 2). A low market price for land parcels along the mentioned street stretching near north started from US$1,450 per sqm, while a high market price on the same street could be as much as US$4,470 per sqm, and those properties could be found nearby, surrounding or adjacent to New Mean Chey Market.

Chamkar Doung Street, also known as St. 217, which interlinks from Samdech Monireth Blvd., has been recently improved and widened, causing market prices to appreciate due to increased demand. The average market price along this street was about US$830 per sqm, whereas the market prices ranged from US$800 to US$1,200 per sqm dependent on location and property type (See figure 2).

Market Performance

Property markets across Mean Chey district were still relatively strong in 2016, albeit weaker market for large parcels of land.

Tracked over a period from Q1 2016 to Q1 2017, only 14 percent of the properties in the form of land parcels and landed properties were reported to be sold, 37 percent unsold, and 49 percent with status unknown. Chak Angrae Leu had the highest sold rate, 25 percent, followed by Stueng Mean Chey, 17 percent (See figure 3).

Chak Angrae Leu’s better sales were thanks to a prominent development trend over some parts of this commune, having drawn interest from speculative investors and buyers into the areas where ING City’s master plan has been mapped. On the other hand, Stueng Mean Chey was able to Chak Angrae Leu’s better sales were thanks to a prominent development trend over some parts of this commune, having drawn interest from speculative investors and buyers into the areas where ING City’s master plan has been mapped. On the other hand, Stueng Mean Chey was able to better perform because it has been a newly developed commercial and residential hub with a higher population density than the other two communes within Mean Chey district.

Market Prices and Trends

Average sale-to-list price ratio (SP-to-LP) 2017Q1 over 2016Q1 in Mean Chey district was 92 percent, meaning that every final closed price went below the original list price by eight percent on average (See figure 4). This ratio indicated a stronger bargaining power among buyers due to a weaker demand compared to the market supply.

Nevertheless, asking price trends still moved upwards during the same period, causing average last-to-initial list price ratio to stand at 105.6 percent, meaning that the market price increased by 5.6 percent y-o-y throughout the four communes. In spite of the slow market absorption and longer marketing time, players speculated that the market would do well in the next couple of years, thus bringing down the prices was not necessary at the moment.

Low-Rise Housing Market

Mean Chey district witnessed a strong growth in low-rise housing market in the last few years, albeit some slowdown in new unit launches in 2016, while it was slated to have no further new launches into 2017. However, the district saw a tremendous number of new constructed houses in 2016, having almost 1,500 units finished. Even more, 2,700 of additional units, especially in Stueng Mean Chey commune, were predicted to be finished by the end of 2017. Total cumulative supply of low-rise housing, including existing and ongoing construction, in Mean Chey was about 9,400 units, updated as of 2016 (See figure 5).

Market Share by Commune

Stueng Mean Chey boasted the majority of low-rise housing  housing clusters, sharing up to 68 percent (or 5,986 units) of the total cumulative supply in Mean Chey district as of end of 2016. The rest shared other 32 percent (or 2,785 units) (See figure 6).

Stueng Mean Chey is a newly developing and major hub for residential, commercial, and industrial activities of Mean Chey district, located Near South of the four central commercial districts. A greater number of housing supplies flowed to the this commune than any other areas thanks to its better improved infrastructure, nearest links to Phnom Penh’s main central parts, and various amenities that ease the livelihoods of residents in the areas.

Market Share by Project

Peng Huoth, one of the few biggest and well-known housing projects in Phnom Penh, shared 14 percent (or 1,375 units) of the cumulative market supply in Mean Chey district as of end of 2016 (See figure 7). The majority of the housing projects in the district were small-scale and unbranded, often with 50 to less than 100 units of terraced houses clustering across the whole district. These projects accounted for 63 percent (or 5,910 units). Other cluster housing projects such as Sony and Sorla accounted for 21 percent (or 1,939 units) as combined.

Market Share by Home Type

In Mean Chey district, purpose-built shophouses accounted for only 1.9 percent (or 176 units) of the total cumulative supply, both finished and ongoing, as of end of 2016. Link-houses, also known as terraced houses, were the most common home type in the district, sharing up to 90.1 percent (or 8,364 units). Semi-detached houses, which are often highly-priced, accounted for 6.8 percent (or 634 units); whereas single-detached houses, which are more expensive than any other types, accounted for only 1.2 percent (or 113 units) (See figure 8).

Linkhouses are popular not only in Mean Chey district but also across all other districts of the capital because of their much lower prices, being affordable by the majority of home buyers.

Semi-detached and single-detached homes, mostly offered by Peng Huoth’s development project, are intended for upper-middle to high-end market segments.

Outlooks and Trends

The notion of urban expansion has been echoed differently across the capital, because each voice follows a developer’s interest, reported B2B Cambodia in August last year. Some said that the urban should expand northwards, while others argued it should go westwards.

However, the most famous local architect Vann Molyvann gave out reasons why the urban should expand to the south. “I think that if the city develops to the south it is better than to the west as the south is an area that is higher above the river, which is key to avoiding floods,” said Molywann, as quoted by B2B Cambodia in August last year.

Whatever the arguments have been made, the urbanized Phnom Penh has already sprawled out to many different directions: north (Sen Sok district), west (Pou Senchey district), east (Chroy Changvar district), not to mention south (Mean Chey district, Dangkao district, and Takhmao city).

many different directions: north (Sen Sok district), west (Pou Senchey district), east (Chroy Changvar district), not to mention south (Mean Chey district, Dangkao district, and Takhmao city).

As of today, the western district of Pou Senchey has attracted most of low-rise residential cluster development projects, having a total of 26,800 housing units, both finished and still underway. Sen Sok is the second largest attractive hub, having 18,400 units currently finished and ongoing across its four communes, especially Phnom Penh Thmey (See indicative map 2). While these are examples of how the capital has expanded, housing clusters and residential compounds tend to move into many directions, creating new hubs and communities to ease traffic pressure in the inner city center and relocate to the affordable periphery. The interlinks between the central urban areas and the outer newly developed areas ensure that people can still access to key parts of the capital.

While there is no exception for Mean Chey district, it has already hosted a total of 9,400 low-rise cluster housing units, the major of which were completed within 2003 and 2016 and others due to completion by the end of 2017.

Ongoing and Future Development

Many outer parts of Mean Chey district have huge potential for urban expansion, with a notable satellite city known as Boeng Cheung Aek Development or ING City underway and expected to take shape within the 2020s. ING City, covering 2,572 hectares of land, including a 520 hectare water reservoir, stretches across the wetland and reservoirs of Boeng Tumun and Boeng Cheung Aek as well as some parts of Chak Angrae Leu and Chak Angrae Kraom (Mean Chey district), as well as some other parts of Dangkao and Cheung Aek (Dangkao district) and Kankal province (See indicative map 3).

A large part of Chak Angrae Leu of Mean Chey district, sandwiching the newly built Hun Sen Boulevard, is designated for low- and mid-rise residential zone. For example, borey Peng Huoth, a gated community housing project and located on Tomnup Thmey Street (or St. 371), has been developed on the edging part of the master plan.

This massive satellite city is a mixed-use development, comprising mainly of residential, commercial, industrial zones along with many other public amenities such as schools, sports complex, bus interchange, and shopping areas, to name a few. Some of the development projects have been already there, namely International School of Phnom Penh (ISPP), an automobile showroom of Mercedes, and the 209-resident-unit Villa Town.

Up to date, a large part of wetland and reservoir has been filled, while key infrastructure such as interlink and ring roads has been built to provide basic access to the development sites as well as to the inner city center. Key infrastructure that has been either built or underway is, for instance, Hun Sen Boulevard, an arterial road running through the planned development areas; and Phlov Hoksib Maetr (or Street 60 Meters), a ring road interlinking with the satellite city, southern parts of Phnom Penh and Takhmao city.

To keep yourself updated with the latest market movements, visit Realestate.com.kh now!
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