Cambodia's Developers Again Aim at Stars

[WALL STREET JOURNAL]

PHNOM PENH—Cambodia's low-rise capital city is reaching for the sky—again.

Long known as one of the last major Asian cities without a skyline, Phnom Penh embarked on a high-rise building boom in the middle of the last decade, only to see it derailed by the global financial crisis of 2008 and 2009. Although a few tall buildings were completed, including a 32-story bank tower, other ambitious projects—like an 1,820-foot skyscraper that would have been the tallest in Asia at the time and among the tallest buildings in the world, behind Dubai's 2,717-foot Burj Khalifa—never got off the ground.

Now that Cambodia has recovered from the financial crisis—gross domestic product increased 6.0% in 2010, after rising 0.1% in 2009, according to the World Bank—its developers are dusting off ambitious plans again. They are betting that Cambodia could become one of Asia's next big investment hot spots, though it remains far from clear whether the country, one of Asia's smallest, can sustain the high-end, high-risedevelopment that has transformed other Asian cities in recent years.

Premier pushes skyscrapers

[PHNOM PENH POST]

Prime Minister Hun Sen yesterday promised accolades to the builder of Cambodia’s next skyscraper, while downplaying disputes on tall buildings near the Kingdom’s monuments.

Construction investments in Cambodia increased by about 105 per cent in 2011, hitting US$1.73 billion, according to Hun Sen. “Currently, there are no problems with skyscrapers [in Cambodia] and I declare that I will grant a medal to the builder of the highest skyscraper,” the premier said before hundreds of government officials at the opening of a new Ministry of Land Management, Urban Planning and Construction building on the capital’s Monivong boulevard.

He also rebuked “extreme conservatism” on the building of skyscrapers near the Royal Palace, deeming anywhere except near the airport open for potential building projects.

Prices for office space fell on oversupply last year, real estate insiders have said, and the trend could accelerate with the opening of the Kingdom’s third grade-A office block, the 38-storey Vattanac tower, expected to be finished in October.

Unlicensed property firms targeted by government

[PHNOM PENH POST]

The Ministry of Economy and Finance is urging the public to use the services only of licensed real estate operators, and is calling for unlicensed real estate valuation and sales companies to legalise their operations.

According to a statement released on Friday, the MEF has licensed 43 real estate valuation and estate service agent companies to legally operate in Cambodia this year.

Twenty-four of them are authorised to operate solely as state service agents, while the rest have permission to operate as both.

“We announced the names of companies to promote them, because they are operating legally.

We want to inform consumers looking for valuation services and estate agent companies, so that they contact these licensed companies,” said Mey Vann, director general of the MEF’s financial industry department.

Phnom Penh waives property tax for some

[PHNOM PENH POST]

The Ministry of Economy and Finance has exempted 20 of Phnom Penh’s communes from paying a property tax for 2011, according to a statement released by the ministry.

The communes in question are in the capital’s Sen Sok, Dangor, Meanchey and Russey Keo districts, according to the statement.

Property owners who had already paid the tax would have that amount applied to their obligation, if any, for 2012, the statement said.

Ministry officials could not be reached to explain why these communes were exempt from last year’s tax.

Bonna Realty Group CEO and National Valuers Association of Cambodia president Sung Bonna said yesterday the communes had been previously been part of Kandal province, which did not levy a tax on property owners.

More foreigners buy real estates in Cambodia

[XINHUA]

PHNOM PENH, Jan. 9 -- More foreigners are buying Cambodia's real estates, especially, condominium which is mushrooming in the country.

Sung Bonna, President of the National Valuers Association said Monday that foreigners have occupied some 2,600 units in the condominium industry in the country.

He said, by the end of 2011, nine condos were operated in Phnom Penh and about seven more are about to open soon.

Sung Bonna said the number of foreigners buying condos was higher than previous years due to stability of the country, and a newly adopted law that allows foreigners to own condo or building up from the first floor.

In a move to encourage foreigners to invest in Cambodia's real estates, Cambodia adopted in 2010 a law allowing foreigners to own properties themselves, but from the first floor.

Gallagher secures Cambodia’s first high-rise building

[GSN Magazine]

Gallagher announced on Dec. 7 that its security solution will be installed in Vattanac Capital Tower, Cambodia’s first high-rise building.

At nearly 184 meters high, the 39-story building will be the tallest building in Phnom Penh and the city’s most prestigious commercial address, ultimately providing a unique cultural presence in the capital city. Designed to meet the needs of Cambodia’s developing business community, the high-rise will include trading floors, offices, high-end retail and luxury serviced apartments.

Ian Meadows, Gallagher’s business development manager, said the exclusive development will be secured by Gallagher’s Command Centre, a central management platform for integrated access control, designed and manufactured by the New Zealand-based technology company.

The Gallagher security solution will also include a high-level interface to the Schindler elevator system, which will enable system operators to monitor all access from one central point. The security project will be managed by Gallagher’s channel partners Comin Khmere, of Cambodia, and the AES Group, of Thailand.

Ministry makes appeal to property taxpayers

[PHNOM PENH POST]

The Ministry of Economy and Finance will begin appealing to property owners to pay their taxes after too few property owners registered for tax payment by the original September 30 deadline, the ministry’s finance director, Mey Vann, said yesterday. The ministry will conduct a media campaign to educate property owners on taxpaying and vowed to punish tax evaders after the new deadline, Mey Vann said. “If they don’t pay on time, they will get punished,” he said. Cheng Kheng, managing director at Cambodia Property Limited, said yesterday that the government should publish more tax information to help people understand the new tax.

Date of completion set for De Castle Royal development

[PHNOM PENH POST]

Construction work on the US$50 million De Castle Royal Condominium is back on track and slated for completion in December 2012, company officials told the Post yesterday.

The project, developed by Korean company Nuri D&C, was postponed towards the end of 2009, as a result of the global financial crisis, but construction restarted in June this year.

“After more than a year of postponement, we are now pushing ahead with construction and plan to finish by the end of 2012, Nuri D&C director Yoo Sung Hoi said yesterday.

The capital investment, size and number of storeys will remain unchanged, he said, adding that construction will be unaffected by the climate of the local market.

Huge real estate deal gets tongues wagging

[PHNOM PENH POST]

Speculation has it the biggest property deal in half a decade has just been inked, dwarfing the Hongkong Land purchase made last spring.

Hongkong Land (Singapore) Pte Ltd, a subsidiary of Jardine Matheson, shelled out $35.7 million in April for a number of properties in Phnom Penh and Siem Reap from the ailing JSM Indochina, of course. But this new deal is supposed to be worth nearly US$100 million.

Media reports yesterday quoted Jardine country advisor John Brinsden, also vice chairman at ACLEDA Bank, as saying that ground would be broken on the Embassy project “early next year.” Still, it appears someone has made a bigger bet on the capital’s property market, this time the commercial sector.

Multiple outside sources, none of whom are quoted in this column, have confirmed that a certain bellwether international real estate company will buy a plot of land in southeast Phnom Penh for close to nine figures. Development of the land will result in a landmark shopping centre for the capital city, according to those sources.

Late November deadline for property tax payment

[PHNOM PENH POST]

The collection period of the recently implemented property tax has been extended to late November to give homeowners more time to pay the tax, according to a government statement released this week.

The collection period was slated to finish at the end of September, but  confusion and a lack of understanding among taxpayers has led to the postponement of the due date, Mey Vann, director of the Department of Finance Industry in the Ministry of Finance and Economy told the Post yesterday.

“We don’t have any problems. We’ve just given people additional time to pay the tax to make it more convenient for them,” he said.

The ministry had been informed that a number of taxpayers were struggling to understand where and how to pay the tax, and that a number of the collection points were overcrowded, the statement said.
Mey Vann confirmed, however, that since the property tax prakas was released, collection figures had been positive.

Aiming for full occupancy at Canadia

[PHNOM PENH POST]

An increasing number of multinational companies have started operations from Canadia Tower in light of the launch of the Cambodia Stock Exchange in July, officials at the tower said yesterday.

Around 85 percent of available office space at the Kingdom’s tallest building has now been rented, a 15-percent increase on figures released in July, according to Pen Phyrun, marketing manager of Mega Asset Management Co, the property unit of tower owner Overseas Corporation Investment of Cambodia. OCIC is owned by Canadia Bank.

“Since the Cambodia Stock Exchange moved in to our tower, we have welcomed many multinational clients, while a number of international firms have also confirmed bookings for office space,” he said.

Satellite city speculation

[PHNOM PENH POST]

Construction will soon begin on yet another satellite city in Phnom Penh, this time worth US$1.6 billion. Most people must be scratching their heads, as there are already four similar projects totalling $4.4 billion either planned or presently under construction in the capital.

The general sense of economic optimism that drove investment before the global financial crisis seems to have returned. Perhaps that feel-good factor is what drove the prime minister this week to predict as much as 8.7-percent growth in domestic GDP for the year, a significant jump over the Asian Development Bank’s most recent projection of 6.8 percent.

The newest site, dubbed “City of the Future”, boasts of everything from a national stadium to 40,000 residential units on a 387-hectare plot on Phnom Penh’s Chroy Changvar peninsula. The development now joins Grand Phnom Penh International City, Koh Pich, Camko City and, of course, the Boeung Kak lake development as one of the capital’s real estate mega-projects. These satellite cities will add about 1,000 hectares of residential and commercial space to greater Phnom Penh over the better part of a decade or more, the Post has previously reported.

Real estate developers warned

[PHNOM PENH POST]

Unlicensed real estate developers may find their projects blacklisted if they fail to register with the Ministry of Economy and Finance, a ministry official said yesterday.

The MEF published the names of three developers in a local paper last week and has promised to warn consumers of other unlicensed projects, Mey Vann, director of the Department of Industry and Finance at the MEF, said. Real estate scams have plagued the Cambodian market since 2007, he added.

Consumers put down payments on unfinished residential and commercial projects only to find developers absconding with their cash, Mey Vann said.

However, the recent recovery in the Kingdom’s real estate market has prompted the government to rein in illicit property transactions, he said.

High hopes for new development

[PHNOM PENH POST]

The building site of Vimean Phnom Penh City

THE first phase in the construction of a new housing development in Phnom Penh’s Russey Keo district has been slated for completion by the end of 2012.

Vimean Phnom Penh City is set to become Ly Hour Group’s second real-estate project and has already attracted ample interest from buyers, according to Ouch Pysal, the group’s assistant president.

“We began construction on this project in June this year, and have already sold 30 percent of the units in phase one,” he said. Unlike other recent housing projects, which have primarily enticed foreign buyers and investors, Vimean will be populated entirely by Cambodian nationals, as all the units are houses.

Satellite city deal worth $1.6bn inked in capital

[PHNOM PENH POST]

The signing ceremony.

CONSTRUCTION of a US$1.6 billion satellite city on Phnom Penh's Chroy Changvar peninsula will begin this year after officials inked a contract yesterday with local firm Overseas Cambodia Investment Corporation.

Dubbed “City of the Future,” the project would include a national stadium, a 60-hectare park, shopp-ing malls, financial centres, hotels, schools and 40,000 residential units on a 387-hectare plot, Pung Kheav Se, president of Canadia Bank Plc and chairman of OCIC, said yesterday. The project is expected to take as long as 15 years to complete.

Phnom Penh governor Kep Chuk Tema, who signed the contract with OCIC, said the project was a symbol of the Kingdom's robust growth and a necessity in meeting the capital's growing population.

Capital’s growth pushes housing demand

[PHNOM PENH POST]

A building site in Phnom Penh

PHNOM Penh’s growing population is driving demand for residential property, with approvals soaring in the first seven months of this year, according to Lao Tip Seiha, director of the construction department at the Ministry of Land Management, Urban Planning and Construction.

A total of 227 construct-ion projects were approved in the period, worth an estimated US$85.1 million, a 28 per cent increase compared to 189 projects, worth $66.3 million year-on-year, ministry statistics show.

“We have seen increasing housing development projects blossom around Phnom Penh in recent years, a clear sign that residential demand continues to grow,” Lao Tip Seiha said.

Taxes set to reduce transactions

[PHNOM PENH POST]

THE pending property tax could lead to declining residential property transactions in the Kingdom as residents fear rising house prices.

Although the property sector is currently stable after the country’s recovery from the financial crisis, it is expected to stall once the prakas is implemented, VMC Property Company General Manager Dit Channa said.

“Many residents are not fully aware of the regulations relating to tax collection, which could lead to hesitation among purchasers, temporarily dampening the market.”

The taxation will also put pressure on multiple-property owners, especially residential landlords, who may reconsider purchasing further properties, potentially reducing transactions, she said.

“Many owners have already started selling property, but buyers are questioning them over the implications of the proposed tax.”

She added that the government should suspend the implementation of the edict for a year to allow for further recovery in the sector.

Exchange rate set for property taxes

[PHNOM PENH POST]

THE Minister of Economy and Fin-ance has fixed the exchange rate for payment of property tax this year at 4000 riel to the dollar, according to a prakas obtained yesterday.

“We have issued this prakas to co-ordinate and make it easier for the Cambodian people to pay property tax,” ministry Secretary of State Ngy Tayi said.

Yesterday, one dollar traded for 4088 riel in Phnom Penh.

The property tax will be levied at 0.1 per cent of a property’s value, provided the property is worth more than 100 million riel, or US$25,000.

Ngy Tayi said this year’s property-tax collection eff-orts, the Kingdom’s first, would assist with establishing a culture of tax collect-ion in Cambodia.

“It is our duty to pay the tax,” he said.

Building big at Pearl City

[PHNOM PENH POST]

Houses at the Pearl City Asia development project.

WORK is continuing on the huge Pearl City Asia project at Sihanoukville, according to the developer of the project.

Thai Boon Roong Company, which also owns the Intercontinental Hotel in Phnom Penh, plans to build a mix of more than a thousand residences served by a shopping mall, a school and a hospital.

The company will also build hotels on the 62-hectare site, which sits in Mittapheap district, near Sokha Beach.

The project had begun in 2009 and completion was expected in 2014, project manager Tous Saphan said.

The fact that construction had begun at the height of the global financial crisis in 2009 did not deter Thai Boon Roong, he said.

“Even though the world economic downturn hit our project and affected sales, we never postponed anything,” Tous Sophan said. “We pushed ahead with the project, and expect to finish it on schedule.”

Property tax questions asked

[PHNOM PENH POST]

CAMBODIA’S property tax is to come into effect next month, though experts say the levy is not widely understood and may be too early.

The property tax will initially focus on the capital’s properties, comprising an annual payment calculated of 0.1 percent of the value of the property as estimated by an evaluation committee, according to previous prakas.

Phnom Penh’s properties have been valuated by a committee formed by the Minister of Economy and Finance, with Bonna Realty Group assisting the process.

However, Bonna Realty Group CEO and President said he believes public knowledge of the property tax is still fairly restricted.

“I feel that many people don’t understand how the law will work, even I don’t understand certain elements,” he said.

“A workshop should be held between the private and public sector, in order to extend public knowledge”

Although properties worth less than US$25,000 are exempt the tax, it still could cause issues for Cambodians in the lower wage brackets, he said.