Foreign developers cause property market surge

Foreign-backed developments spring up continuously within the packed capital. Hong Menea

Foreign developers cause property market surge

Thu, 12 May 2016 ppp

Alasdair Richards

Future Phnom Penh condominium supply is predicted to be driven by international developers, with firms from Taiwan and China forecast to account for about 28.5 per cent and 18.5 per cent of total unit stock by the end of 2018, respectively, according to a report from property firm CBRE.

Phnom Penh’s turbocharged property market saw a significant increase in developer activity over the first quarter of this year, with a total of $1.65 billion invested in construction, compared to $448 million in the same period a year ago.

The figures come from CBRE’s latest survey of Phnom Penh’s property market.

The survey states that the amount of condominium units announced during the first quarter jumped 61.6 per cent, showing that the appetite of developers for these relatively untested properties was undimmed.

Average condominium sales prices, across all grades, appreciated by 4.1 per cent quarter-on-quarter, with off-plan, high-end prices rising by 5.7 per cent over the first quarter.

Phnom Penh land prices, which are expected to stagnate towards the end of this year, rose by an average of 4.8 per cent over the first quarter, with prices in Chroy Changva and 7 Makara districts rising by a healthy 8.8 per cent and 8.3 per cent quarter-on-quarter.

Turning to office space, the CBRE report says that only “limited” new supply came on stream in the first quarter, with three new office buildings collectively adding 17,260 square metres of leasable space to Phnom Penh’s stock. Overall occupancy dipped marginally.

In the retail sector, a mixture of new international shopping malls and prominent retail components mostly within residential and mixed-use developments will raise the retail supply bar by the end of 2018, according to CBRE.

Parkson Phnom Penh City Center, with 57,000 square metres of leasable space, is now scheduled to launch in the fourth quarter of this year, with Hongkong Land’s Exchange Square on track to deliver 8,000 square metres of retail space in the first quarter of 2017.

While no new retail supply was delivered over the first quarter of this year, Sorya Shopping Center, one of Phnom Penh’s first purpose-built shopping malls, announced renovation works, with the mall due to relaunch as ‘Sorya Center Point’.