Condos going up, but rentals coming down in Tuol Tompong

Another new condo rises from the street in Tuol Tompong, where rentals are slowly coming down. HIN PISIE
Another new condo rises from the street in Tuol Tompong, where rentals are slowly coming down. HIN PISIE

Condos going up, but rentals coming down in Tuol Tompong

With a property boom continuing unchecked in Tuol Tompong and Phsar Daeum Thkov, real estate agents, renters and buyers are noticing a cooling of prices as owners and investors seek to profit before the market becomes even more saturated.

Noun Rithy, CEO of property consultants Khmer Foundation Appraisal, said recently that rentals in the two communes – located close to the ever-popular BKK1 and Tonle Bassac areas – were down 10 percent on the same period last year, and could fall further as more units become available.

Still, he says, the property market is maturing to the point that such declines are unlikely to deter new investors.

“Although it is becoming more competitive and supply is on the rise, I’m not concerned as Cambodia has integrated as a member of Asean [Association of Southeast Asian Nations] and the wider global economic community,” he said.

“This motivates and reassures international investors, and I am sure that the demand for apartment units will rise. There cannot be demand unless there is supply … if we wait for the demand to rise before we start supplying, it will be problematic.”

Currently rental prices of so-called Grade B one-bedroom apartments in Tuol Tompong and Phsar Daeum Thkov range between $350 and $750 per month depending on facilities. Two-bedroom apartments were going for between $750 to $1,500 and three-bedroom units in the range $1,500 to $2,500, according to Rithy.

“There cannot be demand unless there is supply … if we wait for the demand to rise before we start supplying, it will be problematic,” he said.

This is a discount of about 20-30 percent on the more established BKK1 area, according to Chrek Soknim, CEO of Century21 Mekong consultancy.

“BKK1 is a better attraction as the area is popular with foreigners and has good infrastructure with many different types of services,” he said.

“Tuol Tompong and Phsar Daeum Thkov communes don’t have those attractions yet, but things are changing and they will become more popular.”

Chrek said that as of the first quarter of 2018, there have been 148 apartment projects completed of some 365 ongoing projects in Phnom Penh. Many of those were in Toul Tompong and Phsar Daeum Thkov, where the average occupancy rate was about 70 percent – healthier than Phnom Penh as a whole.

Chheng Keat, meanwhile, head of Tuol Tompong commune said there were around 20 under-construction projects in the area with many more scheduled to break ground in coming months.

This is even causing a spillover further afield.

“My apartment listings have now priced down a bit and I’ve improved the facilities to better attract tennants, said one owner who asked not to be named.

He owns units in the Phnom Pehn Star complex in Boeung Trabek , a commune bordered by Tuol Tompong.

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