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In vogue mid-range condos a hit with the middle class

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The Diamond Home 1 at Toul Tum Poung; an artist’s rendition. PHOTO SUPPLIED

In vogue mid-range condos a hit with the middle class

While the condo sector in Phnom Penh continues its swell, the spotlight tends to be on massive mixed-use developments or high-end condos, which are averagely priced at almost $3,250 per square metre.

This is according to the latest Q1 of 2016 Phnom Penh Market Outlook report released by CBRE earlier this month.

Mid-range and affordable condos, on the other hand, command a more humble average of approximately $1,500 per square metre.

Although the issue of condo oversupply in Phnom Penh has been repeatedly mused over by real estate experts since the unmitigated condo boom at the start of 2015, it largely refers to high-end condos while affordable and mid-range condos take a backseat.

According to the same CBRE report, “future Phnom Penh condominium supply is set to be principally driven by the arrival of international developers, with units delivered by companies from Taiwan and China,” with 36 per cent of the planned condominium projects falling into the high-end category of overall supply by the end of 2018.

Nevertheless, condos like The Diamond Home 1 and L Residences are proving that affordable and mid-range condos developed by local companies have been silently orchestrating their own success in the shadow of their high-end counterparts. These condos have targeted, and are priced accordingly to the income of young working professionals.

The Diamond Home 1, an affordable condo located in Toul Tum Poung’s Chamkarmon district, is fully sold out, with half of its 50 units purchased by local buyers. Its developer, Phnom Penh-based 5Bright Siblings Construction & Property, continues to ride on the wave of its first successful project and plans to build a second condo simply called The Diamond Home 2.

“Most of our buyers purchase the units to live in and not to rent out. The price range of our units is between $40,000 to $60,000 depending on when buyers purchase it and what unit layout it is,” said Somnob, an administration representative for The Diamond Home 1, adding that the condo is due to be completed later this year.

According to Somnob, this has spurred the developer to construct The Diamond Home 2 – its sister project lined up to be a larger building at 250 units, located in front of Kong Hong Factory on Monivong Boulevard.

Although the price range for the second project is still undecided, the target clientele remains unchanged – locals first, then foreigners. The Diamond Home 2 will begin construction next month, and is expected to be completed in late 2019.

In the mid-range spectrum, L Residences has been quietly amassing quintuple affordable and mid-range condos. Its first three developments – L Boeung Trabek, L Sovann, and L Olympic – have been sold out, with an estimated half of all buyers being local. L Boeung Trabek is awaiting residents to move in, while the other two are locked in for completion later this year.

Its fourth and fifth condos, L BKK3 and L Boeung Trabek 2, will both be completed in 2018, with the former already 70 per cent sold out.

The price range for all of L Residences’ condos is between $40,000 and $100,000, and will contribute a grand total of approximately 800 units to the overall condo supply once all its developments are finished.

Seakly, sales representative for L Residences, said, “Our buyers are an equally divided mix of locals and foreigners, and most of them buy the units to rent out.”

Maxem Property managing director Saraboth Ea said earlier this year that developers were starting to take notice that high-end condos would eventually run into an oversupply, while locals continued the hunt for affordable housing.

“Real estate companies are realising that there is not enough supply in mid-range and affordable condo segments and are constructing more of these housings; and hopefully this will be a trend that will happen more so this year than in the past,” he said.

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