Written by Peter Olszewski
Friday, 04 April 2008
Edward Hopkins, managing director of CB Richard Ellis’s Cambodian operations, says the company is carefully evaluating the market here “with a view to market entrance.”
The world’s largest com-mercial real estate services listed company, Los Angeles-based CB Richard Ellis, has dipped a toe into the Cambodian market to test the waters for a permanent office in Phnom Penh.
The company, which went public in 2004 and has more than 300 offices globally with revenues of over $4 billion, is operating in Cambodia and evaluating the market with personnel working under its CB Richard Ellis Vietnam banner.
Managing director of Cambodian operations Edward Hopkins told the Post that “CB Richard Ellis is carefully evaluating the market with a view to market entrance.”
“We don’t have a company here yet. But we are writing business and we have the right to assign those contracts back over to the Cambodian company when and if it’s operational,” he said.
The business manages the Colonial Mansion serviced apartments in Khan Daun Penh, Phnom Penh, and has other projects underway.
Hopkins explained that last August Colonial Mansion was bought by one of the company’s clients, which he described as “a London-listed fund on the alternative investment market that has raised money solely for real estate development in the Indochina region.”
“They have five sites in Cambodia and Colonial Mansion is one of them. This is the only one that’s completed – the rest are development sites. We’re about to start building another one next door, in the same sort of style, but probably a lot higher quality,” he said. “We thought while we are doing next door we might as well redo this one, and then in 18 months’ to 24 months’ time we will reopen both strongly.”
He added CB Richard Ellis and the same client had found other sites in retail as well as serviced apartments and hotels.
Hopkins said there has been some misunderstanding locally about the company’s exact role in the real estate sector.
“We’re not a developer, we’re not an investor,” he said. “We’re a services company; we service the investors and developers, so we provide all settlement, fee facilities, market studies, consultancy, advisory, sales, marketing, property management, investment brokerage in terms of introductions and straightforward brokerage of all types, whether we’re representing buyer or a seller, landlord or tenant.
“We do represent a lot of tenants – we have a lot of global mandates and corporations will use us where we have a presence.
“If those guys are coming into Cambodia, they would generally come to us.”
He said the firm offers commercial services but does not do much in residential leasing. On the other hand, the company might manage an entire development of residential villas, in which case it would get involved in the leasing.
Hopkins said the company has been investigating the Phnom Penh market because, with the instability and lack of security no longer an obstacle, the company believes economic development can now flourish.
“Cambodia is now acceptable – the Cambodian People’s Party has done a very good job in this department,” Hopkins said.
“Phnom Penh is also very strategic. It’s between two big centers in the region – Bangkok with 15 million and Ho Chi Minh City with seven or eight million.”
Hopkins said the coast of Cambodia also has tremendous potential. “We feel very bullish about the development of the coast and the government seems very serious about allowing high-end development on the coast.
“We see massive potential along the coast, absolutely huge potential.”
There is a lot of wealth in Japan and Korea, and emerging wealth in China, and they are cold countries. The idea of escaping a bitter Beijing winter for some sunshine in Cambodia, Thailand or Vietnam will be attractive.
– Edward Hopkins, CB Richard Ellis
One of the major reasons for the potential is the advantage of mild weather conditions. “In the region there is a difference between what can be quite rough weather and what can be very mild weather. The Camau Peninsula of Vietnam protects the Gulf of Thailand and the islands and coastline of Cambodia,” Hopkins said.
“The area is not prone to typhoons, the seas are very shallow which means the waters are warm, the climate is good all year round and it doesn’t get that much rain.”
He said another area the company sees big potential in – due to the improved border crossings between Thailand, Cambodia and Vietnam – is yachting. He noted that marinas are going up in the Gulf of Thailand.
“The Gulf of Thailand and the nearby area is going to become the playground of the rich in the region, as the Gulf of Mexico is to America or the Mediterranean or the Canary Islands are to Europe.
“There is a lot of wealth in Japan and Korea, and emerging wealth in China, and they are cold countries. The idea of escaping a bitter Beijing winter for some sunshine in Cambodia, Thailand or Vietnam will be attractive.”
Cambodia also has another natural advantage over Vietnam, Hopkins said.
“One thing that Cambodia has that most of Vietnam definitely doesn’t have – it has sunsets. Most people when they go on holidays, at the end of a hard day of doing nothing or maybe retail therapy or a round of golf, is that they want to sit and watch the sun go down. And that they can do in Cambodia.”
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