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Property & Accommodation

Phnom Penh’s skyline is constantly evolving as new developments change the face of the capital. New business and residential projects are bringing with them a high-end offering, setting the pace for future developments.

We take a look at the new commercial and residential developments that are springing up across the capital as well as find out the best way to find the perfect place to live or premises for your business. With property laws now meaning foreigners can snap up certain premises above the first floor, foreign investment in this arena is also growing.

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  • The retail market is expanding rapidly as big developments open up in the near future. International operators such as Aeon Mall are extending their current success with Aeon Mall 2 at Toul Kork while other newcomers such as Lion Mall and Parkson are showing their commitment.
  • Besides the shopping malls, there is further contribution to the retail front with upcoming mixed use developments such as The Bridge, Olympia City and mixed use commercial towers suchas Vattanac Capital Tower and Exchange Square.
  • GT Tower will become the fourth largest office tower in Cambodia. Emerald Building, comprising 3,500 square metres of NLA on the market, is also due to be completed at the end of this year.
  • The next Prime Grade office tower will be Exchange Square, slated for completion in the first quarter of 2017, encompassing 18,500 square metres of NLA.
  • Also luxury condominiums have taken off in Cambodia with DeCastle Royal leading the way.
  • This is due to laws changing that now allow foreign investors to purchase apartments above the first floor.
  • The completion of Parkson Phnom Penh City Centre is scheduled for completion in 2017. The second large Prime Grade shopping centre will accommodate approximately 70,200 square metres of NLA including 30,000 square metres anchored by Parkson.
  • The increasing number of condominiums is definitely more than a concern for the property market in Phnom Penh. However, there has been a shift has been initiated towards office, industrial and retail projects as well as affordable housing. In June 2015, the Singapore based property company HLH Group Ltd has announced the launch of CAMHOMES aimed to provide high-quality affordable housing across the country.
  • Condo supply is expected to reach 10,000units by 2018. This exponential increase will mostly likely outstrip the steady demandin the intermediate term.
  • Condos in central Phnom Penh are still getting 6 to 7% yield on rent.
  • Foreigners bought 308 condominium units in 2014.The average price was $100,000
  • 1,949 units were sold from 2008 to 2014.
  • Only 20% of current condo owners are Cambodian.
  • The average asking price for a condo around $1900 per square metre.
  • DeCastle Royal opened in July in BKK1, with 90% of the 400 luxury condos being sold.
  • Oxley’s The Bridge has had much interest demonstrated by 80% of their apartments being sold.
  • Future developments include Olympia Development, Embassy Residence, Platinum Bay, Casa Meridan, Diamond Mansion and Times Square.
  • The traditionally expat-heavy area of BKK1 is being increasingly inundated with luxury residential developments with villas becoming sparse in the area.
  • Previously villas were a popular option for families however many of these have either been demolished and the land sold or converted into boutique hotels or restaurants.
  • Across Phnom Penh, the serviced apartment market continues to expand quickly.
  • The serviced apartments with 100 percent occupancy are those that provide the highest quality services and living standards.
  • When new, high-quality residential or commercial space becomes available, whether it’s condos or retail space, there are people who want to occupy these new offerings, as they have previously not existed.
  • Quality is in demand.
  • Upcoming areas include Russian Market and the west and south of the city.
  • These locations are very close to central Phnom Penh yet property remains considerably cheaper.
  • In addition, growing congestion and a lack of parking in the city centre is increasingly problematic.
  • Tonle Bassac, BKK3 and Wat Phnom are also becoming increasingly popular with foreigners for similar reasons.
  • The Daun Penh and 7 Maraka districts are also seeing a huge amount of development.
  • Olympic City is seeing major developments, and the area around the new ISPP campus to the south of Phnom Penh is likewise becoming popular with expats.
  • Toul Kork is proving a popular option with wealthy Khmer families and is home to a number of spacious villas and several new condominium blocks.
  • Especially in outlying areas of the city such as Toul Kork, there has been a rise in gated community developments offering an alternative to the traditional villa.
  • Chroy Changvar is also seeing rapid development.The introduction of the Chinese bridge over the Tonle Sap increases the number of lanes from two to six, which should ease congestion and boost the potential clientele of businesses located on the other side of the river.
  • There is everything available from shared work spaces for start-ups through to Grade B office space such as Canadia Tower.
  • In Phnom Penh, the office space sector is predominantly made up of Grade C/C- standard offices which – according to CBRE’s July 2013 MarketView analysis – take up around 73% of the market.
  • The remainder are Grade B/B+. The 22-storey Phnom Penh Tower and Canadia Tower are Grade B+ office space, offering a modern layout and finishings and quality fixtures. Office centres such as these are proving popular with international companies for the security and integrated facilities they offer.
  • Grade B standards are still high compared to the majority of offerings but fall below that of Grade A, usually in terms of location and facilities offered. The rental price is also reflected by the grade.
  • Several new Grade A office developments are in the process, with Vattanak Capital opening in July this year.
  • It is believed these developments will shape the future of Phnom Penh’s office landscape.
  • Along with this is GT Tower, due to be completed at the end of this year which will become the fourth largest office tower in Cambodia.
  • Aeon Mall launched in 2014 with high demand for store space from both international and local retailers.
  • On the 7th of August 2015, a well-known Japanese retailer announced the construction of Aeon Mall 2 within “Pong Peay City”. Scheduled to open in 2018, the project will encompass 70,500 square metres of Gross Leasable Area over a 10 hectare parcel of land. It will provide approximately 2,500 car parking bays and 2,000 motorbike spaces.
  • The new complex will target Cambodia’s higher-end consumers, but will also continue to cater to everyday shoppers, with a variety of international clothing and food and beverage brands.
  • When a new high-quality space becomes available, retailers previously uninterested in coming to Cambodia become interested as there are viable spaces for them to locate their brand.
  • Every food retailer wants space on a corner in BKK1, then a corner in Tonle Bassac or Daun Penh.
  • Corners offer at least six to eight parking spaces. Parking is a real issue as more vehicles get on the road and more people move into popular areas.
  • Bigger brands also want to be on the street corners just over Monivong Bridge in Chbar Ampov. They’ve got to follow the market, and that’s where this younger Khmer middle-class is living. The traffic makes it hard for everyone to come into central Phnom Penh and retailers now understand they’re going to have to go to their market to succeed. A lot of that development is happening to the west and north, around Sen Sok and Phnom Penh Thmey, next to Tuol Kork.

Real Estate Top Tips

When setting up a business, finding the right residential and business premises is essential. We call on our industry insiders to share their knowledge of how to find the perfect place to house yourself and your company.

  • While location is key for F&B businesses, prime spots in popular BKK1, which is saturated with restaurants and coffee shops, are being snapped up and rental prices rapidly rising.
  • Looking at outlying, off-the-map areas is recommended.
  • If you’re a destination business and people will come to you regardless, then you may not need to be in central town. If you are not – location may be crucial.
  • Look at BKK3 or Russian Market and pay significantly less, for instance.
  • Prices slump drastically when only moving marginally away from premium spots.
  • Rent prices in places like King’s Road and the Old Market are around $600 in Siem Reap, for instance. Just three kilometres away, they are $60.
  • As landlords realise the potential of their property, lease lengths and rental conditions have also been tightened.
  • The power of negotiation has also been lessened.
  • Lease length is important to take into consideration if you plan on developing a new building on the leased land or making drastic alterations to current buildings.
  • Real estate is viewed as a safe investment over the longterm, generally.
  • It is this, coupled with the rise in upmarket offerings that meet international standards, that have driven Cambodia’s property investment market.
  • And with more foreign investment expected from within the region as confidence in the market continues to grow, this is an area that is predicted to be active for the foreseeable future.
  • When it comes to investing in property, it’s advisable to recruit the help of reliable professionals who know the relevant laws and regulations of Cambodia.
  • Currently, there are no real estate related degrees offered in Cambodia and local expertise is limited.
  • Real estate legislation is also in its infancy and constantly evolving, with the law allowing the sale of individual units within condominium developments only being introduced in 2009 and the law on foreign ownership being amended in 2010.
  • You need a lawyer and qualified professionals to exercise the necessary due diligence to ensure peace of mind.
  • Evaluating the pros and cons and carrying out professional research into property investment potential is key.

A Guide To Property in Cambodia

How to find a property in the first place, what to look for when purchasing it and how to keep your title safe once you have bought it.

  • A few years ago most property that was bought, sold or leased was found by word of mouth or signs posted outside.
  • In fact, many people still look for apartments and office space by simply driving around town looking for “For Rent” Property values and rent prices were assessed by the owners and were often so arbitrary that good value came through luck or a lengthy search.
  • Even with the advent of estate agents and valuers, purchase and rental prices can vary considerably for similar properties in similar areas.
  • Be careful of landlords assessing what you are worth, as opposed to what their property is worth.
  • For a newcomer, real estate agencies and their increasing array of websites are arguably the best resource for finding property and accommodation in Cambodia.
  • Real estate agents not only serve as a buffer between you and the landlord but can also be a great source of information for other things you may require to get settled.
  • A reputable company should be able to provide references from satisfied customers.
  • As well as the established agencies, locals often know of a friend or family member who for a fee, paid by either you or the landlord, will find available apartments or offices.
  • Keep in mind, all of these people will be paid in commission from the house owner for introducing you. If they are negotiating on your behalf, bare in mind they are set to benefit from a hire rent price.
  • Property is the most valuable possession one can have in Cambodia, providing the chance to access additional services such as loans as you’re able to provide capital as security.
  • Cambodian law dictates that land can only be owned by a Cambodian citizen or a company in which at least 51% of the shares are owned by Cambodian citizens. Because of this, many companies simply lease property instead of purchasing, with land leases up to 99 years available.
  • The other way is to apply for Cambodian citizenship though this is an expensive exercise and you will need to demonstrate competence with the Khmer language as well as an understanding of Cambodian history and culture.
  • Foreigners can only own properties on the first floor or higher (not the ground floor), up to 70 percent of any one building, however this only applies to buildings with a strata title.
  • To legally own a property outright in Cambodia, that land must have a strata title regardless of whether it’s on the first floor or not, and regardless of whether a soft or hard title has been attained.
  • A strata title is a special type of hard title that allows an owner to divide a building into multiple individually saleable properties.
  • This is also known as the “condominium law”, as it is generally only granted to new condo buildings that are being built for this specific purpose.
  • Remember, if a strata title is not attained or unavailable, you will not be the owner of that property.
  • The law was introduced in a bid to boost the capital’s condominium market following the global economic crisis.
  • However, many estate agents have failed to pass on correct information and if a strata title does not exist on a property, a foreigner can only have up to 49% ownership.
  • The remainder must be under a Cambodian national’s name.
  • Long-term leases are common for large land plots where the occupier plans to build a permanent structure or use it for agriculture.
  • These can be for terms as long as 70 to 99 years but commercial sites such as pre-existing factories and warehouses will typically have lease terms of 5 to 10 years.
  • Rental prices continue to grow hand-in-hand with the capital’s swelling rental market. Also accompanying this growth is a decrease in negotiation power and lease length.
  • A 10 percent rental tax has cause landlords to increase rents to match, however, be aware that some have tried to raise the rent significantly more, so check the small print before signing a contract.
  • Leases for buildings typically run for 2 to 5 years with a reassessment of the terms upon expiration.
  • Given that property prices, and therefore rents, have tended to rise in recent years, you should factor into your budget a probable rent increase when the contract is up for renewal.
  • If you are planing on developing the land or buildings under lease – remember, your rent may rise dramatically in 5-10 years when you are due for renewal. This increases the risk of any investment into the property dramatically – and may limit investment of many new business owners.
  • When renting accommodation, leases vary widely and there does not tend to be an industry norm. This makes checking the deposit amount and what is included in the rent, such as wifi, cleaning and laundry, are also important factors.
  • When you find something to your liking and begin negotiations, keep in mind this is essentially the same as shaking hands on the deal and the details just need to be worked out. If you negotiate a price and then say you need time to think about it that won’t be well received.
  • The serviced apartment and condominium market continues to expand and remains heavily driven by the number of foreigners wanting to invest in the capital.
  • Mirroring the boom in high-end office space offering, the capital’s luxury living is also on the rise.
  • As mentioned previously, the movement has been spawned by the shake-up to property purchasing laws, with De Castle Royal being the country’s first luxury condominium block. The project has already proved a success, with 90% of the units reportedly being sold.
  • Other developments set to be complete during the next few years include Olympia Development, Embassy Residence, Platinum Bay, Casa Meridan, Diamond Mansion and Times Square.
  • Renters and those leasing commercial space now face a rental tax which has caused many landlords to increase rents.
  • Most have increased it to match the 10% tax but a few have tried to raise the rent significantly more, so check the small print before signing a contract. For more information, visit the website of the Ministry of Economy and Finance.
  • Property valuation in Cambodia can at times be difficult to assess as there is little transparent data available.
  • It is recommended that valuations, especially for larger assets and multi-million dollar transactions, are carried out by international valuers who comply with globally recognised standards set by governing bodies, such as the Royal Institution of Chartered Surveyors.
  • Some Cambodian banks still do in-house valuations when assessing new loans. This creates a conflict of interest as mortgage brokers are paid on commission.
  • Although, the industry is expecting the NBC to outlaw this practice in the near future, instead demanding all valuations are conducted by accredited independent appraisers.
  • Often in Cambodia the value is in the land rather than the building, especially with regard to older properties.
  • This is due to low construction and labour costs and, in many cases, the buyer wanting to demolish and develop on the existing land.
  • This leads to land price inflation—another reason why it is vital valuations are based on actual transactions, not speculation. In addition, always make sure the structural integrity of buildings is well assessed.
  • The age-old saying that ‘knowledge is power’ is ever apparent in a market that lacks transparency.
  • Accessing market data is extremely difficult as property records and statistics are not publicly available. Moreover, the accuracy of information received should always be questioned and sources cross-checked.
  • All land records were destroyed between 1975 and 1979. Consequently this led to a number of disputes over land after the fall of the Khmer Rouge regime, as proof of ownership was effectively impossible. In 1989, a Land Law was passed with a revised version being issued in 2001 that allowed private ownership of land.
  • Since then, more than two million land titles have been issued to Cambodians.
  • There are currently two types of land title documents that are issued in Cambodia: soft and hard titles.
  • A soft title is a possessory title issued by the village chief at the local communes and is not registered at national level, while a hard title is registered nationally with the Land Office and offers full ownership.
  • Hard titles contain detailed information that has been duly recognised and certified at a national level with the Ministry of Land and a cadastral office.
  • Soft titles often remain more popular, however, due to the avoidance of transfer tax, as when a hard title transaction occurs a four percent transfer tax is levied.
  • The majority of land in Cambodia comes under the soft title category, so if you want a hard title, employ the services of qualified legal specialists to ensure that is what you are getting.
  • Always conduct a title search with the relevant Ministry of Land Office or Commune Office before purchasing property. Such a search should confirm who holds the title to the property and reveal any registered mortgages or other encumbrances on the title.
  • Keep in mind, as buyer, you may not be given the actual title to conduct the search, because this is the seller’s only evidence of ownership. The buyer will instead get given a copy of the title, so it is important that you confirm that it is the most recent copy.
  • A titling system called LMAP (Land Management and Administration Project) has been introduced in Cambodia to improve land tenure security. Under the scheme, GPS coordinates are being registered for all land plots in the country.
  • In 2012, Cambodian Prime Minister Hun Sen launched a huge operation when he tasked more than 1,600 student volunteers to help grant land titles to villagers by measuring the land in a new land titling scheme.
  • If you have an LMAP title, the borders have been agreed between neighbouring parties so all border disputes have been resolved. This is the safest type of title.
  • The government is playing a key role in order to get a lot of property on a hard title as it’s more transparent and secure; secure for the owner, and also secure for the bank when the owner finances through the bank.
  • Soft titles are insecure, because you can place your soft title with many financial institutions and get a loan, whereas you can only have one hard title to one property.
  • A well qualified, well connected lawyer should check for you, rather than checking yourself. It’s not that easy to check yourself if you don’t have the right connections or don’t speak the language.