Chairman s Message. Mr. Sung Bonna

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2 Chairman s Message First of all, I would like to express my honor to state speeches. There have been many successes and challenges in our journey, yet we have always been competent enough to surpass them. Over the 17 years, our Company has defined its credentials, established its trust, experience and professionalism, and demonstrated efforts. As an organization, we pursure to keeping our commitment and deliver on our promises. It gives me a great satisfaction in knowing that when I shake hands with a client or partner, every member of my organization is prepared to do what it takes to deliver on our promises. Nowadays, Cambodia is one of the developing countries in ASEAN region with significant investment opportunities for both local and international investors. On the performance of the Cambodian real estate in 2015, we have played a very important role to generate revenue to the country. Regarding to the World Bank estimation, Cambodian GDP was approximately 6.9 % in 2015; with this result, we have seen that the property market price in Phnom Penh in 2015 shared as in compare to the same period in 2014: the office rental supply is 30% increased; retail is about 3% higher; apartments jumped to 35%; condominium came up approximately 78%; Borey is 20% increased. Moreover, if compared with neighboring countries, for investors, Cambodia is a good place with suitable property price, high density and upper return on investment. Ideally, it is considered as a sandwich country between other two countries, in contrast, with high density and property price. For the future warding after ASEAN integration, I am optimistic that Real Estate sector in Cambodia still strong and robust in term of good return on investment, investment incentive from the government and so on. On the way moving into 2016, our aim is to further strengthen our business relationship and build our customer base, and open more branches while still delivering our services to the highest possible standards. We look forward to a great 2016 with our clients, partners and employees; one who will see us increase our profitability. To take this opportunity, I would like offer many thanks to our priceless clients and our dedicated fellows for the trust and commitment they have given us over the past years and we look forward for being your trusted business partner in building and prospering Cambodia economy. We determine to building further on our areas of expertise to continue helping our customers bringing out alive their dreams of owning a home or any property service. At the end, I would like to wish all value clients, partners, investors, management team and all staff of Bonna Realty Group a Happy New Year with four gems of Buddhist blessing for longevity, nobility, healthy, and strength. Mr. Sung Bonna

3 Content Page PART I: GERNERAL ECONOMICS IN CAMBODIA 1.1. GEOGRAPHY AND CLIMATE 1.2. ADMINISTRATION AND DEMOGRAPHIC 1.3. ECONOMICS 1.4. FOREIGN DIRECT INVESTMENT 1.5. TRADE 1.6. CONSTRUCTION INVESTMENT 1.7. TOURISM SECTOR 1.8. TRANSPORTATION NETWORK 1.9. SECTOR DEVELOPMENT IN CAMBODIA PART II: PROPERTY MARKET OVERVIEW IN PHNOM PENH 2.1. OFFICE SPACE MARKET IN PHNOM PENH 2.2. RETAIL MARKET IN PHNOM PENH 2.3. APARTMENT MARKET IN PHNOM PENH 2.4. CONDOMINIUM MARKET IN PHNOM PENHPENH 2.5. BOREY (COMPOUND FLATS AND VILLAS) 2.6. HOTEL IN PHNOM PENH 2.6. HOTEL IN SIEM REAP PROVINCE 2.7. HOTEL IN SIHANOUK VILLE 2.8. HOTEL IN BATTAMBANG PROVINCE 2.9. HOTEL IN MAIN PROVINCES PART III: LAND MARKET PRICE IN MAIN PROVINCE 3.1. LAND MARKET PRICE IN PHNOM PENH 3.2. LAND MARKET PRICE IN SIHANOUKVILLE 3.3. LAND MARKET PRICE IN SIEM REAP 3.4. LAND MARKET PRICE IN BATTAMBANG 3.5. LAND MARKET PRICE IN KAMPONG CHAM COMPANY PROFILE Issue 2016 Page Miss. MOENG SORPHORN, Research Supervisor Has 4 Year experience in social science research field especially in conducting research questionnaire, data coding, analyzing and report writing. She has involved with a lot of research projects for both local and international companies. Background in Quantitative and Qualitative Data Research and Holding BAA of Hotel and Tourism Management also the former assistant of Hotel and Tourism Department; she has been facilitated with academic study and event coordinator. Mr. NGORN NARO, Research Officer Naro gains 2 year experience in social science, graduated from Royal University of Agriculture and Western University, Major of English for Business Communication. He joint Bonna Realty Group in Also, he has compiled many project and report writing. Until now he has obtained many data regarding to market study. Moreover, he has worked and dealt in various conditions with customers, sources, and member of society especially in data collection, data entry, property inspection, and report writing. Mr. HIEN PHALLA, Graphic Designer He has 2 year experience in graphic design. He is every creative in forming new concept for picturing all kinds of artwork. He is well educated and trained about CorelDRAW Adope Photoshop, After Effect, Premiere Pro, Indesign, Flash, Illustrator, Fareworks, Dreamweaver, and Lightroom. He is graduated from SETEC Institute in Major of Management Information System. He joint Bonna Realty Group as a Creative Design in April, Prepared by PAGE 01

4 PART I GENERAL ECONOMICS IN CAMBODIA 1.1. GEOGRAPHY AND CLIMATE Cambodia is situated on the southwestern part of the Indochina peninsular. It shares a 2,615km boarder with Vietnam (1,270km), Thailand (805km), and Laos (540km). Its total is 181,035square kilometers, about half the area of Japan. Cambodia has its own capital city is Phnom Penh (ភ ន ព ញ). Phnom Penh is located in the south-central region of Cambodia, and is fully surrounded by the Kandal Province. The municipality is situated on the banks of the Tonlé Sap, Mekong, and Bassac rivers. These rivers provide freshwater and other natural resources to the city. Phnom Penh and the surrounding areas consist of a typical flood plain area for Cambodia. Although Phnom Penh is situated at meters (39 ft) above the river, monsoon season flooding is a problem and the river sometimes overflows its banks. Cambodia (officially the Kingdom of Cambodia) of 181,035km2. In 2015, the population is 15 It was recording 6.9% of GDP to Ministry of reported to have approved of project proposals, Tourism growth is 4.8 million visitors in ,300 projects; it brought 33% up than The city, located at N E (11 33 North, East), covers an area of square kilometers (262 sq mi), with some 11,401 hectares (28,172 acres) in the municipality and 26,106 hectares (64,509 acres) of roads. The agricultural land in the municipality amounts PAGE 02 Annual Report 2015

5 is located in the south of the Indochina Peninsula in Southeast Asia. Its territory covers an area million covering the 25 cities and provinces. Economic and Finance 2015 report. Although it came to see this slight downturn, the CDC was in Q2 of 2015, from FDI accounted for $3,407.4 million of capital investment, behind 93 projects. Also, the construction sector has increased to $3,300 in capital investment which contributed by Official Name: Kingdom of Cambodia Area: 181,035m² Population: 15,184,116 Male: 48:6% Female: 51.4% Annual Population Growth Rate: 1.54% Density: 78 Languages: Khmer Religion: Buddhist 97% Capital : Phnom Penh Province : 25 Cities: 26 Khans: 8 Districts : 59 Communes: 1,417 Sangkats: 204 Issue 2016 to square kilometers (13 sq mi) with some square kilometers (365 acres) under irrigation. Phnom Penh has a tropical wet and dry climate. The climate is hot year-round with only minor variations. Temperatures typically range from 22 to 35 C (72 to 95 F) and weather is subject to the tropical monsoons. The southwest monsoon blows inland bringing moisture-laden winds from the Gulf of Thailand and Indian Ocean from May to October. The northeast monsoon ushers in the dry season, which lasts from November to March. The city experiences the heaviest precipitation from September to October with the driest period in January and February. The city has two distinct seasons. The rainy season, which runs from May to October, sees high temperatures accompanied by high humidity. The dry season lasts from November to April when temperatures can drop to 22 C (72 F). But temperatures can approach 40 C (104 F) in April. The best months to visit the city are November to February when temperatures, humidity and rainfall are lower. PAGE 03

6 1.2. ADMINISTRATION AND DEMOGRAPHIC Phnom Penh is a municipality of area square kilometers ( sq mi) with a government status equal that of Cambodian provinces. The municipality is subdivided into twelve administrative divisions called Khans (districts) and of these twelve Khan 7Makara, Khan Daun Penh, Khan Chamkarmon, Khan Toul Kork are consist of city center, and Khans, Dangkor, Meanchey, Sen Sok, Russei Keo, Porsen Chey, Chroy Chong Var, Chbar Ampov, and Prek Pnov are considered the outskirts of the city. All Khans are under the governance of the Phnom Penh Municipality. The Khans are further subdivided into 96 Sangkats (communes), and 909 Village. The municipality is governed by the Governor who acts as the top executive of the city as well as overseeing the Municipal Military Police, Municipal Police and Bureau of Urban Affairs. Below the Governor is the First Vice Governor and 5 Vice Governors. The Chief of Cabinet, who holds the same status as the Vice Governors, heads the Cabinet consisting of 8 Deputy Chiefs of Cabinet who in turn are in charge of the 27 Administrative Departments. Every khan (district) also has a head Chief. As currently, Phnom Penh had a population approximately 1.6 million people living in permanent and 800,000 people staying and working with a total population density of 2,287 people per square kilometer in city area. The population growth rate of the city is 3.15%. The city area has grown fourfold since 1979, and the metro area will continue to expand in order to support the city s growing population and economy. Phnom Penh is mostly inhabited by Cambodians (or Khmers) they represent 90% of the population of the city. There are large minorities of Chinese, Vietnamese, PAGE 04 and other small ethnic groups who are Thai, Budong, Mnong Preh, Kuy, Chong, and Chams. The state religion is Theravada Buddhism; more than 90% of the people in Phnom Penh are Buddhists. Chams have been practicing Islam over the years since There has also been an increase in the practice of Christianity which was practically wiped out after 1975 when the Khmer Rouge took over. The official language is Khmer, but English and French are widely used in the city ECONOMICS The Cambodian economy maintained a high growth of more than 10% for four consecutive between years , with the record high of 13.3% in Although the GDP growth rate dropped to 0.1% in 2009 as the result of world economic recession, it recovers to 6.0% in 2010 and 7.3% in 2012 mainly through its renewed exports and tourism sector. According to the MEF s forecast, the growth rates are estimated to be approximately 7.6% in the year of Per capita GDP has also steadily increased since 1998 when the Riel greatly depreciated again the dollar. Per capita GDP in 2011 reached USD 911, an increase of approximately 87.1% from Annual Report 2015

7 USD 487 in It was reached USD 990 in 2012 and USD 1,036 in 2013 respectively to the MEF s forecast. In 2015, the GDP was slightly decreased from 7.00% to 6.90%. Figure1: Trend of GDP Annual Growth Rate Source: Ministry of Economic and Finance 1.4. FOREIGN DIRECT INVESTMENT Investment projects, which are approved by the Council for the Development of Cambodia (CDC) to be granted investment incentive and guarantee, consist of projects by Cambodian capital and those by foreign capital. Those projects are called Qualified Investment Projects (QIPs) under the Law on Amendment to the Investment of In 1995, one year after enactment of the Law on Investment 1994, the fixed asset investment amount approved by the CIB (CDC) totaled 2.3 billion dollars. From 1994 to 2006, the annual average of twelve year was 932 million dollars, and during the following five years ( ) the average amount became approximately 6.2 Issue 2016 time larder as 5.8 billion dollars. In 2012, the fix asset investment amount approved by the CIB (CDC) reached 1.5 billion dollars. From the 1994 to 2012, the cumulative investment approved by CIB (CDC) is about 46 billion dollars. The FDI ratio among the total investment amount approved by the CIB (CDC) between 1994 and 2006 was approximately 64%. Such FDI ratio dropped to approximately 36% in 2009 and increased to 85%. Consequently, overall FDI ration was approximately 63% of the total approved investment amount from 1994 to As for the composition by industrial sector, tourism sector accounts for 47% of the cumulative investment amount as of September of 2012, while the amount of investment in the tourism sector has been changing drastically every year owing to the presence or absence of large scale investment project and high amount approved in Investment in industries has been increasing gradually from 2006 to Investment amount in the agriculture sector has remained stable except for Investment in the service sector was dropped in 2009 due to the decrease of investment in the construction sector damaged by the economic crisis, but recovered in By 3rd quarter 2015, we noticed that there are 93 Projects that CDC has been approved that equal the 3,407.4million USD Dollars on the Agriculture, Industrial, Service and Tourism. Among the 4 Sectors, Industrial was the major sector that investor invested in Cambodia. PAGE 05

8 Table 1: Trend of GDP Annual Growth Rate Figure 2: Number of Project Approval and Capital Investment in Q Source: National Bank of Cambodia PAGE 06 Annual Report 2015

9 1.5. TRADE The trade performance of Cambodia had shown the increasing trend over until While the trade volume dropped in 2009 due to the global financial crisis, it has been recovering since Cambodia continuously records a trade deficit. After the gap suddenly widened in 2005, it has been relatively stable at around USD billion per year between 2006 and The amount of export in 2012 exceeded to 5.5 billion USD increased by 17% from 2011, while the import amount is estimated to increase by 23% in 2012 reaching 8.14 billion dollar. Cambodia s exports have continuously shown a steady growth up to the present, except According to the MEF s statistics, exports reached approximately 5.5 billion US dollars in The GSP export component, the main product, the garments, for two major exporting markets US and EU, occupies the large share among three components and accounts for approximately two/third of total exports. Although GSP export decreased in 2009, it has been back to the growth trend in 2010 to Export of the other products also shows the similar tendency. On the other hand, re-export products continuously increased from 2006 until Currently, Cambodia saw trade balance of 15.9 billion U.S. dollars in 2013, according to a Commerce Ministry s report approximate increase 18% compared to 2012 which has trade balance approximately 13.4 billion USD. Regarding to the report for the last Figure 3: Export and Import Product 11 months in 2013, the country s total imports were valued at 9 billion U.S. dollars during the period, 14% from the 7.9 billion U.S. dollars for the same period last year, showed statistics by the ministry s Import-Export Inspection and Fraud Repression Department. Export rose by 26 percent to 6.9 billion U.S. dollars worth. Among the country s main trade partners are the United States, European countries, China, South Korea, Japan, Thailand, Vietnam, Singapore and Malaysia. According to this report in the last 11 months of 2013 Cambodia has exported approximate 2.57 billion USD to USA with very little import from this country approximate 214 million USD. Cambodia has also decreased imported from Japan around 10.4% but we have increased export up to 545 million USD approximate 45%. Cambodia has exported on some field such as Garment, Rice, Rubber, Pepper, and we have imported such as Oil, Construction material, Vehicle, and some other raw material. In 3rd Quarter 2015, International Business Product showed a deficit of KHR billion (25.4%) in September 2015, from the deficit of KHR 824 billion (21.2%) in August The decreasing is from the major point of the increasing total product import. The major components of total exports were Garment, Footwear, Rubber, and Textile. And the major components of total imports were Petroleum, Vehicles, Steel, Gold, Motor Bikes, Construction Materials, Cigarettes, Cement, Clothing, Beer, and Cloths. Source: National Bank of Cambodia Issue 2016 PAGE 07

10 1.6. CONSTRUCTION INVESTMENT According to the report from Ministry of Land Urban Planning and Construction has stated that; The Construction Investment in 2014 has about 2,500 Million US. Dollars with the total number of project about 1960 Projects that cover on the total land size 5, sq.m and the capital investment 2,500 million dollars if compare to 2013 there has 1,641 projects construction with the capital investment 2,773 million dollars. Whereas, the data from Ministry of Commerce of Cambodia has stated that, the quantity import of construction equipment from abroad st to Cambodia in the 1 semester 2014 has 1,2 million ton compare to the same period in 2013 only 43 million ton. In the 1stsemester 2014 the construction equipment has worth 229 Million US. Dollars while in 2013 has 223 Million US. Dollars, 2,3% increased. Moreover, capital investment on residential development in Cambodia in the 1stsemester 2014 has 1,000 Million US. According to data of Ministry of Land Management Urban Planning and Construction has stated that, the residential project development in Cambodia has been increased 252,8% in the 1stsemester 2014 with the total number of unit house 6,346 equal 952 Million US. Dollars compare to the same period in 2013 had 3,867 units house equal 296 Million US. Dollars. By 2015, the capital construction increased to 3,338,000,000 million dollar equal 2,305 projects approved by ministry of land management urban planning and construction. Compared to the same period in 2014 was 33.14% increased. Top 10 leading countries of Construction Investment in Cambodia are; South Korea, China, England, Thai, Russia, Japan, Malaysia, Taiwan, India, and Vietnam. Figure 4: Capital Investment from Source: Ministry of Land Management Urban Planning and Construction PAGE 08 Annual Report 2015

11 1.7. TOURISM SECTOR A total of twenty international border check points involving two international airports, fifteen land international border check point, and three international ports have collected monthly on international tourist arrival to Cambodia for International tourist arrivals to Cambodia witnessed 4.21 million with an increase of17.5%, up from 3.58million in 2012, which showed a sharp increased again after Seven years of moderate percent. Asia and the Pacific saw the highest growth of all regions with 19.2%, while by sub-region; the arrivals from ASEAN member countries reached +21%, Europe +14.2, America +7.7%, Middle East +3%, and Africa 4.9%. Consequently, Cambodia tourism receipts improved significantly at USD 2,547 million USD for The average expenditure of tourist was high at USD per day. According to Ministry of Tourism, Cambodia has forecast that by the end of 2015, Cambodia would attract around 4,8 million tourists to visit in Cambodia. Figure 5: Number of Tourists Arrival to Cambodia in Top 10 Tourism Arrival for 11 months of ,000, ,500, ,000, Tourist Arrivial 3,500, ,000, ,500, ,000, ,500, ,000, , Source: Ministry of Tourism, Cambodia Issue 2016 PAGE 09

12 1.8. TRANSPORTATION NETWORK: ASIAN HIGHWAY: CAMBODIA Cambodian Transportation Network comprises land, river, seam and air. Whereon, land (roads) is the main network, which is covered not only the activities, but also the length. A Cambodian road network is part2of the Asian Highway (AH) No.1, No.11 and No.123. AH No.1 is the longest route of the Asian Highway Network, running 12,845 miles (20,557 km) from Tokyo, Japan via Korea, China, Southeast Asia, India, Pakistan and Iran to the border between Turkey and Bulgaria west of Istanbul ROAD NETWORK: The statistics of 1970 indicated the Road Network of Cambodia as follows: - Road Nº 1: The origin road stretches from Phnom Penh to Bavit via Neak Leung and Svay Rieng Province in the distance of 167 Kilometers. - Road Nº 2: The origin road stretches from Phnom Penh to Phnom Den via Ta Khmao and Takeo Province in the distance of 137 Kilometers. - Road Nº 3: The origin road Stretches from Phnom Penh to Sihanouk Ville via Kampot Province in the distance of 260 Kilometers. - Road Nº 4: The origin road stretches from Phnom Penh to Sihanouk Ville via Kampong Speu Province in the distance of 232 Kilometers. - Road Nº 5: The origin road stretches from Phnom Penh to Oh Chraut via Provinces of Kampong Chhnang, Pursat, Battambang and Bonteay Meanchey in the distance of 408 Kilometers. - Road Nº 6: The origin road stretches from Phnom Penh to Bonteay Meanchey via Preak Kdam and Provinces of Kampong Thom and Siem Reap in the distance of 386 Kilometers. - Road Nº 7: The origin road stretches from Phnom Penh to Mondulkiri Province in 543 kilometer distance via Snoul and stretches from Skun to Mondulkiri provice in 403-kilometer distance by Sam Linh Road. Picture 2: Asian Highway Picture 3: ASEAN Highway in Cambodia BRIDGES: There are totally 4,027-varied bridges stretching on the National Roads. From 1994 to the present, Roads consist of: - 4,235-kilometers National Roads - 3,675-kilometers Provincial Roads Tsubasa Bridge PAGE 10 Annual Report 2015

13 Table 2: Key Bridge Development in Cambodia In compound with poor rail infrastructure and the improvement of road, bridge and the improvement of security (civil war ended in 1998), there was a decline of rail usage by the public particularly passenger service. It was declined over the year and regular service ended in Derailment of train in operation was not in frequent. Without adequate fund to maintain track, even though the new diesel-electric locomotive imported from China could not run due to dilapidated condition of the tracks. To improve rail service in Cambodia, the government had awarded a contract to Toll Holdings to manage the rail service once the reconstruction of the tracks is completed. Both North and Southern line (links to Poi Pet and Sihanouk Ville respectively) will be re-opened in RAILWAY: Source: MPWT French Colonial Government in Cambodia built the first railway of 1 meter gauge linking Phnom Penh to PoiPet (through Kampong Chhnang, Pursat, Battambang and Sisophon) on the Thai border in 1930s. This line is running across Cambodia s greatest rice producing province Battambang. The Phnom Penh Railway Station inaugurated in 1932 whereas the connection with Thailand Railway was made in 1942, whose service later interrupted in late 1940s due to political and security reasons1.in 1960s in order to reduce the reliance on ports in then Australia2, South Vietnam (Saigon) and Thailand(Khlong Toei), Cambodia, with support from France, West Germany and People s Republic of China, began to construct second 1 meter gauge railway line linking capital Phnom Penh to Sihanouk Ville port. Rail service ceased during the civil war in 1970s and it started to provide limited service from 1980s despite limited funding, scare resource, poor structure and security threat from the Khmer Rouge and other armed group. Issue FUTURE DEVELOPMENT PLAN The Royal Government of Cambodia is also considering a supplementary financing arrangement with the ADB and a Grant from Aus AID, which will provide funding for new station construction in Samrong (9km from Phnom Penh) and additional upgrading of the railway including branch line to Green Trade Warehouse (6kmfrom Phnom Penh) and Northern line. According to the plan, the rehabilitation work will be completed in2013: Updating and implementation of the resettlement plan for Samrong (to be completed in mid 2010) Design and construction of new freight facility in Samrong (to be completed in March 2013) PAGE 11

14 Design and construction of the new spur lines to freight terminals in Phnom Penh (to be completed in March 2013). Another railways line had also been envisioned: Tbaeng Meanchey (PreahVihear) to Sihanouk Ville (through Kampong Thom, Skun, Bat deung and Phnom Penh). The primary purpose of this road is to export mine particularly iron ore from mineral rich province of Preah Vihear to the world through Sihanouk Ville port. Sisophon to Siem Reap. The total length f this line is 105km Siem Reap to Skun through Kampong Thom. The total length of this line is 239km Snuol to Lao P.D.R border through Kratie and Thalaborivat (Stung Treng) provinces. The total lengthof this line is 273km operated the domestic airports. On 27 July 2009, Cambodia Angkor Air was inaugurated by Samdach Hun Sen Prime-minister of Cambodia and this is a second national airline was conduct in Cambodia. Table 3: Domestic Airlines AIR Table 4: International Airlines Cambodia has two international airports: The 1 st is Pochentong International Airport (the old name) now is called Phnom Penh International airport which can withstand all types of planes and 2 nd is Siem Reap International Airport. The both play an active role in carrying National and International tourists to the province of Siem Reap, the home of Angkor complex that is the world heritage. The airports have been renovated and reconstructed by French Investment Company. Besides, the International Airports there are other 6 domestic airports, which are located in the provinces of Koh Kong, Battambang, Stung Treng, Ratanakiri, Mundulkiri and Sihanouk Ville. The Angkor Airway, Siem Reap Airway, PMT Air and Royal Khmer Air have Source: Annual Tourism Statistics Report 2014 PAGE 12 Annual Report 2015

15 FUTURE AIRPORT DEVELOPMENT Cambodia, there may be a new international airport in 2035, which the project estimated to spend about US $ 300 million, after the government planned a depth study on this new airport, instead of the Phnom Penh International Airport. This can be launched according to the land usage master plan document, Phnom Penh 2035; it was approved by the Council of Ministers in a plenary session on December 11, Phnom Penh International Airport Plenipotentiary till 2020: Phnom Penh International Airport today can meet demand until 2020 and the expected growth of tourists will rise to 7.5 million by the same year. It should be reminded that in late October 2012, Samdech Prime Minister Hun Sen has announced plan of building a new airport in Kampong Chhnang province during 2025 or 2030, which will replace the Phnom Penh International Airport. it also underlined that the Phnom Penh International Airport has been travelled through for an estimated 3 million people in 2015 and is expected to grow about 4,002,000 individual in WATER: The above document emphasized reasons Cambodia plans to build a new international airport for: Small Size Airport: Nowadays, the current airport is serving approximately 1 million passengers per year, which is relatively smaller compared with other international airports in the region. Passenger growth: In 50years number of passenger could jump up to 5 million per year (an increase of 5 to 7 percent). For instance, in 2015, Cambodia received 4.8 million visitors, up from 2014 (accounting for 4.5 million people) Near the city and industrial zone: the new international airport is located within a distance of approximately 90 kilometers and can be an easy travelling facilitated by - speedy trains and the Auto Road, Safety Flight Ensuring: the new International Airport will add new arrangement allocated to the port cargo, warehouse and terminal equipment, to ensure the safety of flights flown. Issue 2016 Geographically, Cambodia has a shape as the bottom of a pan and is rich in water system, which has been classified into 3 categories: Mekong River system, Tonle Sap system and waterways at the gulf. A- MEKONG RIVER SYSTEM: The Mekong River system of Cambodia comprises of the rivers of upper Mekong and lower Mekong (Lobakhoan to Kaorm Samnor), Basac River (110Km) and all branches of the Mekong River. The Mekong River is the magnitude of 800,000 square kilometers surface where flows from the Upper Tibet source of 5,000 kilometers and flows through the countries of Laos, Thailand, Cambodia and Vietnam. In Cambodia, the Mekong River flows from Loba Khon (the border of Cambodia - Laos) to the border of Cambodia - Vietnam through the provinces of Steung Treng, Kratie, Kampong Cham, Kandal and Prey Veng in 500-kilometer distance. PAGE 13

16 - Water Form of the Lake of Tonle Sap: During the rainy season, from June to October, the lake of Tonle Sap filled by water flowing in the direction from Phnom Penh to Kampong Chhnang. The Lake has its deepest Depth of 14 Meters and has its possible surface of 10,000 square Kilometers. During the dry season, from November to May, the Lake of Tonle Sap has its Depth from 0.8 Meter to two Meters and its surface of 3,000 square Meters which the water flows out of the Lake of Tonle Sap in the direction from Kompong Chhnang province to Phnom Penh. The phenomenon of out-in flowing occurs because of the level of Mekong River and its flow, are higher than the lake of Tonle Sap. - Main Branches of the Lake of Tonle Sap: Are the rivers of Treng, Siem Reap, Chi Kreng, Stong and Sen located at the Eastern Bank, and the rivers of Serey Sophan, Mokol Borey, Sangke, Mong (Doun Try), Svay Daun Keo, Pursat, and Boribo located at the Western Bank. B- TONLE SAP SYSTEM: The Tonle Sap system comprises the river of Tonle Sap and the lake of Tonle Sap. - The River of Tonle Sap: The river stretches from Phnom Penh to Kampong Chhnang province in the distance of 100 Kilometers. - The Lake of Tonle Sap: The lake of Tonle Sap has 150-kilometer length and 32-kilometer width, and has been classified into three parts: The Great Lake: Has 75-kilometer length and 32-kilometer width The Small Lake: Has 35-kilometer length and 28-kilometer width The Muddy Area: Rich in small islands, this lasts from Chhnuk Truh to Kampong Chhnang province. C- THE GULF SYSTEM: Mainly, the waterways of the gulf are short and flow from the mountain of KroVanh to the gulf. The flows of the water are strong and seem to be the waterfalls. During the rainy season, the waterways cause a short flood to the nearby. Also, the water from of this area affected by Monsoon, which causes some rivers dried in the dry season. The rivers of Me Teuk, Taki, Chiey PAGE 14 Annual Report 2015

17 Areng, Chi Phat, Kam Pong Som, Kampot and Tuk Meas are the main waterways in this area are PORTS: 1). Phnom Penh port The Phnom Penh port is the country s traditional river port, accessible to vessels from the South China Sea through Vietnam. Phnom Penh port is located in the city, on the Sap river some 3-4 km from its junction with the Mekong. It is some 348 km from the mouth of the Mekong of which about 102 km is in Cambodia and the rest in Vietnam. The distance from Singapore is about 1,450 km. Vessels of up to 2,000 DWT-can use the route without difficulty, and 5,000 DWT boats can pass the entrance to the Mekong (the Main bottleneck) on favourable tides. Regular dredging is necessary at three points in Cambodia for the 5,000.DWT vessels to reach Phnom Penh. The port serves up to 150 ships per year, including 3 Singapore- based cargo vessels which take days for the return voyage. Phnom Penh Port is under the management of state enterprise supervised by MPWT and Ministry of Economy and Finance. This autonomous enterprise was established by Sub-Decree 51, dated 17 July ) Sihanouk Ville port The Port of Sihanouk Ville, situated in mouth of the Bay of Kompong Som, is the principal and only deep-water maritime port of the Kingdom of Cambodia. Kompong Som s natural advantages include deep water inshore and a degree Issue 2016 of natural protection from storms provided by a string of islands across the mouth of the bay. The port was built in 1959 with a total capacity of 1.2 million encompassing the old French-built wharf and adjacent new facilities. The capacity of Sihanouk Ville port, in its present condition, is estimated at about 950,000 tonnes per year, excluding POL which has separate facilities. This is about twice its present traffic. The port can accommodate ships of 10,000 Dead Weight Ton (DWT).The main access to the port is via a 5 km fairway channel, marked by buoys and leading lights for daylight navigation only. Due to rocky outcrops in the channel, the entrance to the port is restricted to vessels with a draft of less than 8.5 m. In practice boats of up to about 10,000 DWT can use the port. The port is located 540nautical miles (1000 km) from Singapore. On the land side, the port is served by NR4, NR3 (To Phnom Penh) and NR48 (To Koh Kong) and the railway SL, completed in 1969, which takes a more southerly route via Kampot. Roads within Sihanouk Ville municipality itself are all hard surfaced, albeit of somewhat lesser quality and poorer condition than NR4. 3). The Dry Port In 1993 Slhanouk ville port suggested the concept of an inland clearance depot ( dry port ) in the Phnom Penharea. Containers arriving in Sihanouk Ville could be taken by road or rail to the dry port for customs clearance, saving time and reducing inconvenience for customers based in Phnom Penh. In October 1994, it was announced that the project would go ahead under a join venture agreement with a private Singapore company. Soon after several more dry ports had been constructed by privately own companies under the scheme of Build Operate Own (BOO) to help facilitate the maritime transportation. PAGE 15

18 4) Maritime Port Beside Sihanouk Ville port located in newly established Sihanouk Ville province, Cambodia maritime ports located mainly in Koh Kong and Kampot provinces SECTOR DEVELOPMENT IN CAMBODIA AGRICULTURE Agriculture remains the most important sector of the Cambodian economy in terms of its share of the gross domestic product (GDP), and it employs the vast majority of the workforce (77%). Rice is Cambodia s major crop, its principal food, and, in times of peace, its most important export commodity. With this intention, Cambodian Government has issued the new strategy which shall produce about 1 million tons from 2011 to Therefore, the agriculture field is very important because in the government s vision to moderate and extend the productivity of rice crop achieve the plan. It is depend on the original resource such as; land resource and nature resource. Usually, Cambodian famers plant and cultivate the crop by traditional style, but government tried to educate farmer to use the modern and technology with high standard fertilizer INDUSTRY This sector focuseson manufacturing, Textile, Apparel & Footwear and Construction. Among Industry, the Textile, Apparel & Footwear and Construction which occupied 76% share in 2007 hasbeen the major players for fast growth of the sector. These subsectors, however, were seriously affected during the financial crisis of Political tensions that followed last year s Cambodian national elections have abated in recent months, and labor unrest in the garment industry eased after the minimum monthly wage for garment workers was raised in February this year. These developments are expected to lift investor confidence. This Update retains the Asian Development Outlook (ADO) 2014 forecast that gross domestic product (GDP) growth will ease to 7.0% this year before picking up in Industry sector was expected to go up by 9,6% this year, agriculture by 2,6%, service sector by 7,5%, hotel and restaurant sector by 14 percent, financial sector by 12 percent, and real estate by 11 percent SERVICE This sector focuses on Trade, Hotel & Restaurant, Transport & Communication, Real Estate, Business and Other Services. Services occupied 38% share in GDP in 2011 with heavy dependency on the Trade and Transport & Communication. Hotel & Restaurant which have benefited from tourism PAGE 16 Annual Report 2015

19 and infrastructure development remained high growth ratio constantly until 2011 except for While the growth rates of Real Estate and Business were sharply dropped to 2.5% in 2009 and 5.8% in 2010 due to world economic crisis of 2008, the rate recovered to 5.1% in Cambodia s service sector has seen significant growth in recent years, but the sector remains hampered by challenges, according to a report by the Asian Development Bank (ADB). However, inadequate supporting infrastructure, such as transport and basic utilities, the high cost of electricity and inadequate implementations of policies, laws and regulations and bureaucratic Issue 2016 procedures hamper the sector. Tourism grew at a more gradual pace, largely because tourist arrivals to neighboring Thailand declined. Tourist arrivals to Cambodia rose by 5.2% to 2.2 million in the first half of 2014, against a 19.1% rise in the year-earlier period. Other available data show that growth in credit to the private sector was 12.0% year on year in June 2014, well below the expansion rate of a year earlier. In 2015 the number of tourist arrival to Cambodia has 4.8 millions. PAGE 17

20 PART II PROPERTY MARKET OVERVIEW IN PHNOM PENH OFFICE SPACE MARKET IN PHNOM PENH 2.1. OFFICE SPACE IN PHNOM PENH increased. The new market supply of office spaces for 2015 are; GT Tower, Anina Building, Heng Asia Building, HSBG Business Center, Office Building next to The Icon Building and some other buildings will be entered to the market by the early of 2016 such as; Emerald Building and other buildings along street 271. Figure 6: Office Space in Phnom Penh Figure 5: Office Space in Phnom Penh Base on our study of office space has found that there are almost 307,000 sq.m supplying on the current market and those supply will jump up to more than 355,000 sq.m by 2018, assuming the current under construction projects completed as scheduled. Comparing to the same period last year, we ve found that almost 30% PAGE 18 Annual Report 2015

21 GT Tower, Anina Building, Heng Asia Building, HSBG Business Center are the new supplied in 2015, Totally 307,000 sq.m supplying on Office Space Market 82% Occupancy Rate (5% Slighly Decrease Compared to 2014) 2.2. SUPPLY BY LOCATION Location is the main point for business situated. Often, we have seen that mostly offices buildings stand along main roads which easily to access and look for. As we have found along Monivong, Norodom, Mao Tse Tong Blvd, Russian Confederation and St 271 are unified by office buildings. Chamkarmorn is the majority location of office building among 11 others district in Phnom Penh. Because of the prime location with all types of firms located, ministries, embassies, organizations, banks, international schools, shopping center, private companies etc.., has lead this location to be well known. Issue 2016 Sum up, 94% office building located in CBD while another 4% based at outskirt area. Figure 7: Supply by Location PAGE 19

22 2.3. CURRENT SUPPLY BY GRADE The Grade A office buildings present supply are Vattanac Tower, Canadia Tower and Phnom Penh Tower. Those buildings are the main supply in Phnom Penh, which provides more than 80,000 sq.m of net able area while another 220,000 sq.m of grade B and 4,500 sq.m of grade C are the existing market. Totally, almost 307,000 sq.m of office space are supplying on the market. Figure 8: Current Supply by Grade 2.5. RENTAL PRICE IN SQ.M The office price bases on its grade. In Phnom Penh office building grade A are Vattanac Tower, Canadia Tower and Phnom Penh Tower. Among grade A office, Vattanac is one of the most interesting office supplies 34,000 sq.m, launched to the market in Comparing to the previous year, rental price for grade A office remains the same but grade B has slightly changed because some offices has renovated its body to attract tenants while some buildings has decreased their rental price to lure customers as well. According to our research, the average rental price per month is classified as: grade A - USD20.00 to USD38.00, grade B -USD8.00 to USD20.00, and grade C -USD5.50 to USD Noticeably, the above rental price is excluded management fee and electricity or other expenses SUPPLY GROWTH BY YEARS The year between 2000 and 2009, the construction activities significantly increased due to FDI flowed to Cambodia. In 2015, the construction capital investment in Cambodia has almost 3,338,000,000 million dollars equal 2,305 projects, Ministry of Land Management Urban Planning and Construction (MLMUPC) Cumulated since year 2000 to present, the supply has reached to almost 307,000 sq.m while 2018 there will expect to increase at least 355,000 sq.m, 16% up. Additionally, the management fee is offered in average per sq.m marked up from monthly rental fee around like: USD4.50 to USD5.00 for grade A and USD2.00 to USD4.00 for grade B. To underline that management fee is paid for maintenance service, lifts, public cleaning etc. Figure 10: Rental Price by Grade Figure 9: Supply Growth by Years PAGE 20 Annual Report 2015

23 2.6. TAKE UP RATE Since the economic recovery in 2010, all sectors development started going up from year to year (Y-o-Y). As the growing supply leaded the occupancy rate changed; for example, the giant, Vattanac Capital, entered to the market in 2014 has brought a huge supply to increase. Another reasons with diversifies for office rentals, flats, villas, shophouses were also replaced by office buildings as well. Apparently, some companies prefer renting an individual flat or villa to run a business while small companies try of save cost by tenanting in any office building. By the end of 2015, there are many office buildings set its sight to the market like; GT Tower, Heng Asia Building, Anina Building, the office building next to The Icon and some buildings along St 271. Those buildings have caused the occupancy rate slightly decreased. Through our survey, grade A office space hold 83% of take up rate, while grade B hold 81% and grade C hold 90%. Wholly, office space s taken up rate 82% in 2015, compared to the same period in 2014 is inconsiderably decreased around 5%. Figure 11: Take Up Rate Issue 2016 PAGE 21

24 Many New Supply Has Lead The Take Up Rate Decline RETAIL 3.1. RETAIL Parkson Store will Enter to Cambodia s Market Soon PAGE 22 Annual Report 2015

25 MARKET IN PHNOM PENH IN PHNOM PENH Since Aeon Mall inauguration, mega retail store in Phnom Penh has changed its prestige and Cambodia as a whole. Aeon Mall stepped to Cambodian market in the mid of This shopping centre has brought a lot of attraction of not only people living in Phnom Penh but also provinces due to its various amenities such as; many kind of restaurants, cinemas, children s playground, gambling, boiling, ice skating, clothes shop, footwear shop, bags shop, baby products, TV studio, sport products, many type of brand products, etc. Currently, Cambodia has 14 retails store operating in the market while among them, Aeon Mall, Sorya Shopping Center, Sovanna Shopping Center, City Mall, and Pencil are more popular. Meanwhile, we have seen many other projects development such as Condominiums and Borey also comprise with retails store which daily offers more convenient and makes life easier for tenants. For example, the mix used projects with which retail stores comprised are The Bridge, Skyline, Sky31, Olympia City, D.I Rivera, Diomond One, Casa Meridian, Borey New World (La Sen Sok), Borey Peng Houth (Platinum Mall), Orkedee Villa, and Exchange Square Building. Sum up, currently many projects mostly apply for mix used development projects as the age of modernization. Figure 12: Retail in Phnom Penh Issue 2016 PAGE 23

26 3.2. SUPPLY BY LOCATION Not surprisingly, location is the most concerned to developing any project. Actually, Daun Penh district is absorbed by many retails store like; Sorya Shopping Center, Golden Sorya Mall, Paragon, Pencil, Canadia Mall and Vattanac Mall. In a short future ahead, Exchange Square, a mixed-use development project by Hongkong Land, will become a new supplier in the district comprising around 13,000 sq.m of retail store. Following by Meanchey district, there has two bigger supplies of retail stores, Sovanna Shopping Center and Stoeng Meanchey Thmei and a pending project under 999 Developer, Moscow City. Being similar with Meanchey district, Chamkamorn is stood supply from Aeon Mall and Boeung Trabek Plaza. As schedule by 2018, this district will be presented 4 more retail suppliers comprised in Casa Meridian, D.I Rievera, Diamond One and The Bridge. Figure 13: Supply by Location 3.3. SUPPLY GROWTH BY YEARS First launched retail store in Phnom Penh was Sorya Shopping Center in 2003, the most successful supermarket in Cambodia almost a decade. It attracted a large number of visitors and customers back then. However, another new supplier has entered since 2013 to retail market, TK Avenue, and also lured a great deal of youth to entertain with brand products shopping, eating in restaurants, going to cinema and taking photographs with new concept design of this boutique mall. Obviously, in 2014, it came another mega project from Japan developer, provides 66,000 sq.m of retail spaces, Aeon Mall. This has changed retail market s face in Phnom Penh to be more interesting. This shopping center has brought numerous international retailers to Cambodia like; Levi s, Adidas, VNC, Mango, Penshoppe, Giordano, Clarks, Bonia etc. In the short period of 2016, we expected that Parkson Store will be completed its own project as scheduled. Currently, total supply is almost 370,000 sq.m, yet the 2018 supply will reach to around 850,000 sq.m accumulated with the existing supplied, comparing to the existing supplies is 130% increased. Figure 14: Supply Growth by Years 3.4. CURRENT SUPPLY BY GRADE Nevertheless, Sorya and Sovanna Shopping center used to be the grade A retail store in Phnom Penh. Now the replacing is made by Aeon Mall due to its brought-in of many new amenities, creative designation, diversified of brand products and restaurants comparing to the both existing retails store. Currently, total supply of retail store comes up almost 370,000 sq.m. Surrounded by that number, the total market sharing by grade is: grade A 26%, grade B+ 22%, grade B 32% and grade C 20%. Figure 15: Current Supply by Grade PAGE 24 Annual Report 2015

27 3.5. FUTURE SUPPLY BY GRADE Even though currently grade B+ is leading retail market, it will be substituted by grade A in the short term of It is the result of some mixed-use development projects has completed their project by then. Thoroughly, the supply will be approximately more than 850,000 sq.m with which involved grade A 68%, grade B+ 9%, grade B 14% and grade C only 9%. Figure 16: Future Supply by Grade 3.6. RENTAL PRICE IN SQ.M As can be seen, retails comprised with office space are more expensive than retail mall. We have categorized retail mall as grade A like; Aeon Mall, Canadia Mall, Vattanac Mall and TK Avenue Boutique Mall; they are international retailers. Grade A rental price ranges from USD to USD /sq.m; grade B+ ranges from USD to USD 40.00/sq.m; grade B ranges from USD to USD 30.00/sq.m; grade C ranges from USD 7.00 to USD 16.00/sq.m. The rental price itself bases on the space size, location, and floor level. Nowadays, the common practice on new retail project s rental fee, additional charging, could be focus on monthly sales revenue or profit from tenants; for instance, Aeon Mall. Noticeably, rental price are excluded the management fee, utility expense or tax payment. Despite some retail malls include the rental fee with management fee, utility expense and tax payment are still the additional charging. Figure 17: Rental Price Per Sq.m 3.7. OCCUPANCY RATE Two main reasons leaded the occupancy rate decreased. Firstly, the growth index of supply and customers declining, secondly. Commonly, people would like to try or taste something new. They prefer to go to different places, look for creative design, new entertainment styles etc. They may somehow feel bored to go the same place with nothing new or able to excite them. To maintain their competitiveness given the new market standards, some existing retails are undergoing repositioning work in an effort. Through our observation, some local retail malls are facing to the fall down of tenants/ customers and it can be closed sooner. As a result, retail owner could re-consider with the rental price, building renovation, rebranding tenants, or adding more amenities to attract or maintain their tenants and customers. Moreover, those building might be renovated to be office space or sub-lease to other developers in the future. Overall, take up rate in 2015 is 10% decreased, compared to the same period last year. Figure 18: Occupancy Rate Issue 2016 PAGE 25

28 APARTMENT MARKET IN PHNOM PENH 4.1. UNIT SUPPLY BY LOCATION Not surprisingly to add that Chamkarmorn district is the leading location for residential development in CBD area. This prime location is popular for investment due to tenants highly demand with highly return on investment. Our research revealed that number of units has reached to over 6,000 units while 2014 had only 4,000 units plus. Among total supplies in Phnom Penh, Chamkarmorn district has absorbed most unit supplies number, approximately 3,400 units of total market share. Standing after Chamkarmorn district, Daun Penh district has also absorbed around 840 units and Toul Kork district has reached only 800 units plus. Overall, the 2015 units supply of Apartment has 35% increased, if compared to the same period in Figure 19: Units Supply by Location PAGE 26 Annual Report 2015

29 4.2. UNIT SUPPLY IN CHAMKAR- MORN DISTRICT Half of total supplies in Chamkarmorn district is located in Boeung Keng Kang communes (BKK I, II & III). Considerably, foreigners know this location (BKK1) well. It is prime for both land market prices coming up higher and higher year to year and this location remains a high demand from investors and developers. However, since the quick growth of land market price and the narrow vacant land for development of mega project in this location, developer and investor start to look for another similar location near BKK and Tonle Basacc districts. Therefore, Phsar Derm Thkov has started to boom there up with many apartments project development. With the acceptable land market price, good condition, high demand especially located near BKK and Tonle Basacc area, this area has attracted many developers and investors. Among 12 communes in Chamkarmorn, we have seen that Phsar Derm Thkov is one of the quickest growths with apartment buildings. In 2015, compared to the same period in 2014, apartments building have 179% increased. BKK has 24% increased; Tonle Basacc has 26% involved; Toul Tumpong has joined 51%; Toul Svay Prey has 14% increased. Figure 20: Market Supply in Chamkarmorn District we have seen its share increase that, Toul Kork has 50% increased, 7Makara 29%, Chamkarmorn and Chroy Chong Var 25%, Daun Penh 19% and Mean Chey 17%, compared to the same period Figure 21: Number of Building Apartment by Years 4.4. MARKET SHARE BY GRADE Some apartments announced themselves as Service Apartment grade A or B, while others operate as non-graded apartment. Anyways, we had judged any apartment as grade A, B or C by its services, facilities, decoration, rental price, unit size, location, total unit numbers, etc. Through our experience in researching, we has classified grade A apartment for full facilities with; swimming pool, gym, fitness center, steam or sauna, spa, massage, skybar restaurant etc. There are services providing as; cleaning, laundry, 24h front office reception and security, internet access, and others as tenant required. Generally, Grade A has 24% equal over 1,500 units, while grade B has 53% equal 3,300 units and grade C runs with 23% equal 1,400 units. Figure 22: Market Share by Grade 4.3. NUMBER OF BUILDING APART- MENT BY YEAR Together land market price in Chamkarmorn district has quicker grown and this location still has a higher demand from not only developers and investors but also tenants. While some investors are turning to invest in different areas, Issue 2016 PAGE 27

30 4.5. RENTAL PRICE IN CHAMKAR- MORN DISTRICT The price of Apartment Grade A for One Bedroom Unit ranges from USD 1, to USD 2,500.00/month. Two Bedroom Unit range from USD 1, to USD 2,500.00/month, Three Bedroom Unit from USD 1, to USD 3,000.00/month and Penthouse, a type of special unit in an apartment building like a smaller house, range from USD 4, to USD 5,000.00/month. Grade B for One Bedroom Unit ranges from USD to USD 1,320.00/month. Two Bedroom Unit range from USD to USD 2,000.00/ month, Three Bedroom Unit from USD 1, to USD 2,300.00/month and for Penthouse ranges from USD 1, to USD 3,000.00/ month. Grade C for One Bedroom Unit ranges from USD to USD /month. Two Bedroom Unit ranges from USD to USD 1,100.00/month and for Three Bedroom Unit from USD to USD 1,300.00/month. In average, one bedroom unit ranges from USD to USD1,590/month, two bedrooms ranges from USD to USD 1,866.67, three bedrooms ranges from USD 1,350 to USD 2,200/months and penthouse ranges from USD 3,000 to USD 4,000/month. Three Bedroom Unit from USD 1, to USD 3,300.00/month and for Penthouse, the type of special unit in one apartment building, range from USD 1, to USD 6,000.00/ month. Grade B for One Bedroom Unit ranges from USD to USD 1,500.00/month. Two Bedrooms Unit ranges from USD to USD 1,400.00/month, Three Bedrooms Unit from USD 1, to USD 1,800.00/month and for Penthouse ranges from USD 1, to USD 2,000.00/month. Grade C for One Bedroom Unit ranges from USD to USD /month and Two Bedroom Unit ranges from USD to USD /month. In average, one bedroom unit ranges from USD 600 to USD1,490/month, two bedrooms ranges from USD 750 to USD 1,680, three bedrooms ranges from USD 1,400 to USD 2,550/months and penthouse ranges from USD 1,550 to USD 4,000/month. Figure 24: Rental Price in Daun Penh District Figure 23: Rental Price in Chamkarmorn District 4.6. RENTAL PRICE IN DAUN PENH DISTRICT The price of Apartment Grade A for One Bedroom Unit ranges from USD 1, to USD 2,270.00/month. Two Bedroom Unit range from USD 1, to USD 2,790.00/month, PAGE 28 Annual Report 2015

31 4.7. RENTAL PRICE IN TOUL KORK DISTRICT The price of Apartment Grade A for One Bedroom Unit ranges from USD to USD 1,200.00/month. Two Bedroom Unit range from USD 1, to USD 1,600.00/month, Three Bedroom Unit from USD 1, to USD 2,200.00/month Grade B for One Bedroom Unit ranges from USD to USD 1,000.00/month. Two Bedroom Unit range from USD to USD 1,300.00/month, Three Bedroom Unit from USD 1, to USD 1,400.00/month Grade C for One Bedroom Unit ranges from USD to USD /month. Two Bedroom Unit ranges from USD to USD /month and Three Bedroom Unit from USD 1, to USD 1,300.00/month In average, one bedroom unit ranges from USD to USD /month, two bedrooms ranges from USD 850 to USD 1, and three bedrooms ranges from USD 1,400 to USD 1,633.33/months 4.8. RENTAL PRICE IN 7 MAKARA DISTRICT Grade B for One Bedroom Unit ranges from USD to USD 1,000.00/month. Two Bedroom unit range from USD to USD 1,600.00/month, Three Bedroom Unit from USD 2, to USD 3,000.00/month Unit and Penthouse ranges from USD 1, to USD 2,800.00/month. Grade C for One Bedroom Unit ranges from USD to USD /month. Two Bedrooms unit ranges from USD to USD 1,000.00/month. In average, one bedroom unit ranges from USD 325 to USD 800/month, two bedrooms ranges from USD 500 to USD 1,300, three bedrooms ranges from USD 2,800 to USD 3,000/months and penthouse ranges from USD 1,400 to USD 2,800/month. Figure 26: Rental Price in 7 Makara District Figure 25: Rental Price in Toul Kork District 4.9. OCCUPANCY RATE Even supply grows, the occupancy rate maintain good result as 90%, compared to the same period in 2014 is 92%, 2% slightly decreased. Figure 27: Occupancy Rate Issue 2016 PAGE 29

32 CONDOMINIUM MARKET IN PHNOM PENHPENH 5.1. NUMBER OF PROJECT LAUNCH In 2015, Condominium has 78% increased, comparing to the same period in 2014 Condominium was introduced to Cambodia market in 2006 by a 1st project, Rose Condominium. Following the success of Rose Condo, it had 10 more projects launched in 2007 and Unfortunately, in 2009 the global economy crisis had affected all sector developments around the world included Cambodia as well. Luckily, since 2010 the economic started steadily to recover from year to year, till 2012 Cambodia many projects development started to boom again. Strangely, by 2015 there were 73 condominium projects in Phnom Penh, compared to the same period in 2014 was 78% increased. With many factors drove condominium projects to increase double; the prospective of AEC from developers, GDP growth rate, highly return on investment in compare to other countries among ASEAN, bank support, government s policy on investment motivation, government s policy on allowing foreigners to own properties in Cambodia from the first floor up, etc. Figure 28: Number of Project Launch 5.2. NUMBER OF SUPPLY BY YEARS Through the above developer s prospection, those projects development will change Phnom Penh s beauty to be a charming city and rich of high-rise building. By 2018, the total supply will increase to almost 20,000 units in case those projects will be completed as scheduled. However, current pending projects have 2,800 units that most projects are PAGE 30 Annual Report 2015

33 belong to 999 Developer. All in all, we still hope those being placed on hold projects would continue their construction as soon as possible.. Figure 29: Number of Supply by Years View, The Gateway, Skylar Meridian etc. Due to internal matter causes some projects got pending like; Time Center, some projects belong to 999 developers. Totally, around 2,800 units are pending statement. Figure 30: Condominium Status 5.4. NUMBER OF UNITS SUPPLY LAUNCHED IN 2015 In 2014, the total launched supplies had units, whereas in 2015, it has extremely increased to 11,500 units, if compared to the same period is 243% boosted. Counting from the existing unit, total supplies reaches to 23,400, the comparation with 2014 had only 11,800 units. Thoroughly, 97% has been swelled. igure 31: Total Units Launch in CONDOMINIUM STATUS 17 condominiums in equal with 2,600 units are on the current market while another 38 projects are under construction, equal 14,600 units. Next, 9 condominium projects will be ground breaking by the early 2016, estimated 3,200 units like; Penthouse Residence, Toul Sangke Green Tower, North Park, Okidee Villa, Royal Park Residence, The Peak, Cloud 9, East Issue NUMBER OF PROJECT LAUNCH IN 2015 Notably, 2015 is the remarkable years which a lot of projects condominium has launched. As of 2015, there have 32 projects launched PAGE 31

34 compared to 2014 only 13 projects, 146% increased. Marking alone on existing projects till now, it has 73 projects while 2014 had only 41 projects. Wholly, 78% has been increased. Figure 33: Unit Price in CBD Area Figure 32: Number of Project Launch in SELLING PRICE IN SQ.M IN CBD AREA Because of higher land market price in CBD, cause the condominium price in this location also became higher than any other. Certainly, the condominium price in Chamkarmorn is in average of $1,228 to $3,500/sqm and the price in Toul Kork is lower than other area with the price $1,267 to $3,229/sqm. In Average for CBD area the price is ranging from USD 1,972 to USD 2,394/sqm SELLING PRICE IN SQ.M IN OUTSKIRT AREA Among four district below, Chroy Chong Var is more popular than other because this area is a developing area with new projects d evelopments like; Borey, Condo, Satellite City, Shopping Center, etc. The highest price of condo in Chroy Chong Var district is ranging from $712 to $2,222/sqm and Khan Sen Sok is around $1,200 to $2,000, Khan Mean Chey s price is $514 to $1,022/sqm. Finally Khan Chbar Ampov is ranging from $712 to $2,050/sq.m. PAGE 32 Annual Report 2015

35 BOREY (COMPOUND FLATS AND VILLAS) 6.1. SUPPLY BY LOCATION Cambodian Civil Code Concerning Land Law on Article 8 of Private and Public Owership states that, Only natural persons or legal entities of Khmer nationality have the right to ownership of land in the Kingdom of Cambodia. The following persons or entities being owners of land in Cambodia include Cambodian citizens, public territorial collectives, public institutions, Cambodia communities or associations, public enterprises, Cambodia civil or commercial companies and any Cambodian organization which recognized by law as a legal entity. A foreigner who falsifies national identity to become an owner of land in Cambodia shall be punished as determined under article 251 of this law. Any property bought under these circumstances will be seized as state property without compensation from the state. Borey is a compound of flats and villas which have some facilities such as public lights, security guards, garden, and so on. Contrary to Borey, Condominium is a type of co-ownership building in which developers can sell out units of condo to foreigners from the first floor up. Only Cambodians have rights to buy Borey as their property. Sen Sok district is one of the most popular locations for Borey construction; total supplies of housing units in this location are more than other locations. Porsen Chey district stands second as it also has a similar supply comparing to Sen Sok district. Following these two districts, Chbar Ampov which is a new district spilt from Mean Chey district. Meanwhile, Toul Kork district has the lowest supply of Boreys because it is located in the CBD area and developers prefer to select this location primarily for Condominium, Apartment and Hotel construction. Totally, there have almost 49,000 units supplying in 2015, 20% increased compare to the same period in Figure 34: Supply by Location Issue 2016 PAGE 33

36 6.2. NUMBER OF PROJECT BY LOCATION Based on Economic theory, market segment or target markets for Borey are Cambodians while Condominiums and Apartments are foreigners. And when it comes to comparison of construction locations for these two types of residential, Boreys mostly constructed in the outskirt area while Condominiums and Apartments appeare in CBD area. As a result, Sen Sok district is the leading area for Borey construction with 40 projects, following by Russey Keo with 29 projects, Chbar Ampov with 24 projects, Porsen Chey with 23 projects, Mean Chey with 14 projects, Chroy Chong Var with 9 projects, Dangkor with 12 projects, Chamkamorn with 6 projects and Toul Kork with 3 projects. Totally, 160 projected, 17% increased compare to the same period in PRICE OF BOREY IN RUSSEY KEO DISTRICT There are many types of house s name in each Borey; however, the names are generally divided into 4 categories as Flat, Link House, Twin Villa and Single Villa. The price of Flat in Russey Keo district ranges from USD 58,888 to USD 194,812, while price of Link House ranges from USD 73,800 to USD178,800. Twin Villa s price is from USD 131,668 to USD 299,800 and Single Villa s starts from USD 278,668 to USD 878,800. Figure 37: Price of Borey in Russey Keo District Figure 35: Number of Project by Location 6.5. PRICE OF BOREY IN CHBAR AMPOV DISTRICT 6.3. SALE RESULT According to sale result which we collected from developers showed that, around 79% of the total amount were sold out while 2014 had only 77%. Totally, 3% increased compare to the same period in Figure 36: Sale Result The price of Flat in Chbar Ampov district ranges from USD 73,500 to USD 86,000, whereas price of Link House ranges from USD 75,800 to USD 142,800, Twin Villa s from USD 144,800 to USD 197,800, and Single Villa s from USD 306,800 to USD 1,653,800. Figure 38: Price of Borey in Chbar Ampov District PAGE 34 Annual Report 2015

37 6.6. PRICE OF BOREY IN DANGKOR DISTRICT Figure 41: Price of Borey in Sen Sok District The price of Flat in Dangkor district ranges from USD 49,180 to USD 77,780 and Twin Villa s price is from USD 126,680 to USD 129,680. Figure 39: Price of Borey in Dangkor District 6.9. PRICE OF BOREY IN CHROY CHONGVAR DISTRICT 6.7. PRICE OF BOREY IN MEAN CHEY DISTRICT The price of Flat in Mean Chey district ranges from USD 167,800 to USD 197,800, while price of Link House ranges from USD 131,800 to USD 285,290, Twin Villa s from USD 192,800 to USD 314,800, and Single Villa s from USD 327,910 to USD 843,800. The price of Flat in Chroy Chongvar district ranges from USD 156,888 to USD 181,888, whereas price of Link House ranges from USD 68,880 to USD 177,800, Twin Villa s from USD 133,999 to USD 276,800, and Single Villa s from USD 448,888 to USD 771,800. Figure 42: Price of Borey in Chroy Chong Var District Figure 40: Price of Borey in Meanchey District 6.8. PRICE OF BOREY IN SEN SOK DISTRICT The price of Flat in Sen Sok district ranges from USD 101,714 to USD 159,790, while price of Link House ranges from USD 92,674 to USD 392,980, Twin Villa s from USD 144,000 to USD 559,800, and Single Villa s from USD 312,800 to USD 1,400,000. Issue 2016 PAGE 35

38 6.10. PRICE OF BOREY IN CHAMKARMORN DISTRICT The price of Flat in Chamkarmorn district ranges from USD 340,000 to USD 530,000, while price of Link House ranges from USD 340,350 to USD 417,000, Twin Villa s from USD 435,600 to USD 474,350, and Single Villa s from USD 750,000 to USD 1,700,000. Figure 43: Price of Borey in Chamkarmorn District SIZE OF BOREY The size of house is the size of construction in each type of house in each borey. Table 5: Size of Borey PRICE OF BOREY IN TOUL KORK DISTRICT The price of Flat in Toul Kork district ranges from USD 165,800 to USD 184,900, while Twin Villa s price ranges from USD 152,200 to USD 219,900 and Single Villa s from USD 420,000 to USD 1,350,000. Figure 44: Price of Borey in Toul Kork District PAGE 36 Annual Report 2015

39 HOTEL IN PHNOM PENH 7.1. HOTEL SUPPLY BY LOCATION 7.2. HOTEL SUPPLY BY STAR Sofitel Phnom Penh Pokkettra, Raffle Hotel Le Royal, Intercontinental Hotel, Cambodiana Hotel and Naga World are the well-known hotels in Phnom Penh. Those hotels know as 5 and 4 stars hotels. Mostly hotels in Phnom Penh cover with 3 stars, around 5,500 hotels room. With the increasing number of 5 stars and 4 stars hotels around 15% up lead the total number of hotels room increased. Naga World has developed itself to be 5 stars hotels. Based on our survey through Online Booking. com, there are 323 hotels in Phnom Penh as of Two majorities district rich of hotels, namely Daun Penh and Chamkarmon district and following by Toul Kork and 7 Makara district. Due to the fact that Daun Penh is located in the CBD area especially surround by numerous tourist attraction sites including Royal Palace, Wat Phnom Historical Site, National Museum, Night Market, River Side, etc. In sum, hotels in Phnom Penh has 10% increase compared to the same period last year. Figure 46: Room Supply by Star Figure 45: Hotel by Location Total Hotel Among Four Provinces have 914 Equal 39,382 Room With the Occupancy Rate 70% in 2015 Issue 2016 PAGE 37

40 HOTEL IN SIEM REAP PROVINCE 8.1. HOTEL SUPPLY BY LOCATION In Siem Reap city there are 12 Sangkats as Sangkat Slor Kram, Sangkat Svay Dangkum, Sangkat Kork Chork, Sangkat Sala Kamroek, Sangkat Norkor Thom, Sangkat Chreav, Sangkat Chong Khneas, Sangkat Sambour, Sangkat Siem Reap, Sangkat Srangae, Sangkat Ampil, Sangkat Krabei Riel and Sangkat Toek Vil. Among those Sangkats, Sangkat Svay Dang Kum, Sala Komroek, Slor Kram and Sangkat Sala Konseng are situated in the city center, so most hotels are also located in these locations. On the contrary, other Sangkats are situated a bit further from the city center and so there are not many hotels there. Totally, there are around 440 hotels in Siem Reap Province with the total number of room approximately 18,484 rooms HOTEL SUPPLY BY STARS Just like Phnom Penh, Siem Reap also has more 3 star hotels than 4 and 5 star hotels. Yet, if comparing the total amount of 5 star and 4 star hotels in Siem Reap with that in Phnom Penh and Sihanouk Ville, Siem Reap Province stands first since it has the most total number of tourist arrivals. Analyzing by the total number of rooms, we see that 4 star hotels provide more supplies than 3 star or 5 star hotels. Figure 48: Price of Borey in Toul Kork District Figure 47: Price of Borey in Toul Kork District PAGE 38 Annual Report 2015

41 HOTEL IN SIHANOUK VILLE 9.1.ROOM SUPPLY IN SIHANOUK VILLE Shinahouk Ville is the most famous provincial beach in Cambodia for its white beach, tropical islands, and Koh Rong and Koh Rong Sonlem. It is also locally called Kampong Som, 230km in distance from Phnom Penh Capital. In 2015, the number of tourists has dramatically soared up and our annual analysis records that the exiting hotel in the province is 112, providing 4,215 rooms. Figure 49: Room Supply in 2015 Issue 2016 PAGE 39

42 HOTEL IN BATTAMBANG PROVINCE HOTEL SUPPLY BY STARS Battambang, located at northwestern of Cambodia, contains the second most populous city in the country after Phnom Penh, Ministry of Tourism, The provincial capital, also called Battambang, has always been a popular destination for its nearby ancient temples, French colonial architecture, and Buddhist shrines. In 2015, the province saw the number of visitors reaching more than the previous year, the flowing has been increased. At the same development phase, there are many sights of new construction to serve the increasing tourism sector as well as other investment. It has, through our study, revealed that the hotel supply in Battambang province by 2015 has jumped to 39 hotels, counted 1,530 rooms. Figure 48: Hotel Supply by Stars PAGE 40 Annual Report 2015

43 HOTEL IN MAIN PROVINCES TOTAL SUPPLY BY PROVINCES Among top 4 provinces in Cambodia, Siem Reap is one of the leading tourism destinations with a lot of archeological temples. Through our survey online booking.com, around 440 hotels include 18,484 rooms in Siem Reap, Phnom Penh has 323 hotels equal 15,153 rooms, Sihanouk Ville has 112 hotels equal 4,215 rooms and Battambang has 39 hotels with 1,530 rooms. In average supply growth 15% increased compare to the same period in With the 4 provinces, Siem Reap has the higher growth rate than 3 others provinces. Figure 51: Total Supply by Provinces HOTEL OCCUPANCY RATE According to the report from ministry of tourism, the total number of tourists arrival to Cambodia has around 4.7 million tourists, compared to the same period in 2014 is 4% increased. Base on annual report 2014 from Ministry of Tourism released that the average occupancy rate in the whole county was 67.55% with the average length of stays 6.50 days. Even though the number of tourist arriv- Issue 2016 PAGE 41

44 al has increased but the hotel occupancy rate is slightly decreased from 74% to 70%, 4% decreased AVERAGE ROOM RATE Table 6: Average Room Rate Due to the fact that, many reason behind the dropping of hotel occupancy rate like; the threaten of ISIS in Thailand and some other counties in Europe, diversified of tourists destinations, supply growing, contagious disease from neighboring counties which affect to Cambodia. Through our survey, Siem Reap has the occupancy rate 66%, Phnom Penh has 68%, Sihanouk Ville 73% and Battambang has 74%. Averagely among 4 provinces the occupancy rate is 70%. Table 7: Number of Hotel and Room Figure 52: Hotel Occupancy Rate PAGE 42 Annual Report 2015

45 Issue 2016 PAGE 43

46 PART III LAND MARKET PRICE IN LAND MARKET PRICE IN PHNOM PENH PAGE 44 Annual Report 2015

47 3.2. LAND MARKET PRICE IN SIHANOUKVILLE Issue 2016 PAGE 45

48 3.3. LAND MARKET PRICE IN SIEM REAP PROVINCE PAGE 46 Annual Report 2015

49 3.4. LAND MARKET PRICE IN BATTAMBANG PROVINCE Issue 2016 PAGE 47

50 3.5. LAND MARKET PRICE IN KAMPONG CHAM PROVINCE $50-$70 $40-80 $30-$50 $70-$100 $70-$100 $3 0-$ 50 $100-$150 $1 00 $150-$250 -$ $3 00 $ -$5-1$2 3 0 $2 00 -$3 $20 00 $2 00 -$ $ $200 $100- $250-$ $ 250 $4 $3 $300-$ $ $3 0-$30 $20 -$4 -$80 $60 00 $2 00 -$6 00 -$4 00 $600-$800 $400-$600 -$6 00 $3 50 $5 50 -$2 -$8 50 -$3 50 -$ $230-$ $2 00 $ $300 -$40 0 $1 00 -$ $1 $50-$80 - $ $60-$90 $800 -$4 $1 $ $ $2 $200-$300 - $ $ 0- $ 0-0 $1 $1 50 $1 00 -$2 50 -$ $ 0 $5 50 $1 80 $ 2015 This market price is not for shop lot land, it is flexible according to the location, size, road and situation. House N 126, Norodom Blvd Sangkat Tonle Bassac,Khan Chamkamorn,Phnom Penh. Land Market Price in Kampong Cham City PAGE 48 LEGEND Commercial Residential Annual Report 2015

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