The residential market in Cambodia is dominated by three main categories of housing; apartments/condominiums, shophouses/townhouse and villas. The residential market involves us all and we therefore all have our own options about it. The residential market can, however, be very challenging for developers and investors. At the same time, the residential market in Phnom Penh is very healthy with average house prices increasing robustly.
Villas are marketed for sale with two components, firstly land and secondly the construction of the dwelling itself. Almost all of the villa developers sell land plots with the option to build houses either at cost or at a small margin. Purchasers are able to buy the land and then hold off on construction until they are ready.
As with all property, location is key to a building’s value and villas located in popular parts of Phnom Penh are very valuable. In Boeung Keng Kang there is a diminishing supply of villas because properties are being converted into commercial units. CBRE Cambodia has recently had some real success with linking up national and international purchasers with good quality villas.
A condominium, also referred to as an apartment, is a single-floor or duplex unit within a multi-storey building. There is a shared roof, common facilities and a common access. The market for condominiums is still relatively small and in an early stage. This is set to grow in the future and it is likely to follow the markets in Singapore and Ho Chi Minh City. The market for renting apartments is larger and this can sometimes lead owners and developers to the thought that anything they bring to the market will be a success. This is not true and developing an apartment building is a complex undertaking and it is vital that the size, type, facilities, specification are correct. It is important to have the correct mixture of one, two and three beds along with penthouses to suit the market needs. The style of the apartment also needs to reflect the needs of the intended market, for example, should a western kitchen be installed, or is a more traditional kitchen more appropriate.
An area where CBRE Cambodia is most often used and consulted on is the marketing of apartments. It is here that we are able to build on the knowledge base of over 300 offices worldwide. It is accentual to create the right marketing plan for a specific building and this might include having a launch party, a brochure, advertising boards or having a website made.
A shophouse or townhouse is a dwelling attached on a minimum of one side but could be two or three sides. It is usually multi-storey and has no private external areas. It’s typical dimensions are 4.2m wide by 16m or 20m deep. These are very popular with Cambodian nationals as they allow people to have a small commercial space with their person residential accommodation above. Shophouses are flexible and relatively cheap to rent, which is why they are so sought after. The unit price of a shophouse/townhouse is equal to or cheaper than the average condominium, which makes it more affordable. Some units are being sold for US$40,000, although often the interior is basic without a fitted kitchen or bathroom and sometimes with screed floors and only a concertina door.
The residential property market is a fascinating part of the property market but it should be treated with caution, with the right guidance and knowledge it can be very rewarding.
David George is country manager of CBRE Cambodia and a member of the Royal Institute of Chartered Surveyors. [email protected]