Monthly Archives: April 2012

http://www.expat-advisory.com/articles/southeast-asia/cambodia/spoilt-choice  –

You could of course make your own way over the Japanese Friendship Bridge to CBRE’s most recent enterprise, the 17-storey Mekong Gardens, located at the Preakleap area, Chrouy Changvar. After all, this twin tower apartment block can be found just 15 minutes’ away from the city.

You could instead, however, take advantage of a silver air-conditioned Hyundai emblazoned with the skyblue Mekong Gardens logo, which transports residents from the heat of Phnom Penh central to its dusty outskirts. This service is typical of CBRE’s attention to detail and strong client focus. Indeed Frederic Chan, Property Manager with CBRE, had creative input in the concept of the flower-covered gazebos fronting the river.

This weekday shuttle service runs to and from the apartments to Canadia Bank and Diamond Island and is just one of the gratis services laid on for its residents. It is also an indicator as to the market sector CBRE aims to attract. The schedule, coinciding with the typical expat working week, means that the block caters primarily for foreigners with serious jobs but with an equally earnest need to switch off.

Rising up from the hub of a Khmer neighbourhood, the pristine towers, surrounded by carefully tended plants demonstrate proudly just how quickly the city and Peakleap are developing.

Once through manned electric gates, the Hyundai parks up in a resident bay and luggage is placed on a carrier by welcoming concierge. We have come to expect this level of service from an international hotel and also from CBRE’s other local sites, such as the Colonial Mansions. The location maybe different but CBRE’s vision is of a quality living space, that is not prohibitively expensive.

The reception area mixes hotel and corporate, comfort and business. The overwhelming impression however is one of openness and light. In contrast to more centrally located blocks, Mekong Gardens offers optimal window space. This in turn means that the plants that are a feature of the aptly named block thrive and bring a certain lushness.

But this design is not only about artifice. Each apartment has a dedicated post box, there are numerous shared bathrooms in the common areas, together with lifts and soft seating for visitors.

The concept of a studio flat is very much convenience over comfort. Yet at Mekong Gardens, it is not simply a functional box. Behind a solid wooden door, you are greeted by a sense of space, mirroring the feel of the reception area. The rear wall is an elongated patio door that leads onto a private balcony, which is large enough to host a table and chairs.

A resident’s (be they owner or tenant) every morning could mean waking to the tranquility of a sunrise over the Mekong, followed by a private outdoor breakfast. That breakfast could be warmed in the oven, defrosted from your ample fridge-freezer in the microwave or instead shared at the soon-to-be opened restaurant.

Hiring a house-keeper and a regular laundry service to remove the mundane from a packed schedule is an option. If not, the kitchen comes equipped with a dishwasher; similarly, a washing machine can be found on the second, more utilitarian balcony at the rear of the kitchen.

Behind the kitchen sits a dining area with a light wooden table and four chairs. Processed TV dinners do not have to be the life of the studio dweller. However, if a resident did want to spend his/her evening in front of the television, they would not be disappointed. Each apartment comes with an LCD screen and cable TV, a sumptuous sofa and a myriad of mood lighting options. There is even a choice of ISP packages for wifi use (pre-or postpaid), should he or she wish to access email or is missing today’s gadgetry.

The bedroom lies behind the sofa and is encased by the double wardrobe and a beautiful river view.

A space-creating mock stained glass door opens into the bathroom, which lives upto its name as it comes equipped with a bath tub, a rare commodity in Phnom Penh.

If taking a dip appeals, then residents are entitled to free use of a large swimming pool adjacent to Khmer style covered picnic areas. Gym, sauna and steam rooms add to the peaceful spa resort ambiance. This is made all the more enjoyable when you know these facilities are included in the rent.

A studio flat is let at $580 and the two and three bedroom apartments are priced at $850 and $1,050 respectively. Prices include furniture but not bills. However, with customary flexibility, Chan is open to negotiation, for those wishing to self-furnish.

This approach seems to be working: of the 146 units, 30 units were sold or let within the first six months of opening. A second bridge into the City, a speed boat dock and a retail outlet stocking essentials are also in the pipeline and can only serve to make this out of town haven all the more attractive.

Frederic prides himself on being able to anticipate an expatriate’s accommodation needs after a hard week’s work. He is hopeful that the Mekong Gardens will provide him or her with a feeling of rejuvenation at home, the only clear omission being the constant drone of construction noise.

Frederic’s thoughts are echoed by Kerya Ros, the onsite Operations Manager, who confirms that: ‘‘they (expatriates and their families) can spend their time enjoying the fresh air, without having to drive all the way to the beach’’.

Phnom Penh’s new residential development towers on “The Other Side” across the Japanese Bridge is Mekong Gardens, offering one-bedroom apartments for as little as $580 per month. Mekong Gardens is situated on the Mekong River side of the peninsula, but with equally stunning views of the Tonle Sap and the Phnom Penh skyline.

CBRE’s Mekong Gardens Property Manager Frederic Chan says the Canadia Bank group project, completed in April this year, was originally intended as condominiums, and while it has 30 to 35 owners, many on the upper floors, units are now also available as serviced apartments.

In an effort to beautify the property, an arched canopy gazebo covered in blooming vines has been built on the Mekong River side, adjacent to the swimming pool and above the floating boat dock.

The twin 17 storey tower buildings have a total of 146 units with about 90 now available, in one, two and three bedroom sizes. The two buildings are connected by a sky bridge on the 15th floor. Chan says there’s a housekeeping service for $30, $40 and $50 per month for 1, 2 and 3 bedroom units and daily laundry services, including ironing for $50 per month or $30 per month for three times a week. In addition to the one-bedroom units for $580 per month, there are fully furnished two-bedroom units available for $850 and three bedrooms for $1,050. The tenant has to pay electricity at the government rate, along with gas and water charges. The building has a central gas supply system and tenants can buy recharge cards, for both gas and electricity, at the front desk.

“The concept is to make it very attractive and easy for expat staff and even short term residents are welcome, almost like a hotel,” Chan said. Every apartment has a balcony, Hitachi refrigerator and LCD TVs hooked up to cable. “You can come without furniture, and that’s negotiable. We want people to come and talk to us. We are marketing to expats, NGOs, embassies, multinational companies or local big companies who can afford to hire expat staff. Those are our main targets.”

The premises also include free of charge for tenants a swimming pool with a bar and gym with running machines and bicycles. A mini mart is about to be opened downstairs and there’s a space for a restaurant which is looking now for somebody to fill. The swimming pool may be accessed at all times by tenants as long as they don’t make noise that disturbs the other residents, Chan said. “We are located 10 minutes away from the city centre in between two main rivers of Cambodia, the Mekong and the Tonle Sap. The location is ideal for people who want to enjoy the city and also the countryside of Cambodia. This gives you access to both city and country because it is only 10 minutes away from the centre.”

In addition to the Japanese Bridge, there’s a new Chinese-funded bridge across the Tonle Sap now under construction, which Chan says will make it even easier for residents to get into the city when it has been completed in an estimated two years’ time. A shuttle bus service is about to be launched, free for residents, departing each morning from Mekong Gardens to points in Phnom Penh including Canadia Tower and Diamond Island. The schedule is now being worked out. “The Mekong Gardens is a good place to live because we have everything you need. In the morning, you open your windows and you look directly on the Mekong or the Tonle Sap, which is very impressive. For internet, tenants can choose between several ISPs and wireless network for the whole place will shortly be installed, enabling guest to have prepaid or postpaid internet services.

While the penthouses have already been sold as condominiums, some higher floors, including 17, 15 and 13, are still available. “We understand expatriates and that’s the main point,” Chan said. “If they come here, we will be proactive in meetingtheir needs. The Mekong Gardens Serviced Apartments is a project developed by Canadia Bank Group in what is called the Preakleap area, Chrouy Changvar. Operations Manager Sereykerya Ros serves as the owner’s representative

Myanmar’s moves toward economic and political reform would not subtract from Cambodia’s regular stream of foreign investment, experts and insiders said – at least not in the short run.

Word of an investor-friendly Myanmar has spread quickly with the US’s partial waiver on trade sanctions in early February, and some of the region’s business players have called the country “ground zero for investment”, but Cambodia’s more than decade-long claim to political stability should eclipse Myanmar’s piecemeal reform, which a regime change in late 2010 set into motion after nearly 50 years of military rule.

“Political stability is the hot button for Cambodia, where they have gotten it right for foreign investors, and that’s a place where Myanmar can’t really complete yet,” Gordon Peters, manager at Emerging Markets Consulting in Cambodia, said this week.

Myanmar maybe turning some heads, but there will not be a flight of investment dollars that were originally destined for Cambodia, he said.  If Cambodia were to lose foreign direct investment (FDI) to Myanmar, it would likely be from the Kingdom’s garment manufacturing sector, worth US$4.25 billion in 2011, or 32.1 percent of gross domestic product.

“This is a place where you could see some long-term change,” albeit at a slow pace, Peters said. Some changes in milled-rice investment could occur as reforms in Myanmar progress, but “that’s not going to be a big loss in investment dollars for Cambodia”, he said.

An increase in tourists to Myanmar would be inevitably translated into more tourist dollars to Cambodia, Peters said. Angkor Wat will remain one of the main destinations for tourists in the region, whether travelers land in Yangon or Phnom Penh.  However appealing Myanmar’s recent reforms seem, continued progress is still far from guaranteed, Business Research Institute for Cambodia CEO and chief economist Hiroshi Suzuki said.

“I have concerns about the stability of Myanmar politics. I’m afraid that there could be some backlash from older generations, such as the army, who are not satisfied with the current reform,” he said.  Myanmar’s investment climate may need five to 10years to catch up with Cambodia, with large holes in law regulation awaiting repair, he said. Local businessmen in Myanmar have expressed a greater degree of faith in their new government’s ability to attract FDI.

 Park Hyatt Siem Reap will be the first Hyatt-branded property in Cambodia and the 14th Hyatt-branded property in Southeast Asia!

Hyatt Hotels Corporation (NYSE: H) announced today that an affiliate has signed a management agreement with Hotel De La Paix, Co., Ltd. for the first Hyatt-branded hotel in Cambodia. Under the agreement, Hotel De La Paix Siem Reap, one of the country’s top-rated hotels, will be rebranded as Park Hyatt Siem Reap. The hotel will close on June 30, 2012 for a complete renovation and is expected to open as Park Hyatt Siem Reap in the first quarter of 2013.

Located at the center of one of Asia’s major emerging cultural destinations, the property, designed by award-winning Bangkok-based interior designer Bill Bensley, was voted as Cambodia’s No. 1 hotel by Travel + Leisure and ranked No. 29 on its World’s Best Hotels 2010 list.

Park Hyatt Siem Reap will be situated nearby the renowned 12th century ruins of Angkor, a UNESCO World Heritage site that researchers believe was one of the largest preindustrial cities in the world. The temples in the area number more than 1,000 and include Angkor Wat, the world’s largest single religious monument. The hotel will also be a short distance from Siem Reap-Angkor International Airport, Cambodia’s second largest airport, which provides non-stop service to several major regional markets including Bangkok, Hanoi, Kuala Lumpur, Ho Chi Minh City, Phnom Penh, Seoul, Singapore and Vientiane.

Park Hyatt Siem Reap will include 107 guest rooms and suites. The hotel plans to feature two restaurants, one bar and a retail bakery. The hotel will also feature meeting facilities, a spa, fitness center, and two swimming pools.

The Past

Whether you realise it or not, most buildings have a property manager.  In a family home, it is often the men who take on this role with varied levels of enthusiasm and success.  In a school, a care taker, and all the way from a family home to the Burj Al Arab in Dubai, there are property managers taking care of their properties. 

This has not been the case in Cambodia where property management has been a widely neglected task.  Developers have frequently forsaken property management in the belief that lower running costs will increase profits margins.  This can be true in the short-term or if the property is small enough and someone is willing to invest his or her own time to maintain the building, but, more often than not, this is not the case and the mixture of a sub-tropical climate, low quality materials, sub-standard construction techniques and poor maintenance, sees the building age rapidly. 

This has led to the shortened life-span of buildings throughout Phnom Penh.  Buildings less than 10 years old look over 20 and buildings 20 years old, look closer to 50 (granted though, these buildings have endured much tougher times).

The Future

Moving forward, more attention needs to given to maintaining Cambodia’s buildings.  Whether you like it or not, buildings help define a city and buildings greatly affect the overall image and character of place.

With the emergence of Phnom Penh Tower and in the near future, Vattanac Capital, investments in property are no longer short term.  Large capital sums are being invested across all real estate sectors with developers planning ahead for the upward turn of the global economy and growing local market.  Cambodia and especially Phnom Penh will see new retail, office, residential, hotel and leisure developments springing up across the city and country in the years to come.  However, without careful property management, the life-span of these developments will be much shorter-lived than they should be and shorter than developers anticipate and day-to-day operations will suffer much more.

While some developers, such as those developing multi-storey office complexes, are aware of the need for good property management, the majority of developers in Cambodia are not and remain focused on short-term profit margins.  For example if you drive around Boeung Keng Kang today, you will see an ever growing number of 6 – 8 storey developments (why so many stop at 8 storeys is related to planning policy and permits).  The majority of these developments are destined to become serviced apartment complexes where the market is almost exclusively driven by expatriates and long-stay visitors.  This target audience expects high quality services, accommodation, facilities and maintenance, yet the majority of developers neglect property management.  Without good property management, the aesthetics of a building, the services such as; customer service; maintenance & repairs; internet provision; cleaning and; security will suffer, as will facilities such as; lifts; gymnasiums; spas (no apostrophe) and; swimming pools and it is likely health and safety will almost be completely neglected.  Effective property management will always benefit a building and is a good way to retain tenants!

Poorly managed tired looking properties will quickly find they cannot compete as newer, shinier developments come along and developers and investors will see their revenues erode, (rents and occupancy rates fall) and the value of an asset diminishes.  Thinking long-term, one skill property managers would bring is the ability to plan out maintenance schedules for major equipment.   This activity increases the life expectancy of equipment and will save landlords significant sums of money.  These maintenance schedules predict what components will wear out first and by doing so prevent broken parts rendering entire machinery and equipment inoperable.  Property management is about being pro-active not reactive, hence preventing issues from occurring before costs spiral.

What is required in Cambodia is a change in the attitudes of developers and investors towards effective property management, for the benefit of the buildings and for the profit margins of the developer, but also and importantly, Cambodia needs to develop its own skill set in the national population, more education is required for Cambodian nationals to learn about and engage in property management and real estate.