CBRE recently released the “Green Netting Report”—a detailed overview of the construction and investment trends happening across Phnom Penh. B2B Cambodia caught up with Simon Griffiths, Associate Director at CBRE Cambodia, to get his impressions on the report and its ramifications for investors interested in buying, building or leasing in Phnom Penh.
According to the CBRE report, there are currently 49 buildings under construction in central Phnom Penh above eight floors within a one and a half kilometre radius of the CBD (this does not include outlying areas of Phnom Penh). The majority of the buildings under construction range between eight to twelve storeys, with a footprint (land size) of less than 1,000 square-metres. This is quite small in terms of built floor area, notes Griffiths, but demonstrates the increasing demand for space within central Phnom Penh that is naturally pushing the city upwards.
The majority of these developments are intended to become apartments with varying levels of quality and servicing. They will provide mid-range accommodation within central areas that may appeal to both local and foreign occupiers. The apartments under construction shall contribute a total of around 1,000 units across the survey area.
Local developers are behind the majority of low- to mid-level developments in terms of scale and quality apartment developments, says Griffiths, and they are generally targeting locals. These developments typically have fewer services and facilities due to their smaller scale, with rents averaging $350 to $400 a month per unit in the central areas. This shows that while international developers compete to fill the high-end of the market, savvy local developers are building to fill the gaps and needs of the local market.
“Meanwhile,” says Griffiths, “many large scale developments are underway, with these grand developments set to change the skyline of the city in a much more dramatic and impressive fashion.” Developments set to be completed during the next few years include the Olympia Development, Embassy Residence, Platinum Bay, Casa Meridian, Diamond Mansion and Times Square, to name a few. Many of the larger condominium developments have yet to come out of the ground but are already making headlines as a result of their bigger marketing budgets and grand designs.
Quality is in demand, says Griffith, when it comes to condo buying. “When new developments are being launched, many are promising quality, but the delivery of this quality is critical. It must be on time and to specification. Investors and tenants will vote with their feet and this is still a small town, which means reputation and word of mouth go a long way.” Facilities and amenities rivalling developed nations are becoming increasingly available in Cambodia and increasingly affordable, meaning it is an exciting time to be a home or business real estate buyer, says Griffiths.
Because of this ongoing development, Griffiths says, “By 2018, the skyline in Phnom Penh will no longer be dominated by office buildings; Condo buildings will have pride of place in the skyline of Phnom Penh with iconic designs and architecture, set amid the heritage of the city.”
Griffiths states that the “Green Netting Report” demonstrates that much of the construction underway in central Phnom Penh is segmented to deliver a varying range of quality and service offerings to both local and foreigners. Griffiths adds that “Phnom Penh is growing up fast; change brings with it challenges and real estate professionals need to be aware of the ever-changing real estate landscape so that developers and investors have up-to-date advice to keep pace with the rapidly changing real estate environment and ever-modernising city.”