construction investment cools down but markets remain heated · marketview cambodia part of the...

CambodiaPart of the CBRE affiliate network

MARKETVIEW

Construction investment cools

down but markets remain heated

Phnom Penh, Q1 2017

© CB Richard Ellis (Cambodia) Co., Ltd 2017 | 1

Prime Condominium Rent$15.6/SQM

Prime Retail Mall Rent$39.8/SQM

Q1 2017 CBRE Research

Average High-end Condominium Price$3,108/SQM

Prime Office Rent$22.2/SQM

OVERVIEW

The Asian Development Bank (ADB) expects to see

GDP growth of 7.1% in 2017 and 2018; 0.1% higher

than their previous prediction.

In contrast to a significant increase in the volume of

investment into construction seen last year, the first

quarter of 2017 saw a 22% decline in approved

construction projects year on year to a total value of

1.28 billion USD across 786 projects. The most

popular projects to gain approval during the period

were mid to high rise commercial and residential

buildings, in addition to factories.

In the first quarter of 2017, land values across

Phnom Penh’s principal districts appreciated by an

average of 3.5%. A lack of available land plots in

addition to historically high prices in central

districts have caused developers to further consider

secondary locations. Alongside increasing

development activity, infrastructure improvements

connecting those locations to central districts and

the presence of some prominent commercial

developments have driven land price appreciation in

secondary districts. Of particular note is the city’s

Sen Sok district where land prices rose 11.8% q-o-q.

In the wake of new office supply, overall occupancy

and rents were stable in Q1 2017 compared with the

previous quarter.

Quoting prices for condominium units witnessed a

slight decrease in Q1 this year, compared to Q4 2016.

The capital is set to welcome a significant wave of

new condominium supply over the course of 2017.

HIGHLIGHTS

The Asian Development Bank expects Cambodia’s

GDP to expand by 7.1% in 2017 and 2018, a slight

upwards revision from the 7% predicted last year.

Construction investment in Cambodia saw a 22%

drop in Q1 2017, compared to the corresponding

period last year. A total of 786 projects with a

combined value of 1.28 billion USD were approved.

In Q1 2017, overall occupancy and rents of modern

office stock in Phnom Penh were stable compared to

the previous quarter, whilst supply increased by 6%.

Quoting prices of condominium units saw a marginal

decrease across all grades in Q1 compared to the

pervious quarter.

Two condominium projects, totaling 1,055 units were

launched during Q1, both are in secondary districts.

Figure 1: Indicative Land Price by District in Phnom Penh (USD/SQM)

Source: CBRE Research, Q1 2017

*Arrows indicate change from the previous quarter.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2010 2011 2012 2013 2014 2015 2016 Q1 2017

Doun Penh Chamkarmon 7Makara

Toul Kork Russey Keo Sen Sok

Chroy ChangvarNote: Average price of Land plots

between 0.2ha and 3ha.

MARKETVIEW


SUPPLY

Phnom Penh is set to welcome a significant wave of

condominium supply in 2017, with circa 7,000 units

due to be delivered by the end of this year. CBRE

expect to see the completion of more than 1,500

condo units in Q2. We are aware that sales went

well in Q1 for projects that combine high-quality

finishes and design, with a strong location.

Only two condominium projects were launched off-

plan over the course of Q1. The two projects

together comprise a total of 1,055 units both are

located in Phnom Penh’s secondary districts.

SALES PRICES

Average quoting prices marginally decreased during

Q1 2017 across all grades compared to the

preceding quarter. Meanwhile sales prices in the

secondary markets also dropped 1.5% q-o-q. On

average quoting prices have shrunk 1.0% since Q1

2016.

Average quoting prices in the affordable segment

were broadly stable, prices have fallen 0.8%

compared with Q1 2016. Quoting prices for mid-

range condominiums reduced by 2.2% q-o-q, while

high-end projects saw quoting prices shrink by

0.7% q-o-q and 2.7% compared with the same

period last year.

Average quoting prices of newly launched projects

in Q1 were in the order of US$1,350 per sqm based

on net internal area.

PRIME CONDOMINIUM RENTS

Prime condominium rents were stable in the last

quarter compared to the previous quarter, with an

average rent per square meter per month recorded

at US$15.6. Lower grade condominiums achieved

rents in the region of US$10 per sqm per month.

Monthly rents for prime 1 Bedroom units achieved

between US$800 and US$1,500 per month, whilst

prime 2 Bedroom condominiums were rented at

between US$1,500 and US$2,000 per month.

Q1 2017 CBRE Research 2

PHNOM PENH CONDOMINIUM Q1 2017


Figure 4: Achieved Rents of Prime Condominiums (High-End)


Figure 3: Average Price Per Sqm of Phnom Penh Condominiums (Q1 2015-Q1 2017)


Figure 2: Phnom Penh Condominium Supply by Grade (2009-2019F)

© CB Richard Ellis (Cambodia) Co., Ltd 2017 |

0%20%40%60%80%100%120%140%160%180%200%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Affordable Mid-Range High-End % Change

$1,250

$1,750

$2,250

$2,750

$3,250

$3,750

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Affordable Mid-Range High-End

$0

$4

$8

$12

$16

$20

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1-Bedroom 2-Bedroom 3-Bedroom

USD/

Month

Rental Range Per Month (High-End) Average Rent Per Sqm

MARKETVIEW


SUPPLY

A total of 17,000 sqm across two office buildings

was added to the capital’s Grade-C stock during

the first quarter of 2017, representing a 6%

increase in the total office stock.

Exchange Square, the second Grade-A office in

Phnom Penh, is on-track to deliver 18,000 sqm

of new office space during Q2 2017.

In the wake of new supply, the overall occupancy

rate was broadly stable during Q1, recording a

marginal decrease to 75.7%, from 75.9% during

the previous quarter. CBRE estimate the total

net absorption in Q1 was approximately 6,000

sqm.

RENTS

Average rents across all grades were stable in Q1

2017 compared to the previous quarter, whilst

when compared with the corresponding period

last year rents were 0.7% lower.

Quoting rents for Grade-A space remained stable

at approximately US$28 per sqm, exclusive of

service charge.

STRATA-TITLE OFFICE

As of Q1 2017, 11 strata-title office projects

comprising a total of 150,000 sqm have been

announced or are under construction. More

than 90,000 sqm of strata-title offices are set to

be delivered by the end of 2018, with a further

40,000 sqm in 2019. Average quoting prices for

strata-title office stood at approximately

US$3,300 per sqm as of Q1 2017.

We expect to see continued interest from both

local and international developers in the strata-

title office market over the course of 2017.


PHNOM PENH OFFICE Q1 2017


Figure 7: Strata-title Office Under Construction / Announced (2018f –2020 onward)


Figure 6: Average Quoted Office Rental Rates (USD/SQM/Month) (2012 – Q1 2017)


Figure 5: Phnom Penh Office Supply by Grade (2008- 2017 Q1)


*Exclusive of service charge

SQM (NLA)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2018F 2019F 2020 onward

0%10%20%30%40%50%60%70%80%90%100%

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2008

2009

2010

2011

2012

2013

2014

2015

2016

Q1 20

17Grade C Grade B Grade A Occupancy Rate

0102030

2012

2013

2014

2015

2016

Q1 2017

Grade B (CBD)

-5 5 15 25

Grade C (CBD)

MARKETVIEW


0

100,000

200,000

300,000

400,000

500,000

600,000

Shopping Mall Community Mall Retail Podium Other Retail


PHNOM PENH RETAIL Q1 2017


Figure 10: Phnom Penh Retail Demand


Figure 9: Quoted Retail Rental Rates by Type (USD/SQM/Month)


Figure 8: Retail Supply by Type (2009-2019F)

SUPPLY

By the end of 2018 the supply of modern retail

space in Phnom Penh is set to double from the

current levels of supply. These increases are

primarily driven by a combination of new

shopping complexes developed by international

groups and significant retail components within

residential led mixed-used schemes.

Following the success of TK Avenue, CBRE are

aware of a number of planned community mall

developments either announced or under

construction, two of which are due to complete

between 2017 and 2018.

RENTS

Prime retail rents were stable over the course of

the first quarter of 2017, although prime rents at

shopping malls decreased slightly to US$31.1

per sqm per month, representing a decrease of

0.9% q-o-q but an increase of 1% compared with

Q1 2016.

As of Q1 2017, the highest average prime rents

were attributed to retail arcades at US$52.5 per

sqm, followed by retail podiums at US$48.3 per

sqm.

Achieved rents are noted to have fallen within

aging retail stock, where competitive rents are

offered to attract tenants in the face of changing

consumer preferences and an increasing supply

of international quality stock.

DEMAND

According to the CBRE’s research, the top three

occupiers of shopping malls in Phnom Penh are

Fashion & Accessories, Food & Beverage and

Entertainment; together they occupy a total of

62% of existing retail space within shopping

malls in the city.

The expansion of Phnom Penh’s middle-class

acts as a key driver to the trend of international

brands entering the city’s retail scene. CBRE

expects to see sustained demand principally

from Food & Beverage and Fashion & Accessories

retailers across 2017.


SQM (NLA)

Q1 2017 CBRE Research

$31.1

$48.3

$30.5

$52.5

$- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00

Prime ShoppingMall

Prime RetailPodium

Prime High Street Prime RetailArcade

Rental Rate Range Average Rental Rate

27%

21%14%

9%

7%

4%1%1%

16%

Fashion & Accessories F&B Entertainment

Houseware & Furniture Electronics Beauty & Health

Finance & Services Stationary Others

MARKETVIEW

Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy andcompleteness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

http://www.nationmultimedia.com/aec/UK-Japan-help-in-Myanmars-urban-planning-30281460.html


For further information, please contact:

James Hodge

Associate Director

+855 89 333 722

[email protected]

Sambath Phal

Analyst

+855 92 791 750

[email protected]

To learn more about CBRE

Research, or to access

additional research reports,

please visit the Global Research

Gateway at

www.cbre.com/researchgateway.

Muyngim Lim

Analyst

+855 98 331 771

[email protected]

T+855 23 964 099

F+855 23 964 088

[email protected]

www.cbre.com.kh

CBRE Cambodia,

9th Floor, Phnom Penh Tower

#445 Monivong Blvd

Boeung Prolet Quarter

7 Makara District

Phnom Penh, Cambodia.

PHNOM PENH Q1 2017

construction investment cools down but markets remain heated · marketview cambodia part of the...

Documents