Urbanisation and increasing disposable income for the wealthiest 10 per cent of Phnom Penh’s population are among the most obvious findings from Cambodia Socio-Economic Survey 2014 (CSES) published by the National Institute of Statistics (NIS) earlier this month.
In coordination with the Swedish International Development Cooperation Agency (Sida), the report surveyed 12,000 Cambodian households. An interpretation of the data shows that the wealth of the urban middle- and upper-class has risen sharply from 2012 to 2014.
In 2012, the wealthiest 20 per cent of Phnom Penh’s inhabitants had a monthly disposable income per capita averaging $248. Until 2014, the average had risen to $413 – marking a 66 per cent increase in spending power inside this population.
Foreign property developers, such as Meridian International Holding (MIH) from Hong Kong, have long identified Cambodia as a key market with promising growth and a dynamic, young population seeking a higher standard of living.
MIH has been operating in Cambodia since 2010 and has already launched a project called Casa Meridian in May 2014. It is expected to be completed in 2017. Last Monday, the company officially launched their second project, Skylar Meridian, a high-end condominium development.
In this context, the construction and property sector is emerging as a new engine of growth, representing 2 per cent out of the 7.1 growth in GDP in 2014 according to the World Bank.
While experts warned that such high growth rates in the construction sector might not be sustainable, figures from the CSES survey suggest that the demand for new housing in the capital will continue to be a highly sought after commodity.
In 2009, there were only around 251,000 households in Phnom Penh. Today, the city is now home to around 369,000 households, according to the survey, showing an average annual growth rate of 8 per cent over the last five years. The urbanization of Cambodia is a trend that is not expected to stop.
MIH’s CEO Ko Sek Yan, a Hong Kong developer with decade-long career in the property market, views this trend optimistically – and doesn’t only base his assessments on numbers but on vision and experience.
“The construction and property sector in Cambodia is at a growing phase, reminding me of the golden period that Hong Kong experienced in the 80’s, when I started my career,” Ko said, added that “taking MIH to Cambodia was a way to bring a strong and successful expertise of the construction and property sector as well as a long-term vision for the Cambodian market.”
Ideally located at the heart of Phnom Penh’s diplomatic quarter, Skylar Meridian is a 27,429 square metre project with 280 units. It represents the next generation of high-end condominiums in Cambodia and a unique way of living in an area that has been a natural centre of the city for decades.
While there is no denying that renting or buying property in the capital has become more expensive en lieu of economic and population growth, it is remarkable that the average living space per square that households occupy has remained stable, according to the NIS survey. The survey also showed that households in Phnom Penh dwell in spaces significantly larger than in the rest of the country.
Phnom Penh households had an average size of 60.7 square metre, while cities like Battambang and Sihanoukville measured at 51.2 square metres. For those still living in the countryside, households averaged 43.5 square metres. The average Cambodian household is 46.3 square metres in size, making it 14.4 square metre smaller than that of Phnom Penh.
“We’ve taken notice of some important trends in the market. In addition to increased urbanization and rapid income growth, wealthy Cambodians are more accepting of new living concepts,” said Ko, explaining that this is especially true for people who have returned from working or studying abroad.
“They are very open to living in their own flats with some separation from the larger family unit, but with the flexibility to combine units or be in adjacent units to extended family in modern condos - you get a blend of modern independent living and more traditional extended family living arrangements,” he added.
The anticipated future trend for well planned quality housing in an increasingly urban Phnom Penh is reflected in the Skylar Meridian
From studios to 1 and 2 bedroom units, Skylar Meridian offers high-end amenities, creating a warm, cozy and comfortable environment to its owners.
“Our aim is to create an offer that people will love to call home,”stated Ko. The construction started earlier this month with a target completion date of May 2018.
“We strive to develop products with good value, delivering quality properties with sophisticated design at prime locations,” said Ko. “And that is what Skylar Meridian is all about”.