of real estate in cambodia? marc townsend · fdi boosts cambodian economy in 2019 43% 11% 7% 6% 6%...

How bright is the future

of real estate in Cambodia?

Marc Townsend

Chairman, CBRE Cambodia

CBRE Cambodia | +855 23 964 099 | [email protected] | www.cbre.com.kh

This version of CBRE Cambodia’s Fearless Forecast 2020 has been summarized for brevity and ease of download.

For the full Fearless Forecast, contact our Research and Consulting Team;

Kinkesa Kim

Senior ManagerE: [email protected]: +855 95 777 582

Sonic Sovuth

Senior AnalystE: [email protected]: +855 777 982

Kimsea Chea

AnalystE: [email protected]: +855 85 333 662

Kemsokiry Ouch


SUMMARY

CONTENTS

Overview

1 2 3 4

Infrastructure ResidentialLand

Retail

5 6 7 8

Office IndustrialTourism &

Hospitality

9 Marc’s Fearless Forecast 2020

OUR GREEN NET STATISTICS FOR PHNOM PENH» Q4 2019 «

GREEN NET PROJECTS BY TYPE GREEN NET PROJECTS BY DISTRICT

0

20

40

60

80

100

120

140

160

180

405GREEN NET PROJECTS

Source: CBRE Research, Q4 2019

NUMBER OF GREEN NET PROJECTS

4

18%

14%

13%

13%

12%

8%

7%

6%

6%3%

Boeng Keng Kang Toul Kork Chamkarmon

Sen Sok Doun Penh Chroy Chongvar

Mean Chey 7 Makara Russey Keo

Chbar Ampov

1Overview

2019: The Year In Review

7

CAMBODIA OVERVIEWEconomic Indicators 2012 2013 2014 2015 2016 2017 2018 2019e 2020f

GDP (Bn USD) 14.1 15.3 16.7 18.2 20.2 22.1 24.57 25.9 29.7

GDP Growth (%) 7.3 7.4 7.1 7.0 6.9 7.0 7.5 7.1 6.8

GDP Per Capita (USD) 973 1,042 1,135 1,171 1,265 1,372 1,476 1,679 1,816

Inflation (%) 2.9 2.9 3.9 1.7 3.5 3.1 3.2 3.3 2.3

No. of Foreign Tourist Arrivals (Million) 3.6 4.2 4.5 4.8 5.0 5.6 6.2 6.7 7.0

Banking and Finance 2016 H1 2016 H2 2017 H1 2017 H2 2018 H1 2018 H2 2019 H1 2019 H2

KHR/USD (Official) 4,084 4,037 4,086 4,039 4,032 4,060 4,034 4,055

1-Year USD Lending rate (%)* 11.50 11.50 11.50 11.50 11.42 11.11 11.05 10.68

1-Year USD Deposit rate (%)* 4.25 4.25 4.25 4.35 4.41 4.44 4.67 4.59

Real Estate Indicators 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4

Prime Condo Price (USD/SQM) 3,212 3,147 3,211 3,226 3,260 3,272 3,254 3,190 3,184

Prime Office Rent (USD/SQM/Month) 25.4 25.4 25.5 25.3 25.6 25.6 25.6 25.5 25.6

Source: National Bank of Cambodia, Ministry of Economy and Finance, Asian Development Bank, World Bank & IMF

Source: National Bank of Cambodia & CBRE Research

* Average rate of ACLEDA, UCB, Canadia, Vattanac, Maybank, Bank of China, CIMB & ABA


7

8

URBAN CAR OWNERSHIP RATIO

Source: Ministry of Transportation of Cambodia, Thailand, Vietnam, Singapore

0

2

4

6

8

10

12

Bangkok Ho Chi Minh Singapore Phnom Penh

Millions

Population Cars

Bangkok =

Ho Chi Minh =

Singapore =

Phnom Penh =

8

9Photo: Phnom Penh Post

FDI BOOSTS CAMBODIANECONOMY IN 2019

43%

11%7%

6%

6%

27%China

South Korea

Vietnam

Singapore

Japan

Others

Source: National Bank of Cambodia 2020

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

1

2

3

4

5

2016 2017 2018 2019E 2020F

Billion

Financial Sector Non-financial Sector Percentage Change

Source: National Bank of Cambodia 2020

9

12%2019 FDI = USD 3.9bnY-O-Y

FDI by Source

10

2019: PEAK CONSTRUCTION?

$9.3 4,446 18.5Billion Projects Million SQM

2019

$5.2Billion

2,867 11.4Projects Million

SQM

2018

10Photo: Phnom Penh PostSource: Ministry of Land Management, Urban Planning and Construction

Approved Projects

11

DIVERSIFICATION OF DEVELOPMENT FUNDING

CASH

CONSTRUCTION

LOANS

INFORMAL FUND

STRUCTURES

BONDS

IPO

OFF-SHORE

LENDING

CROWD

FUNDING

FORMAL FUND

STRUCTURES

VENTURE

CAPITAL

12

0

100

200

300

400

500

600

700

800

2000 2005 2010 2015 2020

Num

ber of com

panie

s liste

d

Vietnam Thailand Cambodia

CAMBODIA STOCK EXCHANGE DEVELOPMENT

CSX | Est. 2011Energy & Utilities, Commerce, Garment

$800 Million 5

Listed Companies

Banking, Insurance, Real Estate, Petroleum, Electricity, Commerce and Pharmaceuticals

VN-INDEX |

Est. 2000

391Listed

Companies

$124 Billion

Source: Various stock exchanges

2019REAL ESTATE IN THE NEWS

CLIMATE CHANGE: NATURE TAKES REVENGE?

1515

Photo: Khmer Times

16Photo: KhmertimesPhoto: South China Morning Post

16

17

INFRASTRUCTURE SEES PROGRESS

3D render by the Ministry of Public Work and Transportation Current road condition (January 10, 2020)

17

$294 8 34Million Months Streets

2Infrastructure

19

AIRPORT INFRASTRUCTURE

NEW PHNOM PENH

INTERNATIONAL AIRPORT

SIHANOUKVILLE INTERNATIONAL

AIRPORT UPGRADE

DARA SAKOR INTERNATIONAL

AIRPORT

Project Value: USD 350 Million

Runway: 3,200m

Width: 60m

Construction started: December 01, 2018

Expected Completion: Q4 2022

Developed by: Union Development Group

Terminal: 4,800sqm

Runway: From 2,500m to 3,300m

Width: 40m

Construction Expectation: September 2019

Expected Completion: 2022

Developed By: Cambodia Airport

Project Size: 2,600 hectares

Project Cost: USD 1.5 billion

Runway: N/A

Width: N/A

Construction Expectation: N/A

Expected Completion: N/A

Developed by: Oversea Cambodia Investment

Corporation & State Secretariat of

Civil Aviation

MONDULKIRI AIRPORT

(Being Studied)

Project Size: 700 hectares

Project Cost: USD 880 million

Runway: N/A

Width: N/A

Expected Completion: TBC

Developed by: Cambodia Airport

NEW SIEM REAP

INTERNATIONAL AIRPORT

19

Source: Various sources

20

HIGHWAY INFRASTRUCTUREPHNOM PENH – SIHANOUKVILLE EXPRESSWAY

Length: 190.63 km

Lances: 4

Width: 25m

Inter-change: 7

Medium-long bridge: 56 bridges (4,417m)

Short bridges: 33 bridges (750m)

Rest area: 3

Duration: 48 months

PHNOM PENH – BAVET EXPRESSWAY

Length: 135 km

Lances: 4

Width: 25.5m

Viaduct: 12km

Box culvert: 28.4 km

Embankment: 85.8 km

Inter-change: 7

Rest area: 6

7%

Completed

Too expensive?

20

21

Depot Spur Line:

4.8km

Airport Spur Line: 2.6km

Corridor 4: 10.5km

Corridor 1: 9.6km

Corridor 2: 11.8km

CORRIDOR 3 BEING PRIORITISED

Length: 19 km

Type: AGTStudy Status: Completed in Feb-2019

Stations: 20 (2 underground stations)

Value: USD1.8 Bn

Studied by: JICA

MASS TRANSIT

21

22

RING ROADRING ROAD NO. 3

Length: 52.9 km

Lanes: 4

Width: 25m – 27m

Overpass: 4

Bridge 2 bridges Construction Started: January 2019

Duration: 42 months

Expected Completion: December 2021

22

PROJECT PROGRESS: JANUARY 2020

24

REGIONAL LAND VALUE COMPARISON

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

HO CHI MINH BANGKOK PHNOM PENH

CBD Inner City

FAR: 9 - 10 FAR: 9 - 12 FAR: 10 - 12

24

Source: CBRE Research, 2019

PHNOM PENH

REMAINS

FAVORABLE

FOR REAL ESTATE

DEVELOPMENT

25

PHNOM PENH LAND PRICES

0

1000

2000

3000

4000

5000

6000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Daun Penh Chamkarmon 7 Makara Toul Kork Russey Keo Sen Sok Chroy Changvar


26

2008 2009 20192014

LAND VALUE IN

DIAMOND ISLAND| CURRENT AVERAGE PRICE

USD4,700/SQMAVERAGE PRICEIN 2009

$1,300/SQM

INFRASTRUCTURE - LAND VALUE’S BEST FRIEND

4Residential

Market Outlook

NEW LAUNCHES AND COMPLETIONS OVER THE COURSE OF 2019

NEW LAUNCHES

27 NEW LAUNCHES

OVER 16,500 UNITS

INTRODUCED TO THE

MARKET IN 2019

COMPLETIONS

11 COMPLETIONS

OVER 3,800 UNITS

COMPLETED IN 2019+

SOME PROJECTS WERE PARTLY COMPLETED


HIGH-END

24%

AFFORDABLE

30%

S U P P L Y B Y S E G M E N T | 2 0 2 0 F

MID-RANGE

46%

HIGH-END

23%

AFFORDABLE

24%

2019 | 18,000 UNITS

MID-RANGE

53%

CONDOMINIUM

SUPPLY 2020F

30%

46%

24%

Affordable Mid-Range High-End

SUPPLY EXPECTED TO INCREASE

55% Y-O-Y COMPARED TO 2019

28K

UNITS


$1,250

$1,750

$2,250

$2,750

$3,250

$3,750

Q1

2017

Q2

2017

Q3

2017

Q4

2017

Q1

2018

Q2

2018

Q3

2018

Q4

2018

Q1

2019

Q2

2019

Q3

2019

Q4

2019

Affordable Mid-Range High-End

SALE PRICES:

Q4 2018 VS Q4 2019

$1,466 $2,562 $3,260

AVERAGE PRICE PER SQM BY SEGMENT

Q4 2018

Q4 2019

$1,544 $2,595 $3,184

Y-O-Y CHANGES

Affordable 5.32%

High-End

Mid-Range 1.28%

-2.33%


2018 2019

9PROJECTS

4,560

UNITS

5,230

UNITS

13

PROJECTS

LAUNCHES OF “AFFORDABLE” PROJECTS RISING

MORE CAMBODIAN MILLENIALS

WILL BE MOVING TO CONDOS

BUILT-IN FACILITIESGYM, SWIMMING POOLS, KIDS ROOMS…

LOCATION & AMENITIESYOUR NEEDS ARE WITHIN YOUR REACH

LESS TIME WASTED IN TRAFFICTHE CENTER OF EVERYWHERE

AFFORDABILITYCOST LESS TO BUY AND MAINTAIN

INDEPENDENCEEXPLORE WAYS TO SHAPE THEIR LIVES

Cambodian millennials todrive affordable condominiumsales

20 CONDOMINIUMSECTOR TRENDS

BUYERS

Buyers shifting towards developments that offer sense of community, livability, and walkability

20DEVELOPERS

Developers to face challenges in condominium development as the market become more competitive

The interconnection between developments and projects becomes critical to success

Affordable segment to see upward adjustment due to healthy demand from local buyers

SALE PRICES

Stable sale prices in mid-range and high-end

RENTS

With the increasing supply, rents are expected to face some downward pressure

across all segments;

20 CONDOMINIUMSECTOR TRENDS

20

OFFICE

2009 2019

75 288SQM

ONE BEDROOM

CONDOMINIUM

2009 2019 2009 2019

40SQM

65 45SQM

ONE BEDROOM

SERVICED

APARTMENT

A V E R A G E S I Z E O F D E A L S B Y C B R E C A M B O D I A

2009 V S 2019

SQMSQM

55SQM

SUPPLY 2018 VS 2019

SERVICED APARTMENT SUPPLY: 2018 VS 2019

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F

Grade A Grade B % Change

1,086

1,047

1,179

1,546

Grade A

Grade B

Y-O-Y CHANGE: 2018 VS 2019

2,133Units

2,725Units


27.7% growth

SUPPLY OF SERVICED APARTMENT

APPROX. 3,100 UNITS

H2 2019 COMPLETIONS

A TOTAL OF 234 UNITS ADDED TO GRADE A & B STOCK

KJKS APARTMENT MILLENIAL 360 LYZONE – TOWER C

EXPECTED OPENING IN 2020

• One of Oakwood’s 950+

properties across the region

• Located within One Park compound

• Set to deliver 388 hotel and

apartment units to the Grade A

pipeline

Photo: Oakwood Premier Phnom Penh Facebook Page

Demand from expatriates sees renewed momentum, encouraged by diversification in supply

DEMAND AND

OPERATION

Property management integrates with technology to deliver deeper engagement

RENTS

20 SERVICED APARTMENTSECTOR TRENDS

20

Limited new supply in Grade A segment encourages rent

increases, aided by improving quality and provision of services

5Retail

41

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Shopping Mall Shopping Center

Community Mall Retail Podium

SUPPLY 314,000 SQM

2019

575,700 SQM

202083%

SHOPPING MALL COMMUNUTY MALL

53%

SHOPPING CENTER RETAIL PODIUM

26%

11%

10%

41Source: CBRE Research, Q4 2019

RETAIL MARKET

42

0

50

100

150

200

250

300

350

2017 2018 2019

New Entry Expansion

2019

NEW ENTRIES

REMAIN STRONG

BRAND EXPANSION

SLOWS

42Source: CBRE Cambodia, Q4 2019

RETAIL MARKET

43

15%

3%

63%

15%

4%Fashion

Auto Parts

Food and

Beverage

Health and

Beauty

Service

43

17 NEW F&B BRAND ENTRIES

15 ARE MILK TEA BRANDS

EQUIVALENTS TO 88% OF THE TOTAL F&B ENTRIES

Source: CBRE Cambodia, Q4 2019

RETAIL MARKET SOME NEW BRAND ENTRIES

44

RENOVATION & REPURPOSING

WHO’S NEXT?

SORYA CENTER POINT

B2B MALL

YT MALL

SOVANNA SHOPPING CENTER

YOUNG COMMERCIAL

B0EUNG TRABEK PLAZA

RATANA PLAZA

STEUNG MEANCHEY SHOPPING CENTER

PENCIL SUPERCENTER

44

RETAIL MARKET

More construction delays expected

Professionalisation through internationalisation of operators, asset managers, owners and developers

Lifestyle, wellness and leisure lead the way as malls seek to diversify

Redevelopment of non-retail buildings and renovation of

older retail projects45

2020

RETAILSECTOR TRENDS

6Office

47

OFFICE MARKET

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Grade C Grade B Grade A

CENTRALLY OWNED

SUPPLY

47

2009

58,000+

sqm

2019

370,000+

sqm

534%

53,000 SQM

111,000 SQM

206,000 SQM

GRADE A

GRADE B

GRADE C


48

OFFICE MARKETREGIONAL COMPARISON OF CURRENT SUPPLY

1.3 M

SQM

HCMC

25 X

370,000

SQM

Phnom Penh

9 M

SQM

BANGKOK

3.5 X

Source: CBRE Research

49

OFFICE MARKET

STRATA TITLE

SUPPLY

49

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2018 2019 2020F 2021F 2022F 2023F

Grade B Grade A

3 STRATA TITLE OFFICE PROJECTS COMPLETED

IN 2019 61,500 SQM

82,000 SQM BY 2019303% INCREASE

IN 12 MONTHS

FIRST GRADE A STRATA TO JOIN

THE MARKET IN 2020

177% INCREASE IN SUPPLY IN 2020Source: CBRE Cambodia, Q4 2019

50

OFFICE OCCUPANCY

DESPITE INCREASING

DEAL SIZES

AND

NET ABSORBTION RATES

AVERAGE OCCUPANCY IS

EXPECTED TO FALL BACK DUE TO

SUPPLY INCREASE.

TENANTS INCREASINGLY SEEK

QUALITY STOCK, USING

OFFICE SPACE AS A TOOL TO

ATTRACT TOP TALENT.


60%

65%

70%

75%

80%

85%

90%

95%

100%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F2021F

51

FLEXIBLE SPACE GAINING TRACTION

• Under representation of flexible

offering is an area of opportunity.

• International and home-grown

operators move in.

• Corporates & conglomerates

become tenants.

51

Banking and insurance take the most space, followed closely by flexible workspace operators

Head leasing becomes a major outlet for developer risk

Strata title office developments sees a wave of regulations and a lack of new

launches52

2020

OFFICESECTOR TRENDS

Fit-out contractors start using AI to design workspaces

7Tourism &Hospitality

54

2019: TOURIST ARRIVALS COMPARED TO REGION

Source: Ministry of Tourism, October 2019 & CBRE Cambodia Source: Bangkok Post 54

1.4% y-o-y

6.7 Mvisited

8.1% y-o-y

40 Mvisited

18 Mvisited

Source: Vietnam Ministry of Tourism

16.2% y-o-y

20

09

227% SIEM REAP INT’L AIRPORT

PHNOM PENH INT’L AIRPORT

1.3M tourist arrivals




20

19

136%

Source: Ministry of Tourism

56

RECOGNIZABLE NAMES

HOTELS: PHNOM PENH

3 & 4 Star hotels dominate the market

3

12Hotels

153Hotels

4

2Hotels

135Hotels

5

1Hotels

13Hotels

+1KKeys

20KKeys

2019

200956

Source: CBRE Cambodia

57

2020: DESTINATION & TARGET CHANGE

42.1%Year to October

TOURISTS VISITING COASTAL AREAS

Source: Ministry of Tourism, October 2019

NEW RESORTS TO OPEN

1.4 M2019E

BUSINESS TRAVEL SURGED

2009132K

15M tourists targeted by 2030

INTERNATIONAL BRANDED HOTELS TO COME

Ministry of Tourism of Cambodia eyes 100,000 high class hotel rooms by 2028

Hotel Market: Enough keys for the

future?

57

960%

Source: Ministry of Tourism & CBRE Cambodia

8Industrial

A LOOK BACK AT INDUSTRIAL GROWTH

12,000+ Hectares

$ 500 MCapital2009

2019

6,000+Hectares

$ 1.9 BnCapital

40+ S.E.Z.s

21S.E.Z.s

Source: Council for the Development of Cambodia (CDC) /Cambodian Special Economic Zone Board

KEYINDUSTRIALLOCATIONSIN CAMBODIA

61

LABOUR FORCE

HUMAN CAPITAL

61

MINIMUM WAGES – REGIONAL COMPARISONS (USD/MONTH)

0

50

100

150

200

250

300

Thailand * Cambodia Vietnam * China * Laos Myanmar

USD

Source: ASEAN Briefing, The ASEAN Post, The Diplomat

*The lowest minimum wage rate in the country

China

Thailand

Vietnam

Cambodia

Laos

Myanmar

783.1 M

39.9 M

57.2 M

9.2 M

3.8 M

24.7 M

Source: World Bank

MARC’SFEARLESS FORECAST2020

MARC’S FEARLESS FORECAST FOR 2020

20 Cambodian companies list on the CSX in the next 12 months

1 Government stops imports of secondhand cars4

Cambodian government slashes the number of construction permits to control supply and credit growth

2 Drought, flood, fire, heatwave - all in 12 months5Cashless payment overtakes cash in urban areas6Online gaming makes a

comeback3

CBRE Cambodia employs 200 real estate professionals7

© 2020 Advantage Property Services Co., Ltd, trading as CBRE Cambodia, part of the CBRE affiliate network. All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, includingprojections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independentlyassessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offerto sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior expresswritten permission of CBRE. Any unauthorized publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.

CBRE Cambodia | +855 23 964 099 | [email protected] | www.cbre.com.kh

For more info, please contact:

James HodgeDirectorE: [email protected]: +855 89 333 722

Thida Ann

Managing DirectorE: [email protected]: +855 89 777 308

Kinkesa Kim

Senior ManagerE: [email protected]: +855 95 777 582

Sonic Sovuth

Senior AnalystE: [email protected]: +855 777 982

Kimsea Chea


Kemsokiry Ouch


THANK YOU!

of real estate in cambodia? marc townsend · fdi boosts cambodian economy in 2019 43% 11% 7% 6% 6%...

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