Teho International, developer of the $500 million “The Bay” real estate project in Phnom Penh, reported $5.3 million in losses for the year ending June 2015, in part due to marketing and promotional activities relating to the Cambodian project.
In an annual filing to the Singapore Exchange last week, the company said that while its property development segment grew 18.6 per cent to $4.25 million in revenues, its Cambodian foray was yet to register revenues.
“No revenue is recognised as this is in accordance with revenue recognition principles in the financial reporting standards.
The financial reporting standards require the construction to have commenced before any revenue can be recognised,” a company spokesperson said in an email.
The spokesman said that 100 condominiums had been sold during the soft launch.
The first phase of the project will include construction of a 45-storey luxury hotel named the Okura Prestige Phnom Penh and a 53-storey apartment building.
The second and third phase will see five 55-storey apartment buildings, including shopping malls and other entertainment venues.
The company, which launched the project in February of this year, has so far spent $1.9 million on advertising and promotional activities, as well as around $600,000 in legal and professional expenses on The Bay.
“These marketing and promotional activities played an essential role in ensuring the success of the project.
This can be evidenced through the success of the soft launch events, where over 100 condominium units were sold,” the spokesperson added.
According to a note in the report, the Singapore developer, whose Cambodian subsidiary is a 49 per cent partner with the Sok Bun Group, reported that the land for the development was worth $15.3 million and is located in the capital’s Chroy Changvar peninsula.
Sung Bonna, director of Bonna Reality Group, said he had no comment on the sales at The Bay, but that developers used different strategies to selling their units and there was no fixed standard or practice adopted by the sector here.
“It depends on who they are. Some do pre-sales and some will just open to public to know [about the project],” Bonna said.
Apart from property development, which is a recent addition to its portfolio, Teho International also deals in offshore oil and gas, and marine engineering.