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Real estate booming in center of Phnom Penh

Real estate booming in center of Phnom Penh

The price of real estate in central Phnom Penh skyrocketed in 2006 and will continue

to climb for several years, real estate agents and local officials say.

An increase in demand is driving the trend, and the trendy riverside district has

been the most affected, the Post was told.

Sung Bonna, director of Bonna Realty Company, said this year the price of a four

or five-story building along Sisowath Quay averages between $300,000 and $400,000.

For the ground floor, the price is $120,000 to $180,000 and upper floors are being

marketed between $50,000 and $70,000.

"It's going to increase from year to year because it is a significant place

with a river view and has lots of tourists," Bonna said. "It's different

from a normal place. It is the same as other countries: the price of buildings along

the riverfront always increase from year to year."

One house owner, who asked not to be named, said his relatives asked him to sell

a 4.8m-by-10m first floor flat along the riverfront near Psar Kandal for $60,000.

The same relatives bought it for $20,000 two years ago.

Kong Rith, chief of Sangkat Psar Kandal 1 in Daun Penh district, said the price of

real estate in the commune had rocketed in recent years. He ascribes the boom to

business opportunities, demand and foreign investment.

According to Rith, two years ago the price of a building was about $150,000. Last

year it was more than $200,000, and early this year it is more than $300,000. Buildings

just built along the river are now worth significantly more than $300,000, he said.

Rith's commune contains more than 70 buildings along Sisowath Quay.

He said the ground floors of most of the buildings are rented for restaurants, clothing

shops, internet cafes and other businesses. About 70 percent of the restaurants along

the riverfront are owned by foreigners, but the majority of clothes or Internet shops

are Cambodian-owned.

The cost of renting depends on the place and the kind of business that can be operated

- a clothing shop or Internet will cost $500 to $600 per month; other businesses

are $1,000 to $3,000. A flat on an upper floor will cost from $200 to $400 a month,

Rith said.

Chack Puthsophea, 25, who runs a ground-floor clothing and shoe shop, said she pays

$400 a month in rent.

Puthsophea said she has sold clothes and shoes along Sisowath Quay for eight years.

She said her rent had not increased because her house owner is very kind, but other

house owners would raise the price when they saw that their tenants were doing good

business.

Bunna said there were two areas in central Phnom Penh where building prices were

escalating even faster than on the river front: along Monivong Boulevard and around

Psar Thmei a building would sell for between $350,000 and $450,000 because this was

the main commercial district..

The price of buildings keeps going higher because they are in a place of high demand,

he said.

Across the Tonle Sap in Chruoy Changvar prices are also rising. Nan Keang, architect

for the Happiness City Company, said his company is putting up 618 buildings there,

with prices ranging from $58,000 to $250,000.

However the price of a building in Chruoy Changvar is lower than in central Phnom

Penh, which is the main commercial area and also has a lot of foreigners, Keang said.

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