REGIONAL property investor JSM Indochina has said it was struggling to sell its Cambodian properties, describing the Kingdom’s real estate market as “challenging” and buyers’ interest as “less robust than hoped”.
JSM warned shareholders of disappointing results from the realisation of its Cambodian portfolio in a trading update to the London AIM stock exchange late Friday, citing feedback from its appointed sales manager CB Richard Ellis.
“CBRE has now advised the company that their expected response from potential foreign buyers has been less robust than hoped, due ... to the softness in markets and investment worldwide and a continued hesitancy to invest in the Cambodian real estate market,” the statement said.
JSM appointed CBRE in September to sell the fund’s nine properties – five in Cambodia and four in Vietnam – after shareholders voted in April to realise the entire portfolio.
The firm released last Friday’s statement less than a fortnight after announcing the $12.3 million sale of a Vietnam property – also overseen by CBRE.
“The Cambodian real estate market in particular continues to be challenging ... characterised by limited transparency, a limited number of comparable transactions and generally decreased transaction volumes as a result of the economic downturn,” it said.
It repeated a warning mentioned in its interim results last month that “any realisations in Cambodia are likely to be adversely affected by the weak market”.
But CBRE country manager for Cambodia, Daniel Parkes, said yesterday CBRE had not seen JSM’s statement prior to its release, and downplayed the warnings.
“As only two sites in Phnom Penh have just started marketing, we feel it is too early to predict the prices that will be achieved,” he said in an email.
“It is correct that local interest to date is far greater than foreign, but several foreign property investors and developers have already flown in specifically to view these sites.”
He said after two years of consolidation, CBRE expected prices to rise in 2011 “linked to better than predicted economic performance”.
JSM’s statement was released after markets had closed for the week.
Its Friday closing price was US$0.34 – a 17 percent increase on its price since the Vietnam property sale announcement on October 11, but 50 percent below its share price a year ago.