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Apartments and condos battle for potential customers

There are many high-rise buildings under construction as condominiums and apartments flood the market.
There are many high-rise buildings under construction as condominiums and apartments flood the market. Heng Chivoan

Apartments and condos battle for potential customers

As the market for housing in Phnom Penh continues to expand, condominium developers are now looking to get into the game, offering to rent their units instead of selling them.

An Socheata, director of CBRE Cambodia, said rental apartments and condominiums are very different, as rental properties are owned by one person or company and are loaned out to prospective renters. Condominiums are owned collectively as a joint property and each unit can be owned outright by a different person.

Apartments usually rent for about $18 per square metre, while condominiums go for about $15 per square metre. Socheata said condominiums cost less because they are usually smaller than rentals and rental apartment complexes tend to have better management systems.

“Occupation rates for apartments are still looking good, with 81 percent, while condos are also upping their supply,” he said.

According to a study conducted by CBRE Cambodia at the end of the third trimester, 21 apartment projects and 1,200 housing units are slated to go onto the market, with a total of 7,700 units available for renters. There will be about 1,900 new condominium units pouring into the market, creating a total of 6,109 units on offer.

The General Manager of Century 21 Cambodia, Grace Rachny Fong, said rental and condominium units are generally seen as equal in terms of quality, but rental apartments tend to have better services and can generate more monthly revenue if they are in a good location and are attractive to customers. Condominiums, she said, are better for customers who have more options available to them and can be convenient in terms of payment plans.

“Nevertheless, condos and apartments are each other’s fierce competitors, with many condo investors turning a profit by converting their condos into apartments, in which they can receive monthly revenue,” she said. “If investors are interested in buying condos in order to rent them, they should consider locations such as Sangkat Tonle Bassac, Beoung Keng Kang 1, Beoung Keng Kang 3 and Tuol Tompoung.”

Other regional analysts touted rental apartments as a better investment. Michael Nhim, head of the investment group SIDO, said rental apartment investors can hoard revenue quickly because they allow for a steady, monthly flow of income.

“I encourage all investors to develop apartments because the future prospects of the market itself looks bright due to the Asean integration and an influx of new international firms resulting in increasing apartment demands,” he said.

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