Crumbling prices, rent ruffle condo segment

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No condominium development projects were completed in the second quarter. Hean Rangsey

The prolonged decline in international arrivals to Cambodia intensified by renewed Covid-19 fears has driven down condominium sales prices and rental rates in Phnom Penh, a research report said.

CBRE Cambodia, the local affiliate of US commercial real estate services and investment firm CBRE Group Inc, said the price of high-end condominium units averaged $3,041 per sqm in the second quarter of this year, down 3.98 per cent compared to the first quarter.

Mid-range condominium units averaged $2,441 per sqm, a 4.61 per cent quarter-on-quarter dip, while affordable units averaged $1,539, falling 0.65 per cent on a quarterly basis.

Monthly per-sqm rental rates during the second quarter were $13.18 for high-end units, shrinking 7.25 per cent from the first quarter, and $11.12 for affordable units, sinking 5.71 per cent.

In the first quarter, high-end units went for around $3,167 per sqm, down 0.53 per cent compared to the fourth quarter of last year. Mid-range units fetched about $2,559 per sqm, slipping 1.39 per cent, whereas affordable ones cost an average of $1,549 per sqm, inching up 0.32 per cent.

On the first quarter rental market, high-end units averaged $14.21 per sqm, down 0.4 per cent and affordable units went for around $11.79, dropping 0.6 per cent.

Though no condominium development projects were completed in the second quarter, CBRE Cambodia said, three new launches delivered an additional 2,252 units to the capital’s supply.

The three projects are Leedon Heights in Sen Sok district’s Phnom Penh Thmey commune, the Le Conde BKK1 on Street 352 between Streets 57 and 63 in Boeung Keng Kang district’s Boeung Keng Kang I commune and the Grand Condo 7 project in Chroy Changvar district’s Chroy Changvar commune.

CBRE Cambodia senior analyst Kim Kinkesa told The Post on Wednesday that the market for condominiums in Cambodia had been sluggish since the beginning of the year.

Condominiums are highly sought after by foreigners, she said. As Covid-19 makes expatriates reconsider the length of their stay in the Kingdom, the market will unavoidably be shaken up when they leave.

“Covid-19 has significantly reduced the number of foreign tourists staying and travelling in Cambodia, correspondingly leaving a mounting number of unoccupied condo units,” Kinkesa said.

Given the intensified global threat of a resurgence in Covid-19 infections, she warned that the Kingdom’s condominium sector is set to face tough market conditions in the third quarter.

“I reckon that condominium sales prices and rental rates in Phnom Penh are headed for a sustained downfall in the third quarter, as the number of foreign arrivals to Cambodia fails to reach pre-Covid-19 levels,” Kinkesa said.

She said there are 72 launched condominium projects in the capital comprising a total of 20,850 units.

During the first quarter of this year, 4,521 new condominium units were launched for sale at eight projects, a separate CBRE Cambodia report said.

The projects are The Garden Residency 2, Phnom Penh Galaxy Garden, Parc 21 Residence, The Hexa, AKJ Bright Pearl, Urban Village II-Tower G, Grand Central and The Golden World International.

Capital investment in the construction sector reached more than $3.84 billion in the first half of this year, climbing 13.26 per cent from the first half of last year, the Ministry of Land Management, Urban Planning and Construction said in a report.