Phnom Penh’s condominium market is only just beginning to develop, with early movers scooping up prime locations. The De Castle Royal development in the city center, which will come online in the second quarter of next year, will change Phnom Penh’s skyline, and likely pave the way for expansion in luxury residential offerings to come.
The construction of De Castle Royal is currently finishing up on Street 288. When completed, the 32-storey building will have 414 residential units ranging in size from one to three bedrooms as well as parking for up to 474 cars in its six-storey garage.
Ann Sothida, associate director of the Cambodian office of CB Richard Ellis (CBRE), which took over as property manager of De Castle Royal in September, said that the development’s location in Boeung Keng Kang I, commonly known as BKK1, was a big advantage.
“De Castle Royal’s location in BKK1 makes it appealing to both wealthy locals and expatriates,” Sothida said. “The project’s unique selling point is that it is the first condominium in Cambodia to provide individual owners with a strata hard title.”
CBRE Cambodia property manager Simon Griffiths said that De Castle Royal will take luxury residences in Phnom Penh to a new level.
“De Castle Royal is on a much grander scale than other developments,” Griffiths said. “It’s unique not just in terms of the quality of services but also in the materials used, the workmanship and the design.”
CBRE’s property management duties at the moment involve what Griffiths describes as “preconsulting”, in which CBRE begins involvement in a property nine months before it is scheduled to open, ensuring optimal space usage as well as coordinating and streamlining services and systems.
“It’s quite an efficient way of doing property management,” he said.
De Castle Royal is being constructed by South Korea-invested Nuri D&C, which is also handling sales. Nuri D&C sales manager Lach Linda said that of the 85 percent of apartments that had been sold, roughly half had been sold to Cambodians and the other half to foreigners including East and Southeast Asians as well as French buyers.
Linda said the development was ideal for investment as it was one of the best locations for a project of this kind in Phnom Penh and there was an undersupply of high-end residential space in the city center.
“Investors will be able to buy cheap and rent high,” she said, adding that each unit sold comes with a non-fixed parking space. Nuri D&C research estimates a 21 per cent annual return on a one-bedroom unit purchased for $143,110 with 30 per cent cash down and the remainder with a loan with 10 per cent interest, if rented for $1,600 per year.
The brisk condominium sales of recent months and the involvement of CBRE cap a major turnaround for the De Castle Royal project, construction of which stalled in the wake of the 2008 global financial crisis.
De Castle Royal’s fortunes changed this year when Canadia Bank injected $28 million into the project, enabling it to move toward completion. Lach said the financial support was crucial in assuaging investor concerns.
“The customers have confidence in our project again,” she said.