V trust appraisal market updates

PROPERTY MARKET

UPDATES

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By Hoem Seiha,

Director of Research

H/p: 012-699-553 | [email protected]

Website: www.vtrustappraisal.com

Table of Contents

I. Cambodia’s Economic Overview

II. Phnom Penh Overview

III. Commercial Sector

IV. Residential Sector

V. Borei Housing

VI. Serviced Apartments

VII. Condominium Development

VIII.Land Price Updates

IX. Bank Credit Absorption by Sectors

X. Property Outlook

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Cambodia’s Economic

Overview

“Cambodia’s economic growth remains strong despite domestic uncertainty and instability in neighboring countries and is projected to reach 7.2 percent by end of 2014.”

Enrique Aldaz-Carroll, Sodeth Ly (2014), World Bank

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GDP Growth 4

Original Source: Cambodia Economic Updates, World Bank (April 2015)

Phnom Penh Map 5

Source: World Trust Estate

Demographics

• About 1.69 million is the number of Phnom Penh Population (National Institute of Statistics).

• Other informal estimates say the population could be

more than 2 million.

• Population average growth rate is about 4% y-o-y (Word Bank).

• The population density is about 5,343 inhabitants per square kilometer in recent years (Wikipedia).

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Population by Districts 7

Original source: http://www.citynet-ap.org/En/user/resource/docs/241.pdf

Incomes of Population 8

$102 $106 $100 $107 $136

$498 $480 $443 $462

$587

3%

-5%

6%

28%

-4%

-8%

4%

27%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

$-

$100

$200

$300

$400

$500

$600

$700

$800

2009 2010 2011* 2012* 2013*

(*) Preliminary results

Source: National Institute of Statistics; Graphed by Park Cafe

Disposable Income in Phnom Penh (Average Value per Month)

Per Capita Per Household

Change (%), per capita Change (%), per household

9Rising of Middle Class

Surveyed conducted in 2014 among 990 white collar workers in Phnom Penh

Commercial Real Estate 10

• Commercial property market has been growing strong

since the last few years, with the supply of major

commercial development centers such as Sovanna Mall,

Canadia Tower, Phnom Penh Tower, and lately the

Ratannac Tower and AEON shopping mall as well as the

soon-coming Parkson Mall.

• About 275,000 sqm is the the total supply of retail

property in 2015, contributed hugely by the coming of

AEON Mall (Retail Market Phnom Penh, Sept 2014,

CBRE).

Retail Sector 11

It is estimated that about 300,000 sqm

of retail space is slated for the market supply

by the end of 2016 (Retail Market Phnom

Penh, Sept 2014, CBRE).

Office Center

About 190,000 sq.m of office space

has supplied into Phnom Penh office market

since 2012, as no more supply has been

added to the market in the last few years

(Phnom Penh Market Review, March 2014,

CBRE).

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Residential Market Overview

• 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.

Source: CBRE Residential Market Review (Dec, 2014)

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Housing Demand

“10,000 is the number of families from other provinces moving to Phnom

Penh every year.”

Lao Tip Seiha, director of the department of construction at the Ministry of Land Management, Urban

Planning and Construction, as quoted by the Phnom Penh Post, 2011

Therefore, housing demand is therefore estimated at a modest figure of

10,000 units every year (Phnom Penh Post, 2015).

110 is the number of registered “borey” development projects, both

complete and under construction (Ministry of Land Management, Urban

Planning and Construction, 2015).

Housing demand is also driven by a shifting trend from extended to

nuclear family and increase of newly-married couples every

year as a result of baby boom.

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Median Price per Sqm (Built-up Area)

$550 $616

$738

$1,393

$805

$1,128

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Single-storey

Flat

Double-storey

Flat

Linkhouse Shophouse Twin Villa Single Villa

Average Price per Sqm (Built-up Area)

Median Price per Sqm (Built-up Area)

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Source: Century 21 Rattanka

Phnom Penh’s Apartment Market 2014

There are almost 400 apartment buildings,

the majority of which are small and family-

run apartments.

Source: VTrust Report on Apartment Market (2014)

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Supply & Demand

About 3,500 is the number of high grade

serviced apartment units offered for rent in

Phnom Penh in 2014.

This market is driven by about 50,000 of

foreigners living and working in Phnom Penh.


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Occupancy18


Rental Prices19

Unit Sizes20

Phnom Penh

Condominium Market

• The existing market supply reached 13 completed condo

projects with about 3,090 condo units as of fourth quarter of 2014, and many more condo units are expected to be ready for buyer occupants in the following years.

• By 2018, the total supply projected to be ready for owners will

reach about 18,000 condo units. Currently, there are 30 condo projects, and 18 projects are under construction.

• More than 15 other condo projects was announced in the first

of half of 215, slated for an additional supply almost 8,000units by 2018.

Source: Century 21 Cambodia; Additional Reporting by VTrust Appraisal

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22Condominium Supply

23Condominium Supply

24Condo Development Status

Finished21%

Under Construction

75%

Behind schedule4%

Status of Condominium Developments as of 1st Half of 2015

Source: VTrust Appraisal

25Condo Concentration

Recent Condo Projects

There are about 10 other condominium projects announced by the developers in the first half of 2015. These are some of them:

1. Sovann Condo Project

2. Monorom Condo Project

3. The Bay Condo Project

4. The Peak Condominium

5. TK Royal One

6. La Vie Condo Project

7. Sky Villa Tower

8. East One Condominium

9. Bodaiju Residences

10. Sun City, Tonle Bassac

11. Etc.,

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Phnom Penh Land Prices

About 15% is the average growth rate of

land prices in Phnom Penh from 2013 to

2015.

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Land Prices – Chamkarmon 28

Bank Deposits from Private Sector

US$

8.81Billion

2014

US$

6.88Billion

2013

14.2% yoy

30.6% yoy

Sourc

e: W

orl

d B

ank;

Cam

bodia

n A

uth

ori

ties

Sourc

e: W

orl

d B

ank;

Cam

bodia

n A

uth

ori

ties

Loan-to-deposit ratio

Bank Credit Absorbed by Sector

19%

Construction

& Real Estate

10.4%

Agriculture

35.9%

Wholesale

& Retail

Sourc

e: W

orl

d B

ank;

Cam

bodia

n A

uth

ori

ties

9.6%

Manufacturing

Sourc

e: W

orl

d B

ank;

Cam

bodia

n A

uth

ori

ties

Residential Outlook

Residential market demand is primarily

driven by:

• especially on “borey” housing, the increase of

newly-married couples every year in

Phnom Penh

• About 10,000 new family entries into Phnom

Penh every year

• Rising of disposable income levels of

Phnom Penh Population

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Commercial Outlook

Our projection for the long run in the commercial

real estate sector by the next 5 years will grow by

double, as bolstered by the second AEON mall in

Phnom Penh Thmey. This estimation is based on:

• Increase of establishment registrations every year, thus boosting the need for office space.

• The increase of income levels of the population

boost the need for mid-to-high-end consumer

products, thus driving retail sector.

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External Impacts

• However, the recent crash of China’s stock market has

resulted in negative impacts on Chinese-reliant economies

in other countries, potentially including the U.S.

Serafino, Phil, 21 July 2015: China's Aftershock Ripples

Through Sales of Cognac to Ore. Bloomberg.

• This might also has a negative impact on property market

in Phnom Penh, as Chinese investments in construction is

recorded at US$1.4 billion in the first four months of

2015.

(Phnom Penh Post, Aug 2015: Mixed blessing from China’s

stock market crash)

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https://en.wikipedia.org/wiki/Bloomberg_News

Potential Areas 36

N

EW

S

Phnom Penh Thmey, Russey Keo, Chrang

Chamreh – Residential Potential37

N

EW

S

Chrouy Changva – Potential 38

Boeng Tompun, Chak Angrae

areas – Residential potentials 39

N

EW

S

Chba Ampov – Residential

Potential 40

N

EW

S

Thanks for your Time

Contact#113 (Parkway Square) Mao Tse Tong Blvd., Phnom Penh, Cambodia |

H/p: (855)12-699-553

Office: (855)23-220-098

E-mail: [email protected]

Website: www.vtrustappraisal.com

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