Logo of Phnom Penh Post newspaper Phnom Penh Post - Condo situation draws contrasting assessments



Condo situation draws contrasting assessments

The D.I Riviera condo development on Koh Pich (Diamond Island) was flying low on the radar for some time, but is now picking up pace. Post Staff
The D.I Riviera condo development on Koh Pich (Diamond Island) was flying low on the radar for some time, but is now picking up pace. Post Staff

Condo situation draws contrasting assessments

Opinions on the state of Phnom Penh’s once-booming condominium market remain mixed, with some real estate figures conceding that conditions remain challenging while others seem more than happy to turn a blind eye to oversupply concerns.

Overseas Cambodia Investment Corporation (OCIC) project manager Touch Samnang admitted to Post Property there had been some market concerns regarding the overflow of condominium supply slated for 2017 and 2018.

However, he believes that the condo market is seeing a positive end to a somewhat tumultuous 2016. According to Samnang, there had been a rise in the flow of condo purchases recently in addition to additional Chinese companies committing to investment in Cambodia.

“The condominium supply in the market is no longer an obstacle because in the current market arise many Chinese investors coming to purchase condominiums, with other investors hailing [from] Shanghai, Hong Kong, and Taiwan,” he said.

Samnang added, “Currently, many projects have been successfully sold, as evident with the D.I Riviera project [on Koh Pich Island]. The construction has picked up the pace again [this year] very rapidly.”

Meanwhile, Thida Ann, deputy director of CBRE Cambodia, said condo sales are dependent on a variety of factors.

“Condominium sales will continue to be successful if the location is good,” she said.

“There are still plenty of opportunities if the investors have enough money to invest, in accordance with the market.”

She further stated that the condo situation becomes problematic when market conditions turn unfavourable and investors halt projects, as demonstrated by The Bay – managed by TEHO International – earlier in August.

Unfavourable market conditions were blamed for TEHO International’s decision to halt development of the upscale condo project, a $500 million mixed-use real estate project on the capital’s Chroy Changvar peninsula. The company cited Phnom Penh’s imminent glut of supply in condominium units as the reason behind the suspension of the project’s residential towers.

On a less downbeat note, Phnom Penh’s condo industry has its success stories.

Sear Rithy, CEO of WorldBridge Group, which is investing in The Bridge and The Peak condo developments with joint venture (JV) partner Oxley Holdings, said sales of the JV’s residential developments remained strong.

“Even though some projects are facing some challenges, my projects are still receiving successful sales rates and are going according to plan,” he said.

Alexander Evengroen, CEO of Key Real Estate, said condo sales were slowing down but believed a lot of the market jitters were its own doing.

“Don’t get me wrong, there are a lot of condos being built at the moment and some of them are slowing down regarding the building itself and the sales are going slow as well,” he said.

“I’ve said this before, if you are negative to the market, people will respond to that,” he emphasised.

“Of course people are getting scared; the market itself is reacting to it by sitting on their money.”

Despite some short-term micro and macroeconomic challenges relating to condo oversupply and the upcoming elections, Evengroen remains bullish for the long-term potential of the condo market due to the fact Cambodia has a large number of young people whom he believes will increasingly turn to condos as a viable housing option.

“More than 70 percent of all Cambodians are under 34 years old and that means in the near future a lot of people will start a family,” he added.

“And what do people need? A house.”

Century 21 Mekong CEO Chrek Soknim stated that the current situation for the condo market was still not very favourable, with some developments progressing slowly.

“A number of condominium investors are facing difficulties because they spent a lot of money to buy the land and to construct the building, but they haven’t received money in return,” he said.

Soknim believed that other issues, such as reluctance from the banks in supporting condos and the lack of knowledge regarding the benefits of condo living, were preventing the industry from truly flourishing without stop-start and suspension issues.

MOST VIEWED

  • Phnom Penh placed in two-week lockdown

    The government has decided to place Phnom Penh in lockdown for two weeks, effective April 14 midnight through April 28, as Cambodia continues to grapple with the ongoing community outbreak of Covid-19, which has seen no sign of subsiding. According to a directive signed by Prime Minister

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Hun Sen: Stay where you are, or else

    Prime Minister Hun Sen warned that the two-week lockdown of Phnom Penh and adjacent Kandal provincial town Takmao could be extended if people are not cooperative by staying home. “Now let me make this clear: stay in your home, village, and district and remain where

  • Businesses in capital told to get travel permit amid lockdown through One Window Service

    The Phnom Penh Municipal Administration has issued guidelines on how to get travel permission for priority groups during the lockdown of Phnom Penh, directing private institutions to apply through the municipality's One Window Service and limit their staff to a mere two per cent. In

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Ministry names types of business permitted amid lockdown

    The Ministry of Labour and Vocational Training singled out 11 types of business that are permitted to operate during the lockdown of Phnom Penh and Takmao town, which run through April 28. Those include (1) food-processing enterprises and slaughterhouses; (2) providers of public services such as firefighting, utility and