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Specific condo types growing in appeal to the middle class

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An example of how the gyms at Residence L condos will look like. PHOTO SUPPLIED

Specific condo types growing in appeal to the middle class

While there have yet to be specific statistics and formal data from the government on what constitutes the middle-income group in Cambodia, real estate industry experts have stepped up in providing rough gauges as to who the middle income group are and how much money they bring home at the end of the month.

In response to the supposed middle income class’ preference for condominiums, developers of affordable condos are now taking many things into account; considering the affordability, size, and location factors of their projects.

The 1000-unit BCK Condominium, one of the lowest-priced condominum development in the sector, seem to be steadying through in the right direction as they plan to design 16 metre-squared rooms that have a starting price of $14,590 per room.

Phorn Chan, sales manager of the BCK condo project, located in Pneat Village in Sangkat Steung Mean Chey, about one kilometre from the Khmer-Soviet Friendship hospital, told Post Property via phone that the 28-floor condominium has a price range from $14,590 to $30,000 per unit.

According to Chan, this project was specifically conceptualized and constructed for the middle-income group due to the significant number of childless families in Cambodia with an accumulated monthly income of between $500 to $600.

She continued, “This project is targeted at citizens with a low [to middle] income; people who rent someone else’s place can still buy a unit in this condominium to live in by using instalment plans to pay it off. At least it’s better than renting someone else’s place that renders them without their own property after the lease is terminated.”

Chan said that buyers have to fork out an affordable $250 per month to acquire a unit. The project will commence construction at the end of October and is set to finish in 2019.

Content image - Phnom Penh Post
Artistic rendition of the home layout of one of Residence L’s condominiums catered to the country’s middle-class. PHOTO SUPPLIED

Residence L Cambodia, another condo chain – with five different condo buildings – that has been dominating the market for the middle-class, gave two reasons why the company had initially decided to invest in developing condos for the middle-class.

Tuy Bun, shareholder of Residence L, said, “One is because the locations aren’t likely to attract rich customers, and secondly, the middle-class market is a lot bigger than the upper-class market,” adding that this particular group is on the search for modern living that is neither too luxurious nor too shabby.

He said Residence L condo units are priced between $40,000 and $80,000, depending on room layout and level.

“The company has provided an instalment plan with conditions that are suitable for customers with an average income that are able to afford it,” Bun said.

He added, “Our condominium investment was constructed for small families because the room is only about 30 to 50 metres squared, and would therefore be perfectly suitable for a family of three to live in a condo like this.”

Nevertheless, Kim Heang, president of the Cambodian Valuers and Estate Agents Association, said condos must have a number of facilities and amenities such as parking space, security, big public spaces, swimming pools, and gyms to earn the label ‘condo’.

“If there aren’t any of the services that are listed, it would be like putting white wine in a beer bottle,” he said.

He continued, “Constructing a condo without those services listed above and the room is only 16 metres squared, then it’s just a normal room for sale, not a condo; so, it’s better not to call it a condo unless the name ‘condo’ is ruined.”

He further exemplified, “Condos with the size of 30 square metres are reasonable enough; they’re acceptable if priced from $40,000 to $50,000.”

In regards to modern and shrinking Cambodian families, the fertility rate in Cambodia continues to decline: Cambodian families are getting smaller, with the average fertility rate decreasing from three infants in 2010 to 2.7 infants in 2014, said Tong Rathavy, chief of the National Maternal and Child Health Center.

“Because the country is developing, the number of children keeps declining as more and more people get educated, emigrate, and become more occupied with their careers.”

Thida Ann, associate director of CBRE Cambodia, stated that small condos aren’t suitable for long-term residency, but is more partial for provincial students pursuing higher education in the city. Furthermore, small units like these are not essentially condos, but apartments instead.

Condo units priced at $20,000 are suitable for people belonging in the middle class, according to Ann, as she believes that is a huge market in the country for this industry.

She added, “The middle class are the targeted customers for these condominium investors; there are many of them and they like to live in condos.”

She continued, “Cambodian people are starting to evolve from living in flats and villas to living in condos, since the land in the city is becoming narrower and more expensive, in addition to the traffic congestion problems.”

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