With the lack of parking spaces long plaguing Phnom Penh, the private sector has taken it upon itself to alleviate one of the biggest problems the capital city is facing.

Touch Samnang, deputy chief executive of Overseas Cambodian Investment Corporation (OCIC), said the firm was waiting to unveil the first underground parking space designed for the masses. “According to the momentum of the construction and our progress, we might be able to commemorate the opening of the first underground public parking space within the next one to two months,” he told Post Property. Currently, he added, OCIC is waiting for City Hall to organise the roads around the area.

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This debut project is situated between Canadia Tower and Vattanac Capital, and, according to OCIC’s site manager Rith Ravin, has completed almost 90 percent of construction since January of last year. “What remains to be done is to put the finishing touches on the park above the parking space, and we can finish everything by the end of July,” he said.

This first ever public underground parking lot will measure 8,704 square metres spanning two levels, and seven metres in height. It has the capacity for up to 310 cars and hundreds of motorbikes, with an entrance adjacent to Street 77.

“This parking space will provide convenience to the locals living and working in this area, who have always had difficulties parking,” Ravin added.

According to Ravin, there is sufficient lighting on every floor, coupled with a security camera system, proper parking markings, climbing stairs at two ends, and vehicle pathway that will be elevated at 10 degrees.

In the case of electrical blackouts, automatic LED lights will be activated, whereas flood preventions have been taken in the form of an automatic water absorption system. “All in all,” said Ravin, “the company has equipped the place with every prevention method against all sorts of risks – in short, it has optimum safety.”

Initially slated to cost $4 million, the project’s investment outlay has now clocked up to almost $7 million.

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While this OCIC initiative marks the first underground parking lot made available to the public, a second one is still under construction at Vattanac Capital, with a third one speculated to be built as a joint cooperative between City Hall and foreign companies.

City Hall spokesman Met Measpheakdey told Post Property that City Hall was currently cooperating on a study with a group of foreign experts for “a Malaysian company to build another underground public parking space under the park situated between Streets 106 and 108 near the Night Market”.

As for the traffic congestion problems along Phnom Penh inner city roads, Measpheakdey said: “Phnom Penh City Hall, together with a group of experts are currently trying to find possible routes in which we can establish crosswalks, underground pathways, and highways in many locations across the city; however, we can’t disclose any information since the matter is still under study."

With industrial complexes popping up in proximity to National Road 1, real estate commentators are witnessing a trend of higher demand and increasing prices for plots of land along the major road.

Chrek Soknim, CEO of Century 21 Mekong, told Post Property this week that, broadly speaking, prices for plots of land along National Road 1 were swelling.

“A lot of investors who have purchased plots aim to construct boreys and factories,” he said.

National Road 1 is located to the south of the ASEAN region, connecting Thailand, Vietnam and Cambodia.

Soknim said prices vary widely according to the specific location of the land in relation to the road, with prices from Monivong Bridge to Borey Peng Hout ranging from $850 to $1,500 per square metre, up from $600-$1,000 per square metre three years ago.

“These land plots will continue to gain momentum in the future as National Road 1 is the link between Southeast Asia and China’s One Belt, One Road,” he added.

Seng Sopheak, general manager at CPL Cambodia Properties, said that while land prices had been steadily rising along National Road 1 in recent years, he believes that investment will be hampered if prices skyrocketed too high adding that he hoped demand would steady.

However, Ear Sovannara, a resident in the capital’s Chbar Ampov district, said he had witnessed bulk land buying lately along areas nearby National Road 1.

“For instance, a few years ago, the price of my land in the Veal Sbov commune was only $50 to $70 per square metre at one point but it’s in the range of $250 to $300 now,” he said.

There are only a few months left for property owners to pay their 2017 taxes. Despite the law to pay the taxman being in place for more than five years, it seems some homeowners remain unaware of their financial obligation.

Kong Vibol, general-director of the General Department of Taxation (GDT), told Post Property this week that property tax on home ownership has been in place since 2011.

According to him, 90 percent of tax payers nationwide are aware of the obligation to declare property tax.

“The purpose of tax on property is to rationalise the use of land and to benefit the sub-national administrative budget which was decided by the government,” he said.

Despite the fine for not stumping up the tax being double that of the stipulated tax rate, Vibol said there was still about 10 percent of home and landowners who do not abide by the property tax requirements.

Property tax, which in this case refers to tax on land, houses and other buildings, is an annual obligation for owners of immovable property in Cambodia, applying to both owners of hard and soft titles.

Vibol said property tax is imposed on immovable properties located in all municipalities and provinces that are valued in excess of about one million riel, or $25,000. He explained that the tax collected annually stands at a rate of 0.1 percent of the value of the property.

However, agricultural land, land owned by the state and industrial facilities located in special economic zones are exempt from the tax.

Vibol encouraged all land and home owners to update their current information with the tax department prior to the online tax system process kicking in later this year.

Anthony Galliano, CEO of Cambodian Investment Management, said property tax was a fundamental tariff for the country, highlighting that the tax was beneficial for Cambodia’s national budget.

“Usually, the property tax is quite high, and it can be from three to five percent in most countries but I think the Cambodian government is tolerant and has made the tax low in the beginning to encourage people to pay,” he said.

“The property tax is pretty straightforward and not expensive. The law doesn’t discriminate between local and foreign property ownership in terms of property tax, both are treated the same.”

Galliano said the government was notifying property owners through a variety of media to enhance people’s awareness of the tax.

The distribution of direct letters from the taxation department was one way to inform property owners of their obligation to register and pay tax, Galliano noted.

For Sok Lak, he has to ensure the property taxes are paid for his parent’s house each year.

“My parents’ house has three floors in Tuol Svay Prey commune and I pay around $150 (per year).”

Lok said he didn’t have an issue with paying the tax, but suggested the documentation process for the payments was made easier, adding that the current process could perhaps be a deterrent for people paying the property tax.

According to the GDT, annual property taxes for all property owners are due to by paid by the end of September.

James Hodge | Associate Director | Professional and Office Services

CBRE Cambodia’s most recent Marketview provides insight into the movement of Phnom Penh’s property market. In this article we focus on the commercial sector to shed some light on recent developments within Phnom Penh’s dynamic retail and office markets.

The first quarter of 2017 saw a total of 17,000 square metres of new grade C office space added to the market, representing a 6 percent increase in the total space available in the market. Despite a fairly significant increase in total supply levels a significant amount of stock was absorbed, with occupancy levels reducing by only 0.2 percent over the quarter, down to 75.7 percent. The expansion of existing firms within their current office buildings, as well as relocations to larger properties contributed significantly to take-up levels.

Rents for office buildings were stable across all grades quarter-on-quarter, although they were in fact 0.7 percent lower than that recorded during the same period in 2016. This period of stability marks a change for the grade C and grade B sectors, with grade B’s growth period seemingly paused and grade C’s rent reduction path checked.

The office market remains robust with all grades seeing good levels of demand. Future supply is focused on the higher end of the market in the grade A and B segments and to some degree this suits the evolving nature of the sector where tenants are increasingly aware of providing their employees with higher levels of workplace satisfaction, an important element in retaining the best talent.

Meanwhile, the introduction of strata-title offices to the market represents a significant evolution on the horizon. Presently, there are 11 strata-title office projects representing approximately 150,000sqm of new supply under construction across the capital. 2018 is set to be a landmark year for strata-title projects, with more than 90,000sqm set to be completed. This is a new concept for the market and the multi-ownership profile presents a question mark about how management will be conducted and occupation achieved. Competition between different landlords within a single building may create opportunities as well as difficulties for tenants. A potential solution, especially in the instance where guaranteed rental yields have been offered to investors is for management and lettings to be co-ordinated by a central entity; however this may conflict with the aims of owner-occupiers.

The retail market is also set to evolve rapidly in the coming years, with supply forecast to double by the end of 2019. By the end of 2017 retail supply will have exceeded 255,000sqm, a growth rate of 22 percent on supply levels seen at the end of 2016. By the end of 2019, CBRE Cambodia predicts that supply in the retail sector is due to expand to over 580,000sqm. 2018 is to be a watershed year for new supply, particularly for shopping malls when the likes of AEON 2 are due to complete.

New supply is needed in the retail sector due to the relatively small amount of development that has taken place since AEON Mall opened in 2014, as a result of which retailers have struggled to locate suitable sites for expansion. Further modernisation and development within the retail sector will provide consumers with greater choice and breadth of experience, important factors for Cambodia’s growing middle-class.

Prime retail rents were also stable over the first quarter, although shopping malls did see a slight reduction of 0.9 percent compared with Q4, 2016, down to an average of $31.10 per sqm per month. Aging retail centres continue to be the primary source of rent reductions as they seek to compete with modern international grade space which presents a more attractive environment to both retailers and shoppers.

The most common stores within Phnom Penh’s shopping centres are from the fashion and accessories sector, which make up approximately 27 percent of stores, the food and beverage sector is second with 21 percent and entertainment third with 14 percent. The make-up of the city’s shopping centres reflects the preferences displayed by consumers, particularly those from the expanding middle class.

CBRE Cambodia regularly provides free market updates, to receive further information please contact cambodia@cbre.com.

Major Japanese companies are diving even deeper into Cambodia’s real estate and financial market, the latest being Sathapana Bank Plc investing an undisclosed amount into its new 22-storey headquarters in Phnom Penh’s unofficial Central Business District along Norodom Boulevard.

Sathapana board chairman Chang-Woo Han told Post Property the 22-storey building, which can house 1,200 workers and includes five underground levels, is slated for completion in 2019. He added that the project belongs to Maruhan Investment Cambodia, led by Sathapana’s parent company Maruhan Corporation of Japan.

Han, however, did not reveal the amount of capital that is being invested for the new headquarters.

“I am confident that Cambodia will continue to grow enormously in every sector in the future, especially the banking sector with strong support from the government and the National Bank of Cambodia. Now is the best opportunity to construct this building,” he said.

The building sits on a land plot of 2,113 square meters on the corner of Street 172 and Street 174 along the busy, corporate building-lined Norodom Boulevard.

According to Han, the new building will be equipped accordingly with the aim of enhancing the bank’s services to a larger scale for its customers, embodying a central point in shaping the company’s future strategies.

With 163 branches and more than 4,000 employees across Cambodia, Sathapana Bank was registered as possessing $120 million in capital and $929 million in assets as of December 31 last year, while its total credit loan and total deposits clocked in at $611 million and $583 million respectively.

Secretary of state of the Ministry of Land Management, Urban Planning and Construction, Pen Sophal, said he was looking forward to seeing the international standards applied by the Japanese company in constructing its new headquarters.

According to Kim Heang, president of the Cambodian Valuers and Estate Agents Association, the area where the building is to be erected once had an 8-storey limit. However, with news of Sathapana’s 22-storey building, the land price in the area would subsequently spike. Heang estimated the price per square metre in the mentioned area to range from $5,500 and $6,000.

Based on the land price estimates Heang gave, the 2,113 square metres of land designated for the new Sathapana building is worth up to $12.7 million.

“The price of the plots in this area will continue to rise, but at a low rate seeing that it is already expensive,” said Heang.

In Channy, president and group managing director of Acleda Bank, said the move to construct a new building of such massive scale was a reflection of Sathapana’s stability and confidence in the banking and real estate sectors. It could also be a way to earn more trust from both its existing and prospective customers. Channy said he was certain more Japanese investors would be coming to invest in Cambodia.

“If there were no competitors, everyone would forget; therefore, with creating new products, having competitors, having proper infrastructure and quality services to satisfy customers’ needs, then their services would be duly utilised.”

The international airport to be built in Koh Kong province will kick off construction in January next year, according to a spokesman from the State Secretariat of Civil Aviation (SSCA).

Backed by Chinese-owned firm Tianjin Union Development Group (UDG), the airport will primarily serve the company’s coastal project – the Dara Sakor Seashore Resort, to be built on part of the 45,000 hectares of land commissioned to UDG by the Cambodian government – and other affiliated developments.

SSCA spokesman Sinn Chanserey Vutha told Post Property via phone that the airport development would be constructed in three phases, with phase one commencing in January 2018 at a projected cost of between $300 and $350 million.

While groundwork for construction has already been laid, the construction will still be held off, with Vutha citing the rainy season as the only obstruction. “The construction of the airport is progressing at a slow pace due to it being the rainy season, but the company has taken this opportunity to perfect the airport’s designs.”

Koh Kong will see its very own international airport materialise in the Botum Sakor district over a land plot of 750 hectares.

Vutha said that the airport would be able to receive medium-sized airplanes once phase one was completed over the course of the next two and a half years. However, there is no specific timeframe for phases two and three, as Vutha stated it would depend on how well the airport functioned after phase one’s completion.

The entire project, he said, is forecast to have a total investment of more than $500 million.

Because of the enormity of the entire UDG tourism project, which carries a projected price tag of $3.8 billion, the Ministry of Environment (MOE) has been tasked to oversee the airport’s environment impact studies. Nevertheless, head of the department of Environmental Impact Assessment at the MOE, Danh Serey, noted that the ministry has yet to receive reports from the environmental impact assessment company that UDG hired.

Meanwhile, Ministry of Land Management, Urban Planning, and Construction spokesman Seng Lot said he was not privy to any information on the Koh Kong airport project, telling Post Property to contact the province’s governor.

However, Koh Kong is currently without a governor, with the new governor set to make a public appearance later this week.

Ho Vandy, advisor to the Cambodia Chamber of Commerce, pointed out the massive scale of not only the airport project, but the districts that have been commissioned to UDG. The 45,000 hectares of land encompass two districts – Botum Sakor and Thmor Bang. “This is a major investment for China,” he said.

He continued, “This is an incredibly costly investment, but this investment will help encourage air transportation to be more open.”

“This area is a connecting route between Trat province and Chan Boree province of Thailand, and Koh Kong province, which provides a great transportation route and helps make the commercial relationship between the two better.”

The government’s hopes of turning Sihanoukville into a major industrial hub have experts touting the coastal town’s strong economic potential, with commentators agreeing that the province has a range of diversified opportunities for growth.

Ho Vandy, advisor to the Cambodia Chamber of Commerce, told Post Property this week that he expected Sihanoukville to rival Siem Reap within the next five to 10 years as the province continued its growth in tourist numbers, infrastructure development and foreign investment.

“I think that if we talk about the scale of the economy and government revenue, Sihanoukville can earn more than Siem Reap, but the amount of tourists cannot be compared with Siem Reap’s,” Vandy said.

“Sihanoukville has diversified economic prospects while Siem Reap relies heavily on tourism,” he added.

Chrek Soknim, Chief Executive Officer of Century 21 Mekong, agreed that Sihanoukville had strong potential for economic growth in the future when compared with Siem Reap.

“Without tourists, Siem Reap would face serious issues since commercial trade in Siem Reap depends on tourism. Sihanoukville has high economic potential which will sustain the province in terms of long-term growth,” he said.

In line with the government’s aim to develop Sihanoukville into an industrial hub, the province’s Special Economic Zone currently houses more than 100 Chinese companies while the Sihanoukville Autonomous Port is set for a massive $300 million expansion.

At the same time, Sihanoukville’s international airport is getting busier, with more airlines announcing direct flights from the coastal town.

State Secretariat of Civil Aviation (SSCA) spokesman Sin Chanserey Vutha said Sihanoukville’s airport is welcoming more passengers every year.

“We are expecting an increase in tourism arrivals, estimated to be around 1 million next year, whereas we only had about 600,000 last year,” he said.

Cheng Kheng, head of Hutton CPL’s advisory board said Sihanoukville and Siem Reap were vastly different, with each province having their own unique attractions. However, Kheng said Sihanoukville was developing at a faster pace as a result of the flurry of investment activity.

Sok Siphana, a government advisor and principal attorney of Sok Siphana & Associates, said Sihanoukville displayed much promise on the economic front.

“We cannot compare Siem Reap and Sihanoukville as they are like a banana and a watermelon but I think in less than ten years, Sihanoukville will become the second economic pole following Phnom Penh,” he said.

Phnom Penh’s public transportation sector is set for a boost with the arrival of 100 buses from China, with additional bus routes expected to be added to accommodate the rollout of the bus fleet.

City Hall spokesman Met Measpheakdey said five additional bus routes will be created in Phnom Penh in early July with the new lines covering some of the major roads, such as Street 271.

“The 100 public buses will be rolled out to expand on the old lines,” he added.

All 100 buses, which arrived at Sihanoukville’s port earlier this week, are completely new and will be able to hold 50 passengers per bus. The first 20 buses will arrive in Phnom Penh at the end of the week.

According to Measpheakdey, the buses were donated by China to help Phnom Penh reduce car traffic while also improving access to public transport. He said he was unaware of the total value of the bus donation.

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“An efficient public transportation service is very important for a city with an increasing population such as Phnom Penh,” Measpheakdey said.

On average, Measpheakdey said 6,000-7,000 people utilise the city’s bus services. Fifty-seven buses cover three routes at present. However, with an additional 100 buses set to hit Phnom Penh in just a matter of days, Measpheakdey expects this figure to double in time.

It currently costs 1,500 riel to catch the bus, but public transport is free for students, people with disabilities, monks and the elderly. Measpheakdey assured that ticket prices would remain unchanged as the new buses are rolled out.

While public transportation is expanding in Phnom Penh, Measpheakdey acknowledged that City Hall still needed to tackle other pressing issues, such as creating more parking lots and footpaths.

Institute for Road Safety director Ear Chariya applauded the move to expand the city’s public transport service.

“Public transport helps make the city more beautiful, better protects the environment and helps people who don’t want to spend too much on transportation,” he said.

However, Chariya said Phnom Penh still faced challenges with its public transport system such as delays in bus arrivals.

“City Hall and relevant institutions should address the constraints. I think the number of additional buses should be on busy streets with high traffic. For instance they should pass by markets or schools,” he added.

French language teacher and frequent bus user Srin Manith welcomed the news of more buses being added to the city’s current fleet.

In addition to reducing delays, Manith said the bus system could be improved by ensuring all bus drivers comply with traffic laws.

“I used to travel frequently from home in the Central Market to schools along Russian Bolevard,” said Manith. “The bus was in good condition despite a slight delay.”

A residential, office and retail project will emerge in Toul Kork in coming years, adding more supply to a real estate market which is already facing lacklustre demand.

Development of this joint venture between Parkway Group and Natong City Daxin Engineering is expected to cost $100 million, according to Parkway project manager Sour Soktheng.

With the groundbreaking process having already taken place, the construction team is beginning to build a two-storey underground parking space which is set to be complete at the end of the year, Soktheng added.

The project will be built on one-hectare of land and will comprise condos, malls, office space and an entertainment centre. Soktheng said the Parkway development would be undertaken in a phased approach over the next three to four years.

“In our first stage, we will build about 200 to 300 units and a shopping mall,” Soktheng said.

“Each unit at Parkway will sit from 45 square metres up to 200 square metres, and our target customers will be those with average and high-incomes.”

“Our target customers are primarily the locals but also the foreigners,” he added.

The project is being spruiked as a multi-community hub in Toul Kork, “consisting of three large buildings, where the first one will be 35 storeys, the second one will be 28 storeys and the third is 26 storeys.”

Soktheng dismissed concerns over Phnom Penh’s already oversupplied residential market, believing Parkway would receive strong demand because the target market is the growing middle class.

Kim Heang, president of Cambodia Valuers and Estate Agents (CVEA), said the project would be successful if the investors had enough financial backing.

“Those that try and sell units to get money to continue and finish their projects will face issues,” he said.

Heang said Toul Kork was an attractive destination for real estate development as it has a growing young population.

“However, since Toul Kork is a C-grade area, project owners should target customers who have an average income.”

Well-connected Lim Chhiv Ho has a reputation for being a savvy businesswoman. Starting the trading and distribution company Attwood Import & Export in 1994, the business has since expanded into property and infrastructure development. Lim has also had success in the creation of the Phnom Penh Special Economic Zone (SEZ) in the outskirts of the city. Lim, who is in the midst of developing another SEZ in Poipet, spoke to Post Property about her business ventures and upcoming investment plans.

What new developments are you looking to invest in?
Apart from the SEZ that helps the growth of the nation, we have also been planning to invest in real estate in provinces and in Phnom Penh in the near future. This project will cost $130 million and will consist of condominiums and a shopping mall. The project is a joint venture with foreign investors. I can’t go into details about this project yet because my company is listed on the stock exchange. As soon as the project kicks off, I will announce it.

From a demand perspective, the condo market seems to be slowing down. Why are you interested in starting a new condo development?
I don’t think it is getting any slower. If we pick the right partners to develop condos and residential housing, we will still be able to sell them. I think property demand is still increasing, but having the right partners is important.

How do you see Cambodia’s real estate market playing out over the next 10 years?
I think the real estate industry will continue to grow, albeit there are several oknhas who are concerned and are investing their money in foreign countries instead due to next year’s elections. However, as a local investor, I still trust that there is peace and stability in this country. I have recently met with a handful of Chinese companies who are seeking the opportunity to invest in Cambodia, underpinning my confidence in Cambodia’s continual growth. There are also tens of thousands of Japanese companies entering.

How did the Phnom Penh SEZ come about?
The Phnom Penh SEZ started in 2006 on a huge plot of land measuring 357 hectares. I purchased the land from a Malaysian investor. My first purpose was to build residential houses, but after attending a press conference with the Cambodian government overseas, I found out that that an economic zone is a valuable contribution to the economy and would give jobs to our people. This is why I decided to establish the zone. There are currently 85 investors, and over half of them are Japanese. Before they decided to invest here, I asked the Japanese investors why they were not coming to invest in Cambodia when their country has helped Cambodia build roads, bridges and other infrastructure. They said that Cambodia is still corrupt. I then told them about the establishment of the SEZ which gave them confidence to invest here.

You have another SEZ in Poipet. Has it started operations yet?
We’re currently building infrastructure in Poipet to internationalise the zone. Sitting on 64 hectares of land, the new SEZ will start operating at the end of this year. What motivated us to invest in the area is because we can use the international port in Thailand, making transportation very convenient in terms of cost. Secondly, factories in Thailand are huge, and there is the possibility of them expanding their branches to the Cambodian-Thai borders with the ease of transportation.

This interview has been edited for length and clarity.

A new business centre set to open in Phnom Penh will mainly cater to small businesses, in line with the growing trend of startups emerging in the Kingdom.

Kim Hour, chief executive officer of the Diamond Palace Group which is behind the Diamond Palace XO centre, told Post Property the creation of the precinct would help give young people the opportunity to start their business aspirations without having to fork out exorbitant rental fees.

“My marketing strategy in the construction of this business centre is to give business startups a place to do business at a reasonable price,” he said.

Hour said he had observed the growing trend of young people starting their own business ventures but noted entrepreneurs often ran into difficulty when it came to finding an affordable space to operate.

While Hour did not reveal the rental fees for the two-storey building, he noted that they were “very reasonable”.

Hour said the shopping and business precinct would have a mix of products for sale, including clothing and technology products.

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New to the startup scene, Lay Monika, who is in the process of opening a café and dessert shop in the business centre said the building’s parking lot, 24-hour security and modern amenities enticed her to set up her shop there.

Monika also said the location of the centre on Street 163 in Boeung Keng Kang (BKK) 3 was ideal because of its proximity to the popular BKK1 area.

Hour, who is also involved in business ventures spanning hotels and resorts, said he is confident Diamond Palace XO will be a success with 80 percent of tenant space currently filled.

Diamond Palace XO is scheduled to be fully operational in August, however, some stores have already opened the doors for customers.

The wondrous city of Siem Reap that attracts millions of visitors to its sprawling megalithic grounds full of temples and of the world-famous Angkor Wat has no problem attracting tourists. This, however, does not necessarily translate to the maintenance practiced in the city.

According to Siem Reap deputy provincial governor Ly Samreth, there are 500 main roads in the city – excluding the thousands of smaller roads outside the city – but around three hundred of these roads are in desperate need of repair.

“Our provincial administration has a master plan to develop and maintain key areas such as social, cultural, security, and so on every five years, and we always plan to invest in the national budget on infrastructure each year,” Samreth said.

“Every year, we have a lot of development work that can respond to people’s requests, and we have a budget of around $10 million annually in the development of the entire provincial administration, but we all plan to contribute to different sectors due to our limited budget,” Samreth told Post Property.

While Angkor Wat and its other, smaller, temples continue raking in the money from nonstop tourism, with the Angkor Enterprise recently revealing that ticket sales for the Angkor Wat Archaeological Park generated $52.2 million during the first six months of the year, the revenue is seemingly not spilling over to the essential aspects of improving the city, with Samreth admitting that many roads in Siem Reap are in need of upgrading.

“Some people won’t see the wider development because they notice only that roads and infrastructure within the [Siem Reap] city are unrepaired and in dire state,” he said.

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According to Samreth, not all funds received from the Angkor Wat Archaeological Park get re-invested back into Siem Reap province, with a lot of the funds being directed into government coffers and, from there, distributed around Cambodia to meet broader infrastructure, education and health needs.

“If Siem Reap province took all the money, how would the provinces without tourist sites survive?” he said, jokingly adding that “if Siem Reap got all the money, Siem Reap will become a city like New York in the next five years.”

Sorn Seap, CEO and founder of Key Real Estate, told Post Property that while Siem Reap’s real estate situation is healthy in the city, the case isn’t so across the province. Only Siem Reap city is able to foster successful businesses, and the livelihoods of the province’s people in other communes in Siem Reap are incomparable to those living in Battambang or Kampong Cham.

Because the Apsara Authority in Siem Reap has cut off new infrastructure projects from being built on existing state land, these potential developments will instead shift focus to Angkor Kyung Yu – where the province’s new airport is set to be built.

Seap admitted that there were some shortcomings in Siem Reap’s outskirts, where visitors are afraid to travel due to inadequate roads, and problematic sewage and water systems. “Today, people who come to visit Siem Reap are largely tourists, so the provincial management must have good accommodation, good food, good public service and good infrastructure across the whole province to serve the tourists,” he added.

A Siem Reap resident, Sok San, told Post Property: “The development of the infrastructure is not so different since I came here in 1995; not updated. From then to now, in some areas the roads are still the same.”

Despite some construction and project maintenance of a few old roads and bridges, San added that the maintaining of public infrastructure always takes a long time to complete, especially in the city.

While walking towards Angkor Wat, a French tourist told Post Property that this was his second visit after his first visit in 2013. The unsurpassable majestic ambience of the temple had been what drew him back a second time, but even he expressed surprise at the $37 charge on the entrance fee. Before its last price hike, tickets to enter the renowned temple were already priced quite heftily at $20.

However, he said he was more than ready to pay up if it was proven that the money was flowing back into public maintenance and development.

“I like Siem Reap because it is full of wonderful things, but I have noticed that there is less maintenance of things, and public services, such as some of the roads which are in dire straits,” he said.

“I hope the city will be better when I come back again in the future,” said the Frenchman.

Located on Street 105, Skytree Condominium developed by J&L Property Development is an exclusive mixed land-use project that boasts a helipad, stylish interior design, quality and fireproof construction materials, and high-end technology. Chen Wu, the chief executive officer of J&L Property Development speaks about updates on the development as well as its unique qualities.

What are some new updates on J&L Property Development’s Skytree project?

In April, a group of senior staff from the banking sector in Taipei, Taiwan came to Cambodia to see how J&L founder Simon Wu’s family property business was progressing here. They were happy with what they saw. Subsequently, six banks from Taipei agreed to sign an agreement to support J&L with a US$35 million joint venture (JV) loan to complete the development of this project.

This is a massive JV loan for J&L Property that will go into finishing this building. J&L Property will stand out as the first Cambodian property developer to secure a JV loan in Cambodia. This huge complex in Cambodia, supported by the JV loan from six consortium banks from Taipei, will provide thousands of residential, hotel and business centre units of upmost quality to everyone in the Kingdom.

How will J&L Property Development make use of this US$35 million loan?

With the backing of this US$35 million loan, it ensures that we will be able to complete our Skytree project in early 2019. Tenants can expect to collect their keys during that period as well.

How does J&L Property Development set apart its Skytree project from what is currently offered in the property market?

The design of our 32-storey three-building complex has been inspired by Singaporean architecture. The Singaporean architects who worked on this project are meticulous, and attention is even paid to minute details.

International company Cana Sino Construction Corporation (CSCC) is in charge of the construction. All steps of their construction process undergo inspection by a group of international quality control specialists with high-technology equipment. For instance, we are the leading developer in Cambodia who is using such modern and high-technology equipment in the testing of concrete and the testing of radiation from the metals used.

This technology has also enabled us to achieve consistent quality in our construction process, and ensures that the building is very safe from any health hazards. The main doors of all our units are made of fireproof materials while our double-layer glass windows are both windproof and help to minimise noise interferences and odours from the external environment.

As for parking, the area is large, with more than 700 car park spaces. We even have space for gardens.

What is unique about Skytree Condominium?

While most buildings feature rooftop facilities such as gardens, skybars and swimming pools, Skytree will present the very first rooftop helipad in Phnom Penh. The founder’s philosophy is that he will always look ahead and make preparations. The helipad is not only for the convenience of the residents, but he hopes to serve the public because he believes that in the future, his neighbors or the guests staying in Skytree will be able to use it to fly from their home units easily.

The building also employs special technology and high material specifications from Taipei, Japan and other developed countries in the world to protect the building from natural hazards such as earthquakes, monsoons, and very strong typhoons. Such technology is similar to that used by Taiwan Tower and the tallest building in Dubai. J&L is the first to bring such technology into Cambodia, by using it in the development of Skytree.

With the saturation in the property market, what is J&L Property Development doing to promote their units?

We are not like others. J&L emphasizes on the excellence of our units as well as the quality living experience for our tenants. The building will stay on for over hundreds of years. Our founder and his family will live here together and they love Cambodia so much that they would love to have more Cambodian neighbors.

After a quiet start to 2017, Cambodia’s borey market looks to have rebounded post-election, with borey developers witnessing an increase in purchasing activity as confidence in the market once again stabilises.

Tep Kanitha, head of the sales department for Borey Peng Huoth along National Road 1, told Post Property that sales of its residential houses in recent months had increased markedly with Peng Huoth exceeding initial sales targets.

The strong demand has prompted the developer to invest in another three major residential projects consisting of 3,000 houses with prices set to start from $180,000.

“Confidence in our buyers and the sufficiency of our capital to build the project are a big part of our success thus far,” Kanitha said.

Nget Piseth, assistant to the CEO of Borey Piphup Thmey, didn’t elaborate on specific details but noted that one of Peng Huoth’s three new borey projects would be located along National Road 2.

Separately, Borey Rith general manager Sour Soufang said sales in his borey development, which is located along Street 598 in the Russey Keo district, had risen compared to this time last year. However, Soufang couldn’t reveal any hard figures on the increasing sales.

This compares to earlier this year when he told Post Property that borey sales were off to a sluggish start for 2017, admitting that investors and buyers in general were waiting around to see what the overall situation would be following the commune elections.

According to Chrek Soknim, CEO of Century 21 Mekong, which specialises in the selling and purchasing activity of boreys, investors had regained their confidence in the market following last month’s commune election.

Soknim added that the borey market was undergoing incredible growth, as boreys continue proving a popular dwelling choice among the locals.

“The income of the people is increasing and the fear from the elections has faded so conditions are improving for the borey market,” he said.

Another real estate insider, Pen Sokkea, head of the evaluation department at Bonna Realty Group, also believed that the borey market was getting back on its feet after a slow start to the year.

“There is healthy demand from buyers. Also, getting a loan from banks and microfinance institutions has become more convenient,” he added.

The new generation of Phnom Penh residents is likely to prefer condo, inner-city living over the more traditional dwellings, with real estate experts identifying the city’s population growth and rising income levels as factors in a change of lifestyle preference for the millennials of Cambodia.

According to Ngoun Chhayleang, CEO of Ratanaka Realty, as incomes grow, young people will change course to adapt to a more modern standard of living, with condos being the desirable dwelling choice.

“I think the new generation will choose to live in condos where they can stay close to their workplace,” he said, adding, “The youths will decide to live in the city, and the condo investors targeting this group of customers will benefit from that.”

According to a recent study by property developer Urban Living Solutions, the number of residents in Phnom Penh will hit four million by 2030, with Chhayleang noting that the trend of living in condos would be a norm by then.

Along with the city’s growing population, real estate experts are also pinpointing the implications of the urban boom that is taking hold.

“With the population at four million in 2030, they will definitely face more traffic jam issues and environmental pollution, and technology will partake in resolving these issues,” Va Vireak, CEO of Century 21 Fortuna Investment, said.

He added that more people will move from the outskirts to the heart of the city, believing that a majority of the next generation would opt to live in condos for the convenience and lifestyle that it offers.

“The youths, especially those who are sent to study overseas, will choose to live in condos back here because they are close to cafe shops, shopping malls, gymnasiums and their workplaces,” Vireak said.

According to a 2016 study by the Ministry of Land Management, Urban Planning and Construction regarding the city development framework in Cambodia, it was found that the number of residents living in Cambodia’s biggest cities by the end of 2014 was 4.5 million – equivalent to 27.1 percent of the entire population – and will continue marking up to 7.9 million people by 2030, equivalent to 44 percent of the whole Cambodian population.

Economist Mey Kalyan, also a senior advisor to the National Economic Council, said the more developed a country is, the more people will live in its capital city; when the city expands, more infrastructure is inevitably compulsory.

“When the city grows bigger, the quality of life will start to fade,” he said.

According to Kalyan, even if the government is unable to prepare for an influx of people, it should at least focus more of its resources on legal solutions to resolve traffic issues, and invest deeper into infrastructure and public services.

The rise of borey developments in Phnom Penh is being met with a relatively healthy demand response, but the market dynamics are proving more mixed for borey projects in Siem Reap.

As the capital of Cambodia, Phnom Penh is inhabited by more than 1.5 million people who live and work in the city. With a rising middle class, boreys, in addition to condominiums, are emerging as a popular choice of residences for those wishing to call Phnom Penh home for the long-term.

While the demand response to boreys in Phnom Penh over recent years has been increasing, there are mixed signals from customers in Siem Reap for this type of dwelling.

Khek Linith, owner of hotel and borey development firm Khek Leang Co., Ltd, began development of borey project Somadevi Angkor on two hectares of land in Siem Reap in 2016, with plans to build 100 individual homes.

Despite only selling 30 percent of homes in the complex to local investors to date, Linith said construction was progressing.

“Our capital to build is limited, but we are continuing to construct the boreys which cost from $95,000 to $130,000,” she added.

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Linith put the subdued sales of the borey down to Cambodia’s recent election, believing that people did not like to spend money on real estate in the lead up to, and during an election.

“Also, the people of Siem Reap are not as quick to invest because the borey market is still quite new here while there are also almost no condo buildings either,” she added.

According to Linith, many of the current borey buyers in Siem Reap come from outside of Siem Reap province, such as from Battambang and Kampong Cham.

Sorn Seap, the CEO of Key Real Estate, told Post Property that investors and developers should do market research before developing a project to understand the extent, or lack of, demand.

“At the moment, demand is less than supply in the market, which makes it good for the customer,” he said.

Contrary to Linith’s experience, Seap said that some boreys in Siem Reap had been very successful, with some projects selling out.

“I think the borey is aesthetically better than a house and there is the added benefit of security so it is a good option to live in a borey for those who can afford it,” he said.

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Seap believes a possible reason for the recent lacklustre buyer response to boreys in Siem Reap could be due to the increase of borey developments in the province, thus supply was simply trumping demand. He noted that about five to 10 years ago, in the outskirts of Siem Reap city, there was only one borey project named Siang Nam, but this number has now expanded to at least six.

While Seap admitted that boreys in Siem Reap were not yet a trend like they currently are in Phnom Penh, he believes there is strong potential for the borey market in Siem Reap to grow in coming years.

Sok Ly, a Siem Reap resident, expressed an interest in living in a borey but said that the price was not affordable.

“I want to live in a borey, but I do not have the capacity to purchase a house in a borey complex,” he said. According to Ly, many people in Siem Reap are accustomed to living in a smaller family house with relatives as this is the traditional way to live.

Works on an expressway aimed at decreasing the time it takes to drive from Phnom Penh to Sihanoukville could start towards the end of 2017, subject to matters around financing being ironed out.

Va Simsorya, spokesman for the Ministry of Public Works and Transport, told Post Property the government was close to giving the project a tick of approval.

“The government would like to kick off the new expressway by the end of 2017,” he said.

“The studies on the road’s impact and budget have already been completed. What is left is the contract between the government and the company (investor),” he added.

Simsorya, however, refused to shed details on the company invoved in the expressway, only saying that it was a private Chinese company.

Simsorya could not reveal the exact cost of the project but believed the cost would be above $1.5 billion. Simsorya said it was highly likely that when completed, the expressway would include a toll fee like other major highways around the world.

“Every car using this road will have to pay,” he said.

In terms of the logistics, the spokesman said the expressway would extend 190 kilometres and would connect from Phnom Penh in the Kov Srov area extending along Natioanal Road 4. The expressway would move towards Kampong Speu province before ending in the seaside town of Sihanoukville.

Lim Sidanin, Secretary of State at the Ministry of Public Works and Transport of Cambodia, only gave a short remark on the upcoming expressway, stating the project was now in the hands of the Ministry of Economics and Finance awaiting approval.

Sun Chanthol, Minister of the Ministry of Public Works and Transport, recently told local media that the Phnom Penh-Sihanoukville expressway would comprise four lines and would prohibit motorcycles from using the road.

WorldBridge chairman Sear Rithy is taking a glass half-full approach to Phnom Penh’s booming yet equally risky property market, with the oknha revealing details of a new luxury villa project that will be built along National Road 1.

Rithy told Post Property earlier this week that the project will kick off construction concurrently with the sales process at the end of this month.

The project, located on 3.6 hectares of land along National Road 1 in the Chbar Ampov district, is tipped to consist of more than 200 houses with prices starting from $300,000.

Called The Palm, the project is a joint venture between WorldBridge and Singapore’s Oxley Holdings.

The Palm marks the third project being developed by the venture, following the success of The Bridge and The Peak developments.

Rithy said the vision for The Palm was a unique one, with the dwellings resembling resort-like houses. The complex, set to cost $30 million, will include an artificial beach, Rithy said.

“This project is based on a vision for a unique development and it is different from the others,” he added.

Rithy said he was not concerned about building a residential development in an already heavily supplied market, stating that the favourable location of the project would give it an upper edge.

“Sitting along National Road 1 is a very favourable territory for living after the construction of this road is finished,” Rithy said.

A spokesman for Oxley Holdings did not respond to additional questions regarding the project from before publication.

Chrek Soknim, CEO of Century 21 Mekong, said areas along National Road 1 were emerging as popular zones for residential living, citing Borey Peng Hout as one dwelling that was attracting wealthy citizens.

“The market for residential houses is now back on its feet,” Soknim said.

Housing Development Association of Cambodia president Ly Hour agreed that areas along National Road 1 were well primed for residential development.

He added: “The sales of houses is getting better now as customers are no longer concerned with the election and this is a good thing for everyone.”

By James Hodge | Associate Director | Professional and Office Services

Anyone who has considered renting an office, or who has even just considered the market for business space will most likely have come across the grading system used by agents to signal a building’s quality, but how do agents decide what grade is appropriate?

No universal grading system exists and, as such, the specific definition of what makes a Grade A, B, C or C- building will vary from market to market and in some cases even from agent to agent. However, broadly there is a common theme running through the definition of office grades at an international level which allows multi-national companies to more easily benchmark their requirements and target specific sectors of the market.

CBRE Cambodia has constructed our own definition of office grades tailored to the Cambodian market but reflective of international standards; this helps bring clarity and certainty to the definitions for our agents, partners and clients.

Broadly a Grade A office is defined as being a flagship building able to compete for premier occupiers and commanding market leading rents as a result. The building will have high quality finishes throughout, incorporate state of the art building management and health and safety features, provide excellent accessibility and have a notable market impact. Location is an important factor for a Grade A office; they will usually be found in the core of the Central Business District (CBD) where the highest rents can be commanded, and where market leading tenants prefer to be located.

More technically, the definition describes a Grade A office’s likely specification as including minimum 2.7 metre floor to ceiling heights, raised floors, suspended ceilings, 24/7 security, centralised air conditioning and full, international standard, centralised fire protection and detection systems. The property will be purpose built and to a high standard of design. Floor-plates are usually in excess of 1,000 square metres with minimal intrusions and a bright, open design. Property management will be market leading in a Grade A building, either provided in-house by a group of experts or handled by an internationally recognised management agent with the experience and resources to ensure tenants receive top end service.

Grade A offices largely attract professional companies especially those from the financial sector, many of whom will be of an international origin and therefore used to occupying space of the specification and quality that Grade A denotes. Often, although a company bases their country headquarters in a Grade A building,they might target lower grade space for functions which are not client facing, or which require large volumes of space which should be obtained at a cheaper rate.

Grade B offices are more functional in their design, targeting and specification; yet are able to command average or slightly above average rents and with smaller floor-plates, reduced ceiling heights and less security. CBRE defines Grade B buildings as presenting a professional image, typically purpose built and benefiting from air-conditioning and minimum 2.5 metre floor to ceiling heights. Grade B offices are more mass market in their appeal and can be located both within and outside the CBD.

Grade C and below are less formal in their arrangement and cover a broad range of specifications, locations and levels of design. What they have in common is the provision of functions and economical space, usually at rents below the market average.

Building safety systems and management can be of mixed quality and the space is not necessarily located within a purpose built office premises. Again floor plates can vary in size but are generally small, sometimes with restrictive structures such as columns or supporting walls dividing the space. Specifications also vary but ceiling heights are typically limited, any air-conditioning is likely to be on a split system basis and security could be lacking.

In practice, an experienced office agent can determine the grade of an office building quickly and accurately using their market knowledge to place the property in its appropriate market segment. Of course, the grades are in themselves a spectrum, with individual buildings finding their own market positioning as a natural consequence of being exposed to the scrutiny of prospective tenants. Agents like CBRE Cambodia present a building’s grade as a signpost to help tenants and occupiers quickly gauge whether a building might be suited to their requirements.

The Overseas Cambodia Investment Corporation (OCIC) will stump up $7 million for a temporary iron bridge across the Tonle Sap river amid renovations to the Cambodia-Japan Friendship Bridge.

Touch Samnang, deputy director of OCIC, told Post Property that the construction of the temporary bridge will begin soon and will connect from the Sokimex Gas Station Area on National Road 5 to the planned Chroy Changvar Satellite City in a bid to ease congestion for commuters during the period of renovation works.

“I think the construction of this bridge will take about seven months, and once done, the bridge will be kept until another huge bridge connecting to Chroy Changvar Satellite city is completed,” Samnang stated.

While Samnang could not pinpoint an exact start date for construction, City Hall spokesman Met Measpheakdey assured construction would start in August, adding that the bridge would extend 700 to 800 metres in length.

The temporary iron bridge will be in place during renovation works of the Cambodia-Japan Friendship Bridge, with the temporary bridge to be replaced later by a larger, permanent bridge, Measpheakdey said.

One side of the old bridge will be closed for two years of renovations, and the temporary bridge is expected to be finished in six to seven months, he said.

Va Simsorya, spokesman for Ministry of Public Works and Transport, estimated renovation works on the Cambodia-Japan Friendship Bridge to cost up to $30 million.