MACRO-PERSPECTIVES:
REAL ESTATE INDUSTRY &
OUTLOOK 2016
1
By Hoem Seiha
Director of Research
H/p: (012/010)-699-553 | [email protected]
Website: www.vtrustappraisal.com
Table of Contents
I. Cambodia‟s Economic Overview
II. Phnom Penh Overview
III. Commercial Sector
IV. Residential Sector
V. Landed Housing
VI. Serviced Apartments
VII.Condominium
VIII.Bank Credit Absorption by Sectors
IX. Property Outlook
2
Cambodia’s Economic
Snapshot
“Cambodian economy remains strong, despite a slight growth for 2015 and 2016 due to economic disturbances, with a forecast at 7 percent of GDP growth in 2015 and 7.2 percent in 2016.”
Source: Asian Development Outlook 2015, ADB
3
Fast Stats
Fast Stats 2014 2015
GDP, nominal, US$ million
(World Bank) 16,600 18,381
GDP, real growth, %
(ADB)
7.0 7.0
GDP, per capita, US$
(MEF)
1,130 1,225
Inflation, %
(ADB)
1.3 2.7
Population, in million
(NIS)
15.3 15.6
Phnom Penh (current, million) 2.2
Annual Growth (%) 4
4
Phnom Penh Demography
• About 2.2 million is the number of Phnom
Penh Population (as of 2015, unofficial sources).
• Phnom Penh Population average growth rate is
about 4% y-o-y (Word Bank).
• The population density is about 5,343 inhabitants per square kilometer in recent years
(Wikipedia).
6
Incomes of Population 8
$102 $106 $100 $107 $136
$498 $480 $443 $462
$587
3%
-5%
6%
28%
-4%
-8%
4%
27%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
$-
$100
$200
$300
$400
$500
$600
$700
$800
2009 2010 2011* 2012* 2013*
(*) Preliminary results
Source: National Institute of Statistics; Graphed by Park Cafe
Disposable Income in Phnom Penh (Average Value per Month)
Per Capita Per Household
Change (%), per capita Change (%), per household
Construction Sector 10
2.7
2013
2.1
2012 3.3
2014
1.2
2011 3.2
2015
Source: Cambodian authorities, World Bank, Phnom Penh Post, US
Commercial Service, Department of Commerce
Values of Approved Construction Projects in
Cambodia (in US$ Billion)
Construction Sector
• In 2015, 55 high rise construction projects were
approved by the Ministry of Land Management,
Urban Planning and construction, bringing a total
of 13,000 units into the whole country, with
the majority clustering in the Capital.
• Most construction investments were injected into
condominium complexes, with an estimate of
10,000 units in 2015 alone.
11
Commercial Real Estate 12
• Commercial property market has been growing strong
since the last few years, with the supply of major
commercial development centers such as Sovanna Mall,
Canadia Tower, Phnom Penh Tower, and lately the
Ratannac Tower and AEON shopping mall as well as the
soon-coming Parkson Mall.
• About 275,000 sqm is the total supply of
retail space in 2015, contributed hugely by the
coming of AEON Mall (Retail Market Phnom Penh, Sept
2014, CBRE).
Retail Sector 13
• It is estimated that about 300,000 sqm of net leasable
retail space is slated for the market supply by the end of 2016 (Retail Market Phnom Penh, Sept 2014, CBRE).
• Parkson Mall will be ready by early 2016, bringing about
70,200 sqm of leasable area.
• AEON 2 will be ready by the end of 2018, bringing about
151,000 sqm of leasable area.
• About 450,000 sqm of total retail space is forecast to
be in the market by 2018, largely contributed by AEON 2 located in Phnom Penh Thmey (Estimate, VTrust Appraisal Research Department).
Office Space Market
About 190,000 sq.m of office space has
supplied into Phnom Penh office market since 2012, as no more supply has been added to the market in the last few years (Phnom Penh Market Review, March 2014, CBRE).
About 298,000 sqm of leasable space is
slated to enter the office market by 2018 (Knight Frank Research Department).
14
Residential Market Overview
• Demand for villas and shop houses within „borey‟ landed developments remains strong, driven principally by Cambodian nationals able to take advantage of staggered payment options and in-house finance schemes.
• Shop houses, comprising upper floor residential accommodation and ground floor retail space continue to be a popular option for Cambodian nationals, due to their relative affordability and the option of using the unit for business purposes in addition to residential accommodation.
Source: CBRE Residential Market Review (Dec, 2014)
15
Housing Demand
“10,000 is the number of families from other provinces moving to Phnom
Penh every year.”
Lao Tip Seiha, director of the department of construction at the Ministry of Land Management, Urban
Planning and Construction, as quoted by the Phnom Penh Post, 2011
Therefore, housing demand is therefore estimated at a modest figure of
10,000 units every year (Phnom Penh Post, 2015).
122 is the number of registered “borey” landed development projects, both
complete and under construction (Ministry of Land Management, Urban
Planning and Construction, as of March 2016).
Housing demand is also driven by a shifting trend from extended to
nuclear family and increase of newly-married couples every year as a result of baby boom.
16
Phnom Penh’s Apartment Market 2014
There are almost 400 apartment buildings,
the majority of which are small and family-
run apartments.
Source: VTrust Report on Apartment Market (2014)
17
Supply & Demand
About 3,500 is the number of high grade
serviced apartment units offered for rent in
Phnom Penh in 2014.
This market is driven by some of the 50,000
expats living and working in Phnom Penh.
Source: VTrust Report on Apartment Market (2014)
18
Real Estate Prices
• Real estate prices grew about 20 percent a year.
• Land prices in prime commercial district (i.e.
Chamkar Mon) grew by 10 percent in 2015.
• Land prices in new developing areas (i.e. Chroy
Changvar) grew by 20 percent in 2015.
Source:
Maintaining High Growth: Cambodia Economic Update, World Bank
VTrust Appraisal Research Department
20
Bank Deposits from Private Sector
US$
8.81 Billion
2014
US$
6.88 Billion
2013
14.2% yoy
30.6% yoy
Sourc
e: W
orl
d B
ank;
Cam
bodia
n A
uth
ori
ties
Bank Credit Absorbed by Sector
19 %
Construction
& Real Estate
10.4 %
Agriculture
35.9%
Wholesale
& Retail
So
urc
e: W
orl
d B
an
k; C
am
bo
dia
n A
uth
ori
ties
9.6 %
Manufacturing
Shares of Credit by Sector in 2014
Credit to Real Estate & Construction
1.76
2014
1.23
2013 2.02
2015
Sou
rce:
Nati
onal
Bank
of
Cam
bodia
0.96
2012
Values of Credit Absorbed by Construction and Real
Estate Sector (Values in US$ billion)
Credit to Real Estate & Construction
433
Real Estate
Services
699
Housing
Mortgage
889
Construction
So
urc
e: N
ati
on
al
Ban
k of
Cam
bo
dia
Credit Shares in Real Estate and Construction Sector
as of June-2015 (Value in US$ million)
Residential Outlook
Residential market demand is primarily
driven by:
• especially on landed housing, the increase of
newly-married couples every year in
Phnom Penh
• About 10,000 new family entries into Phnom
Penh every year
• Rising of disposable income levels of
Phnom Penh Population
27
Commercial Outlook
Our projection for the long run in the commercial real estate
sector by the next few years will grow by double, as
bolstered by Parkson Mall, AEON 2 Mall, commercial
complexes attached with Olympia City and a few other
condominiums . This estimation is based on:
• Increase of establishment registrations every
year, thus boosting the need for office space.
• The increase of income levels of the population boosts
the need for mid-to-high-end consumer products, thus
driving retail sector.
28
External Impacts
Recent economic slowdown in China, with real growth of
6.8 percent (Source: IMF) in 2015, down from 7.7
percent in 2013, has a very minimal spillover effects on Cambodia economy in term of:
• Slight slowdown in tourism sector because China
is the second top tourist arrivals to Cambodia, after Vietnam.
• For real estate sector, there will be a slight slowdown
in condominium market because Chinese are
currently one of the leading buyers.
29
Key Factor Analysis
It‟s too early to estimate the spillover effects of China‟s
slowdown on Cambodian economy, because early symptoms
still show of sign of strong growth compared to last year.
Look at the number of tourist arrivals in Cambodia.
30
460
Jan-2015
466
Jan-2016
Total (Thousand)
53 66 China
(Thousand) So
urc
e: M
inis
try
of
Tou
rism
Key Factor Analysis
Condominium Market Performance
31
25
2015, Whole
7
Jan-2016
Sales-to-Stock
Ratio, %
48.1 168.8 Absorption Rate,
Months
It is an early sign for the slowdown in real estate market in
2016, yet it could be TOO EARLY to predict the whole
performance for this year…
56
Avg., 2007-2015
32.4
So
urc
e: C
entu
ry 2
1 C
am
bo
dia
Conclusion
Real Estate Sector Outlook for 2016
32
Construction and Real estate sector growth remain strong this year, and it will
continue to do so over the next coming year, mainly bolstered by:
• Maintained real growth of Cambodia‟s GDP at 7.2 percent in 2016 (ADB‟s
prediction, last updated).
• Therefore, this lead to a continuous growth of population incomes, thus
continuing to still drive local demand on landed housing units.
• However, apartment, condominium market is starting
to see a slowdown due to its too much reliance on foreign
buyers and excessive supply coming at the same time where
the market absorption isn‟t fast enough to offset the accumulative stock.
Thanks for your Time
Contact #113 (Parkway Square) Mao Tse Tong Blvd., Phnom Penh, Cambodia |
H/p: (855)12-699-553 / 10-699-553
(855) Office: (855)23-220-098
E-mail: [email protected]
Website: www.vtrustappraisal.com
33
Top Related