CBRE Launches Blueprint

At CBRE, we believe real estate sits at the heart of how people work, live and thrive. Blueprint is an online magazine where the intellectual capital and institutional knowledge that lives within CBRE is shared with the global business community through an array of engaging, thought-provoking and illuminating content.

On Blueprint, you’ll find stories informed by urbanists, academics and big thinkers around the world. Our stories are unified by business ideas that transcend commercial real estate and examine the built environment’s potential and power to impact businesses, cities and people—told through the lens of commercial real estate.

Whether you’re an industry professional, an urban enthusiast, a member of the general business community or even just a curious reader, we believe our stories will inspire you to look at the world of real estate from a new perspective.

To find out more about Blueprint, please follow the link below:

Blueprint INT EMEA CBRE Footer Banner 624X1241 CBRE Launches Blueprint

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Phnom Penh Condominium Market , CBRE Cambodia Market View in December 2014

Capture 300x29 Phnom Penh Condominium Market  , CBRE Cambodia Market View in December 2014

PHNOM PENH CONDOMINIUM SECTOR SEES RISE IN RESALE VALUES

                                                                                

Capture1 87x300 Phnom Penh Condominium Market  , CBRE Cambodia Market View in December 2014

Introduction

 The condominium market in Phnom Penh  continues to expand, with early investors in centrally located developments enjoying capital gains of up to 30% from early off-plan purchases.

Development activity of high-end condominiums looks set to continue in prime residential locations, with developers also looking to offer luxury projects outside of core residential districts.

CBRE has continued to witness strong interest from the wider Asia Pacific region, with increasing investment from Singaporean, Japanese, Hong Kong and Chinese residents. Although the comparatively high yield guaranteed by a number of leading developers is appealing to oversees purchasers, the main driver remains anticipated capital growth.

Currently, there are 35 Condominium projects in Phnom Penh, including both finished projects and developments currently under construction.

Q1, 2015 will see the sales launch and groundbreaking of Sovann Condominium, a 104 unit luxury development on Mao Tse Tong Boulevard,  BKK1. Sky Villa Tower, comprising 254 units across two towers, is due to start construction by Olympic Stadium on Sihanouk Boulevard, with completion set for 2017.

Supply

Phnom Penh is experiencing a significant increase in supply, with De Castle Royal delivering 414 condominium units in Q3, 2014 and with Galaxy Residence having delivered a further 44 units in Q4, 2014.

Overall supply in Phnom Penh is due to increase by 533.75% by the end of 2018, driven by large-scale new projects such as D.I. Riviera and Olympia City, both currently under development by OCIC.

Sales

Sales of condominiums in Phnom Penh have traditionally been heavily marred by publicised failures of developments that have been sold off-plan and then subsequently ceased construction. Due to the successful completion of key new projects, such as De Castle Royal, this trend has clearly come to an end as confidence grows amongst domestic and international purchasers.

Early purchasers of off-plan condominiums, in successful schemes, have achieved healthy capital appreciation over the past year, with those who purchased in 2008 being in a position to resell for a premium of up to 30% over the course of 2014.

Achieved prices for high-quality  condominium units range from $1,500 – $3,000 USD per sq.m in central areas of Phnom Penh. The Bridge, which is due to deliver a 762 condominium units, accounts for the upper figure.

Capture2 300x142 Phnom Penh Condominium Market  , CBRE Cambodia Market View in December 2014

Demand

Demand for condominiums is anticipated to increase and be met by supply over the course of 2015 through to 2016. The introduction of high quality projects in central locations will offer prospective investors an opportunity to acquire products that focus on the needs of a heavily expatriate driven area of the Phnom Penh residential market, as foreign nationals continue to require exclusive and up market accommodation in prime locations. Demand is also increasing from an ever more affluent domestic population, which is due to account for a notable proportion of purchasers over the coming years. Domestic demand is a key element of a successful condominium project, due to foreign ownership of an individual building being restricted by law at 70%.

Overview

Q1 2015 will see the launch of Sovann Condominium, a 104 unit luxury development located on Mao Tse Tong Blvd, BKK1, in addition to that of Sky Villa Tower, set to launch a further 254 units by Olympic Stadium.

The Q4, 2014 launch of Bhumi Emerald Condominium is set to deliver 47 luxury units located in the Toul Tompong area. The development will be set over 24 floors and is due to come on-stream in 2017.

Q3, 2014 saw the successful completion of De Castle Royal, which has set a new benchmark for quality in the market, further adding strength to the ever-growing sector. Comprising a total of 414 units, the project has been key in rebuilding confidence in the  off-plan sales market.

CBRE note that a number of individuals, in addition to established developers, are making considerations towards the construction of further condominium developments. Whilst the majority remain focused on prime, central residential locations, it is likely that development activity will increase in secondary locations over the course of 2015.

 

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CBRE Cambodia have been registered by SECC as valuers for the Securities Sector

Capture 228x300 CBRE Cambodia have been registered by SECC as valuers for the Securities Sector

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Residential villa & shop house market, CBRE Cambodia MarketView in November 2014

November 2014 300x23 Residential villa & shop house market, CBRE Cambodia MarketView in November 2014

STRONG OFF-PLAN SALES CONTINUE TO DRIVE RESIDENTIAL DEVELOPMENT ACTIVITY ON OUTSKIRTS OF PHNOM PENH

November 2014 1 88x300 Residential villa & shop house market, CBRE Cambodia MarketView in November 2014Introduction

The villa and shop house market has continued to expand over the course of 2014, with healthy off-plan sales levels prompting further development activity.

New high quality supply continues to enter the market, with development activity focusing around secondary locations on the outskirts of Phnom Penh.

Supply

The supply of new ‘borey’ developments has continued to increase over the course of 2014, with predominantly local developers launching sales of projects located in the north of Phnom Penh.

The standalone villa market remains active, both in terms of sales and residential leasing. Villas with land plots in excess of 500 sq.m remain a sought-after asset, with investors looking to acquire sites for mid to high-rise developments, due to the shortage of reasonably priced, centrally located vacant land plots.

The resale market for existing individual villas remains buoyant, with a steady flow of villas offered for sale in central areas of Phnom Penh.

2014 has seen iconic colonial villas offered for sale, such as The Mansion, an early 20th century residence located behind the FCC overlooking the Royal Museum, currently on the market and ‘No Problem Villa’, located on Street 178, which successfully transacted in Q2, 2014.

Demand

Demand for villas and shop houses within ‘borey’ developments remains strong, driven principally by Cambodian nationals able to take advantage of staggered payment options and in-house finance schemes.

Shop houses, comprising upper floor residential accommodation and ground floor retail space continue to be a popular option for Cambodian nationals, due to their relative affordability and the option of using the unit for business purposes in addition to residential accommodation.

Sales and Rents

Off-plan sales rates remain encouraging, with prices ranging from in the region of US$400   to US$1,800 per sq.m, based on Gross Internal Area (GIA) for residential villas and shop houses within ‘borey’ developments.. Achieved rental rates for villas in prime residential areas, such as BKK1, have risen over the past 12, with rent payable ranging from US$3,000 to US$4,500 Per Calendar Month (PCM) for standard sized villas.

November 2014 2 300x190 Residential villa & shop house market, CBRE Cambodia MarketView in November 2014

Overview

Overall the demand for villa and shop houses in Phnom Penh remains high, stemming principally from increasing urbanization and rising standards of living. The successful sales rates of recently completed schemes, in addition to projects currently under construction, gives testament to the strength in demand for quality villa and shop house residences.

The vast majority of current development activity takes place in secondary locations outside of central Phnom Penh. This is principally due to the scarcity of centrally available land and the high cost per square metre in primary locations. Whilst the healthy rates of sales are positive endorsement of the market, increased development and activity on the outskirts of the city will continue to place greater strain on Phnom Penh’s underdeveloped road and wider transport infrastructure.

Whilst off-plan sales are the principal means of disposal, both resale and rental markets, particularly within prime residential areas, remain strong. Over the past 12 months BKK1 has seen the most significant increase in both achieved rental rates and capital values, driven by demand for villa accommodation for both commercial and residential uses and the acquisition of villas for the purpose of redevelopment.

Given the location and quality of current pipeline developments, it is likely that strong off-plan sales rates and absorption of developed stock will continue over the course of 2015, with the fundamental drivers of demand, in the form of urbanization and rising standards of living, likely to continue to support both sales rates and the development of new projects in the short to mid-term. Whilst with the volume of future planned projects, due to the increasing popularity of allocating domestic capital into residential development, in addition to the lack of development controls, oversupply remains a risk, it is likely that rising demand will continue support increasing supply through to 2016.

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