Outbreak wracks land lot market

Content image - Phnom Penh Post
Prior to the pandemic, rapid economic growth and rising incomes had spurred the creation of land division projects outside of the Kingdom’s urban centres. Photo supplied

The land division market has plummeted in the wake of the February 20 community transmission, dashing hopes that a brief recovery early this year could be sustained, according to industry insiders.

Prior to the pandemic, rapid economic growth and rising incomes had spurred the creation of land division projects outside of the Kingdom’s urban centres.

Land division refers to the process in which developers create new allotments by splitting land into smaller parcels with separate lot titles. This is done to boost the value of their land holding by leveraging the development potential of their property.

Ven Chhunheat, chairman of Dey Thmey Real Estate Co Ltd, which manages land division projects along national roads 3 and 4, told The Post on March 17 that the latest outbreak had eroded company sales by 30-50 per cent.

He ascribed the slump to fear – of losing jobs and income, or contracting Covid-19 when going out.

And with the amount of cash required to carry out a lump-sum payment on a subdivided plot or reliable source of income needed to pay in instalments, things are only made worse with potential customers tightening their budgets, he noted.

“Before Covid-19 broke out in a third community transmission, many customers had made appointments to see the lots. But as soon as the outbreak struck, almost all were cancelled,” Chhunheat said.

Still, he said, the current situation provides a unique opportunity for prospective investors to buy up lots at a discount with better terms.

An anonymous salesman for Savuth Real Estate, which owns more than 30ha of land split into lots along National Road 51 near Canadia Industrial Park, said daily sales had plunged from 20 lots to just three or four, with weekends not faring much better.

“Sales are not so hot right now and there aren’t as many visitors per day as there used to be, with almost all potential customers who had scheduled to visit the land cancelling,” he said.

To make matters worse, there have been mounting requests from customers to delay payments, he lamented. “At the moment, about 50 per cent of customers have asked the company to ease the terms of payment agreements, and it’s complied with some of them.”

However, he is optimistic that subdivided-lot trading could avert a major disruption if the current outbreak is controlled soon.

Koemsoeun, an employee of a private company in Phnom Penh who bought a lot in the capital’s outskirts on an instalment plan, said that with income sources drying up for the moment, he is starting to run out of money to pay.

He said the outbreak had temporarily shuttered a relative’s shop where he would work to earn some spare cash on the side.

“Before, I was able to earn extra money while working at the company, but now it is over – I dare not go anywhere other than to work. If this situation persists much longer, I may go to the [owner of the lot] to ask it to ease payment terms or delay them for a bit,” Koemsoeun said.