PHNOM PENH (Khmer Times) – The condo business in Phnom Penh is experiencing a boom. With like more and more high-rise apartment buildings taking over the city, it is hard to picture Phnom Penh without some kind of towering construction in view.
Brandon Sun Director of Sales and Marketing at Nuri D&C Co., says the demand for condos in Phnom Penh is anticipated to increase and will meet the supply in 2014. This year alone DeCastle will complete three new condo projects, which Mr Sun says will satisfy demand from investors in the short-term.
Mr Sun says occupancy rates for high quality serviced apartment buildings remain high and range between 75 and 100 percent in established buildings. Demand is particularly strong in expatriate areas such as Boeung Keng Kang 1.
For Nuri D&C Co. investment is local and 30 percent is foreign. At OCIC – the company behind developments such as The Rose Condominium, Diamond Island, Tokyo Inn and Olympia City – foreign investment draws interest from countries such as China, Hong Kong and Japan.
Double-digit rates of return on condo apartments can make purchase attractive for investors. Senior Manager at CB Richard Ellis (CBRE), Simon Griffiths, says an annual return for a condo apartment sits between eight and 12 percent, depending on the development in today’s market. On top of good return rates, condo apartments are relatively cost effective. Developers buy one piece of land and expand upwards to create many living spaces compared to building just one single house.
Deputy Director of OCIC, Touch Samnang, says government laws banning foreigners from purchasing land is a contributing factor to increasing condo investments. The law states, foreigners cannot purchase ground floor apartments or single houses, but may buy apartments from the second floor up. Mr Samnang said foreigners can afford to buy apartments, so if they choose to stay in Cambodia for a long period of time. Then they sell it when they leave to make a profit.
Phnom Penh’s hectic roads are in central Phnom Penh a factor towards the popularity of condos
Author: Louisa Wright
Photo Credit: Khmer Times