Monthly Archives: November 2011
Asia Pacific Retail MarketView
- Retail sales growth begins to slow across the region
- Prime retail rental growth strengthens despite economic worries
- Fast fashion and luxury retailers continue to expand
- Rental growth set to ease as consumers, retailers turn more cautious
Asia Pacific Office MarketView
- Occupier demand remains firm in Greater China but weakens elsewhere
- Rental growth begins to moderate across the region
- China leads regional decline in vacancy
Supply pipeline continues to diverge between Asia and Pacific
Asia Pacific Capital Markets MarketView
- Market sentiment positive but deal flow weakens towards end of quarter
- Australia continues to record growth in cross-border acquisitions
- Institutional investors most active but more corporations buying for self-use
- Market fundamentals remain healthy but investors exercise more caution
Asia Pacific Capital Markets MarketView Q3 2011
South Korea lends Cambodia US$52.5 million for Road Renovation
South Korea has loaned Cambodia circa US$52.54 million to renovate the 63.5km long National Road 21 which connects Kandal to Svay Rieng provinces. According to the statement, the loan contains a 0.01% interest to be paid over the next 40 years.
“National Road 21 will be renovated with rubber concrete and its 58 bridges will be reconstructed. This project will help transportation in Cambodia run Smoothly across the border with Vietnam.”
Cambodian Banks and International Rating
Bankers say ‘Profits are up, loan portfolios are growing at a fast tick and non-performing loans are shrinking’
Moody’s, and Standard and Poor’s, two rating agencies recently downgraded two of Cambodia’s major banks, Acleda Bank and Canadia despite increased performance of both the banks from 2010 in relation to their loan portfolio sizes and the falling percentage of non-performing loans. Mr Billmeier (vice president of Canadia Bank) commented loaning conditions allowing extra collateral other than just land titles to be used as collateral, does increase some short term risk.
Both Acleda and Canadia said that most of their profits were coming from lending to the export services and agricultural sectors. In the downgrading rating agencies cited the conditions in the USA and Europe, Cambodia’s largest export market as having the potential to be detrimental upon the banks performances.
Despite this country head of Cambodian Public Bank, Phan Ying Tong said in an e-mail
“We expect the outlook for this year and 2012 to be positive… The banking sector is expected to perform better overall as most banks reported higher growth in deposits and loans and overall improvements in their financials.”
Another Boost to Phnom Penh
It has been reported by the Cambodia Daily that direct daily flights between Cambodia and Australia are ‘one step closer’. A proposal submitted by ‘a state owned’ Australian airline has been passed by the State Secretariat of Civil Aviation here in Phnom Penh and sent for final approval to the Council of Ministers.
If the following stages of approval are accepted the unnamed airline will become the second largest carrier operating in Cambodia after Air France.
This would be the first non-stop route and would boost tourism and the economy of both countries as well as strengthening diplomatic relations. Phnom Penh would clearly benefit and the addition of another well established flight carrier to Cambodia would send further signals of the development which is occurring throughout Cambodia and in Phnom Penh
Mekong Gardens Party Coming Soon
The new serviced apartment and condominium complex will be hosting its launch party at Mekong Gardens on the 25th of November.
Details of the event to follow
US$5.6 Billion Approved Investment in Cambodia & Property Development
Approved investments in Cambodia reached US$ 5.6 billion during the first nine months of the year a 305% increase compared to the same period the year before according to data from the Council of the Development of Cambodia (CDC). However it is important to consider that the information can be skewed from a very small number of very large investments such as in July when a fertilizer company from England called Nitrogen Chemicals and Fertilizer Ltd was approved for a US$2.2 billion investment.
Shukaku Erdos Hongjun Property Development Co which is a joint venture between China and the Cambodian firm Shukaku Inc was also approved a US$2.1 billion investment for a property development project on Boueng Kak Lake.
Of the 100 projects approved during the first nine months, 54 are in the garment sector and shoe manufacturing sectors. Hiroshi Suzuki, chief economist at the Business Research Institute for Cambodia commented “The increase in approval is very good news. The approval amount might take a few years to come…but it’s good because if the approval amount increases, that means the inflow will increase in the future.”
After the global economic crisis which impacted Cambodia in 2009 and 2010, Cambodia is showing strong signs of recovery in the real estate, property development and other agricultural and manufacturing industries. CBRE Cambodia continues to be at the forefront of the real estate market assisting many new entrants and established companies with their property needs in the Kingdom.
Property Tax
The Ministry of Economy and Finance will begin appealing to property owners to pay their taxes after too few property owners registered for tax payment by the original September 30th deadline said Mey Vann the Ministry’s Finance Director.
The Ministry is to launch a media campaign to educate property owners and the Ministry has vowed to punish tax evaders. A lack of transparent tax information and guidelines to help people understand has been, in part, blamed for the lack of property tax payers registering.
Aeon Mall Co Ltd has bought 6.7 hectares of Prime Real Estate in Phnom Penh
A substantial real estate deal transacted last month in Phnom Penh. After Hong Kong Land entered the Cambodian real estate market in April this year, this deal brings the Japanese shopping mall developer Aeon Mall Co Ltd into Phnom Penh. The real estate deal is for 6.7 hectares of land next to the recently opened Sofitel Phokeethra hotel (between Sothearos Boulevard and the Tonle Bassac). The land was purchased from South Korea’s, GS Engineering & Construction approximately a month ago with the help of a Cambodian investor. The exact details of the deal have not been disclosed but according to the Cambodia Valuers and Estate Agents Association the land is valued at circa US$1,500/sq.m. At that price the deal could potentially be worth US$100 million.
Commenting on the news that a large Japanese investor has entered the Cambodian property market, Daniel Parkes, Country Manager of CBRE Cambodia said:
“I think it is great news that there is a large Japanese retailer investing in Cambodia. Previously we have seen Malaysian and Vietnamese investors and now we are seeing investors from Japan and Hong Kong, which are premium developers entering the market.”
In April Hong Kong Land, a subsidiary of the investment giant Jardine Matheson, paid US$33.65 million for a 1,625 sq.m plot between Wat Ounalom and the Tonle Sap river, a 10,500 sq.m site directly behind the US embassy and two serviced apartment buildings near Monivong Boulevard called Colonial Mansion I and Colonial Mansion II.
Savvy premium investors are increasingly investing in the Cambodian real estate market from developed economies and by companies that bring with them excellent track records.