Cambodian rice exports for the first half of 2015 followed an upward trajectory compared to the same period last year, as growing demand from China for white rice and the European Union’s growing appetite for parboiled rice buoyed exports.

Rice export totalled 283,825 tonnes for the first six months this year, an increase of almost 60 per cent compared to the same period last year, as reported by the Secretariat of One Window Service for Rice Export Formality.

White rice made up 47 per cent of these exports, followed by fragrant rice at 44.50 per cent, with parboiled rice rounding up the exports at 8 per cent.

Song Saran, CEO of Amru Rice Cambodia, one of the country’s largest rice exporters, said increased demand from China was driving the growth this year, coupled with new offerings like parboiled rice.

“Cambodia has started producing parboiled rice to supply the demand from countries like Italy,” said Saran.

“This is another step in our product diversification efforts, which allows Cambodia to export more.”

Saran said the focus should be on producing quality rice – given Chinese consumers’ growing demand for non-contaminated food products – than producing cheap rice where margins are low for both farmers and exporters.

According to the report, China alone imported more than 72,000 tonnes of rice during this period.

Given the completion of the 100,000-tonne rice export quota with China in May, officials on both sides are still working on possibly doubling this quota for the coming year.

In contrast to this year’s exports, Cambodia exported only 175,959 tonnes in 2013 and almost the same amount, 177,928 tonnes, in 2014.

European Union countries, including France, Poland and The Netherlands, remain the top three importers of Cambodian rice.

Italy, which has been a vocal opponent of Cambodian rice exports under the Everything But Arms scheme, afforded to least developed nations by the economic bloc, is ranked fourth in terms of rice imports.

The Ministry of Commerce spokesperson did not respond to requests for comment.

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Source:http://www.phnompenhpost.com/business/china-eu-drive-rice-export-gains-first-half

For the first time a Malaysian based real estate developer will presale residential property to Cambodian investors. According to Thida Ann, Senior Associate Director of CBRE Cambodia, the presale of foreign residential property is just the logical consequence in a general development asset diversification.

“We are seeing a rising trend of cross country investment within ASEAN and investors in the region are interested in every strong market,” she said.

Damansara City (DC), a luxury Malaysian property project developed GuocoLand, a Singaporean listed property development company, will be made available for Cambodian investors in a pre launch sale starting on June 27. The development, worth $700 million is scheduled to go online in 2016.

Located five kilometres from the city centre of Kuala Lumpur, the residences are currently valued at $4,600 per square metre. According to a recent Century 21 report, condos in Phnom Penh average at $1,900 per square metre. Therefore, the Malaysian property is more than twice as expensive.

This, and considering the rather promising growth rates in the Cambodian real estate market, one might wonder why Cambodian investors could have an interest to buy property in Malaysia.

Anthony Galliano, CEO of local investment firm Covenant International Management, agrees that Cambodia may be the more attractive investment option, at least in the short term, as he told Post Property.

“For property investors, Cambodia is more attractive in terms of market potential and the investment is free of currency and country risk as well as the challenges of overseas property acquisition, ownership, management and sale,” he said.

While the positive outlook is already creating incentives for Malaysian investors to invest in Cambodia, most Cambodians in return, could have even less incentives to invest in Malaysia, explained Galliano.

“The overwhelming majority of Cambodians have a comfort zone with domestic property and would be reluctant to invest in overseas properties given the unknowns, risks and challenges of ownership. Overseas property investment is likely a niche market opportunity for the super-wealthy and those who may want to own residences for their children studying or living overseas,” he said.

In fact, the approach to the Cambodian market DC Residency takes with the help of CBRE who has been appointed as the real estate agent, is rather targeted.

“Our prospective buyers are Malaysians who are based in Cambodia; groups of mixed investors consisting of Cambodians and foreigners who would like to do overseas investments; wealthy families who have children study in Malaysia; people who have business in Malaysia and wealthy Khmer people,” she said.

Other than having business interests in Malaysia or other personal reasons to buy a Kuala Lumpur luxury condo, Cambodians might also find buying property outside their local market a necessity to diversify their assets and limit risks.

“Property investors benefit from diversification which reduces risk through diversification by property type and geographic region. The benefit of potential market appreciation needs to be weighed against currency, liquidity, market, and country risk,” Galliano explained, but was quick to point out the risks in an overseas purchase.

“A real estate investment is complex. It involves purchase, ownership, tax, rental and sale, and is even more challenging if it is an overseas property. Any investor purchasing an overseas property has to weigh the benefits of diversification versus the challenges of remote, overseas ownership and management,” he said.

In terms of the Malaysian property market, the balance between risk and appreciation seems manageable.

“Capital appreciation of property in the Damansara Heights area has been consistently performing between 8 per cent to 12 per cent per annum for many years even during times of economic downturn. Hence, we expect the trend to continue for many years to come,” said Kenny Wong, general manager for marketing and sales of Guocoland.

A small minority of Cambodian investors seems to have appreciated the stable and profitable aspects of property markets in different development cycles all along.

“Cambodians have invested in other countries such as Singapore, Thailand, Australia and the United Kingdom before, but yet to invest in Malaysia. CBRE is going to introduce this project and hope we will have the positive outcome. Foreigners can own freehold property in Malaysia for both building and landed; this is the key attractive point. In addition the price in Malaysia is also more reasonable compared to other countries,” said Thida.

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Source:http://www.phnompenhpost.com/real-estate/malaysian-development-seeks-cambodian-investors

In the first half of 2015, the supply of serviced apartments saw an increase of 14 per cent when compared to the same period last year while rental prices remained stable.

According to a recent report from CBRE Cambodia, a total of additional 349 serviced apartment units will serve the market by the middle of 2016, with 5797 units present and 11 condo projects underway. The occupancy rate of serviced apartments declined from 90 per cent to 70 per cent at the end of 2014. However, in the second quarter of this year, it grew 80 per cent with the rising per cent of serviced apartment supply.

Ann Thida, associate director of CBRE Cambodia told Post Property via email that despite the increasing demand, leasing prices for serviced apartments remained stable. She added that 90 to 95 per cent of tenants are foreign investors and foreign professionals from Europe and Asia.

A service apartment unit differs from a condominium with the services and amenities they offer, such as 24-hour staff and extra security. Entering the lobby of a serviced apartment unit is like entering hotel.

“The main difference between a condominium and a serviced apartment is that a serviced apartment is much more similar to a hotel,” said Central Mansion leasing manager Malen Chea. “For [Central Mansions], we cater to our [tenants] as an international hotel.”

A swimming pool, bi-weekly cleaning services, a playroom or playground for kids and a gym are just some of the other amenities offered within a serviced apartment unit. Usually, a bar, café or restaurant are within the same building as the apartment units, as well.

On average, for a serviced apartment unit, a one bedroom unit or studio with 50 to 55 square metres varies from $1,000 to $1,500, two bedroom units with 70 square metres varies from $2,000 to $2,500 and three bedroom units with 110 square metres varies from $3000 to $3,500 per month, while “penthouse”units with 250 square metres are priced between $4,000 to $5,000 per month, according to the report, depending on the architecture and design.

However, the price of these serviced apartments pay for the rent, the services and the extra amenities which are included in the pricing packages. Tenants pay not only for a home but also for the many conveniences and security offered through the higher prices.

Van Chanthorn, managing director of Town City Real Estate Co. Ltd., said that among the new units rising in Phnom Penh, two serviced apartments opened in BKK1 and the other four apartments entered the market in Tuol Tompoung and Deum Thakav Market. “Both the serviced apartment supply and demand increased respectively compared to the same time last year, but it did not boost the rental prices.”

The areas comprising of serviced apartment units are in BKK1, Tonle Baasac, Tuol Tompoung, Deum Thakav market and Toul Svay Prey. Owners have added more anemities in their buildings such as swimming pools, gyms, steam rooms and sauanas, he said.

The managing director of Asia Real Estate Cambodia, Po Eavkong, said with the increase of the serviced apartment unit supply and demand, the market would face challenges with condos in the next two years because serviced apartment units are mostly for rent only while condos are bought and sold for investments. Consequently, the competition between condos and serviced apartments may increase. In order to remain competitive, serviced apartment owners in the city commenced a new strategy to provide customers with special packages in order to stay in the market.

“There will be an oversupply of condo units in the next two years, but there has to be a clear study in order to determine whether or not it will in fact over supply or not.”

Kek Narin, secretary of Cambodian Valuers and Estate Agency Association, said that the renting market will be very competitive, so if apartment owners do not improve their apartments, they may loose their clients since tenants often change their residencies.

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Source:http://www.phnompenhpost.com/real-estate/future-condo-supply-impact-serviced-apartment-market