A street of new housing in Phnom Penh
The city’s Canadia TowerMay 21 2010
By Elaine Moore
Financial Times (UK)
Above the tumultuous streets of northern Phnom Penh, the new Canadia Tower reaches 30 storeys into the sky, dwarfing the palaces and temples that grace the rest of the city’s skyline. The glass-fronted tower is now the highest building in Cambodia and marks the start of an ambitious plan to attract increased foreign investment to this small Asian market.
Known as the “pearl of Asia” in the early 20th century, Phnom Penh has suffered years of civil war and a repressive communist regime, but its architecture of golden-tipped temples, red-roofed houses and French colonial mansions is still distinctive. The Canadia Tower, also known as the OCIC Tower, is instead designed to imitate and rival the sort of modern office space available in bigger neighbouring countries such as Vietnam and Thailand.
The soaring structure will soon be joined by other high-rises across the city, offering homes as well as offices. Some are being funded locally, others by foreign investors (mostly Korean) but all the financial backers hope they will attract wealthy foreigners and persuade locals to forgo their traditional two-storey Khmer villas for an apartment (or an office) with a view.
A new law permitting foreigners to buy condominiums in these skyscrapers will for the first time, the government hopes, encourage a wave of overseas interest.
But the new style of living might take some adjustment, according to local property experts. “Living in a condo is a new concept for Cambodian people,” says Bun Phearith, sales agent at Bonna Realty Group, one of the largest estate agencies in Cambodia. “But it’s an idea that is gaining popularity. Among our younger clients the first properties they ask about are apartments in multi-storey buildings.”
The Canadia Tower stands on Monivong Boulevard, down which Khmer Rouge soldiers marched in April 1975 when they took over Phnom Penh and began to systematically destroy all traces of urban modernity in Cambodia. In just three years, eight months and 20 days, the terrifying success of their vision caused the deaths of millions. By the time the Khmer Rouge were driven out, Phnom Penh was a ghost town.
Senaka Fernando, chairman of the British Business Association in Cambodia, arrived in the capital in 1994 as peace was finally taking hold. “Back then, when planes landed in Phnom Penh at night there was nothing to see – no lights, no large buildings,” he recalls. “The changes that have taken place here over the past 16 years are remarkable.”
Between 2000 and 2009 economic growth in Cambodia averaged 8 per cent. To reflect its success, gleaming high-rises were planned at the height of Cambodia’s property boom. The real estate sector was suddenly awash with money, and prices rose accordingly. Between 2005 and 2008 the cost of property in some areas of Phnom Penh rose from $550 per square metre to $5,000 (Cambodia’s property prices are routinely quoted in US dollars).
Developers planned a series of huge towers and a ring of satellite towns on the outskirts of Phnom Penh. Speculators bought up land for better roads, more shopping malls and larger office blocks. The tallest building planned was the International Finance Centre (IFC). This $1bn complex, backed by South Korean company GS E&C, was to have housed a shopping mall, 1,064 apartments, 275 serviced apartments and a school within its 52 storeys.
Then the bubble burst. As the global recession hit south-east Asia, building works ground to a halt and land cleared for work remained empty. Investors took their money away and, according to the International Monetary Fund, the Cambodian economy contracted by 2.5 per cent in 2009. Buildings such as the IFC tower were put on hold or scaled back and property prices in the city centre fell by up to a third.
Not even the Canadia Tower has escaped the downturn. Overseas Cambodian Investment Corporation (OCIC), owner of Canadia Bank, had hoped to persuade the country’s biggest organisations to set up shop inside. But much of the building remains empty and prospective tenants are now being offered a 50 per cent discount if they agree to lease space for a year or more.
Yet there are signs that the Phnom Penh property market is finding its feet again. Those who held on to properties as investments are now looking to sell, real estate agents say. Acleda Bank, a Cambodian commercial bank, has also reported an increase in the number of mortgages issued for residential property at the end of 2009.
Although the number of property transactions is nowhere near the heady levels of 2008, there is a feeling that the market is settling down. Thomas Sterling, country director of Cambodian property managers Sterling Project Management, believes the price crash was in some ways a good thing. “There was so much speculation that it became questionable whether there was any real market for property in Phnom Penh,” he says. “The recession has acted as a natural correction to cap prices.”
Properties in the most desirable areas, such as the riverfront, now fetch around $2,500 per sq metre, according to Bonna Realty. In the north of the city, along the wide streets of what used to be the French quarter, buyers can expect to pay around $1,250 per sq metre.
Rather than new and large-scale projects, the renewed interest is in select projects that are already under way, such as Gold Tower 42. Twenty storeys of the $300m South Korean project, financed by DaeHan Real Estate Investment and built by Yon Woo, are already up and the tower should be complete by late 2011. All of the office space, and half of the residential space has already been sold.
Across town, developers of the Diamond Island project are hoping to finish ahead of schedule. About half of the 168 homes built in the first phase of the project, on sale for $200,000-$1m, have been sold according to managers for developers OCIC. The rest was slated for completion in 2016 but the developers hope to bring this forward by two years. Other satellite towns include the Grand Phnom Penh International City, which will contain 4,000 residential units, and the $2bn Camko City project.
Interested overseas buyers have been given a helping hand by new government regulations. Previously, foreigners who wanted a stake in land had to establish a joint venture with a Cambodian national. But Cambodia still has a way to go before it attracts large numbers of overseas investors. Electricity prices are high and blackouts are not uncommon; phone networks can be unreliable and corruption is still a problem.
Foreign investors might also have qualms about buying into developments that have had a negative impact on the country’s poorest people. The losers in the evolution of Phnom Penh from backwater to international city are the citizens evicted from property that was sold to developers with minimal compensation.
But with the IMF now predicting growth of 4.8 per cent in 2010 and Cambodia’s links to the rest of the region strengthening, investors who choose carefully could find themselves first into a country attracting more international attention each year.
Elaine Moore is a personal finance reporter for the FT
Known as the “pearl of Asia” in the early 20th century, Phnom Penh has suffered years of civil war and a repressive communist regime, but its architecture of golden-tipped temples, red-roofed houses and French colonial mansions is still distinctive. The Canadia Tower, also known as the OCIC Tower, is instead designed to imitate and rival the sort of modern office space available in bigger neighbouring countries such as Vietnam and Thailand.
The soaring structure will soon be joined by other high-rises across the city, offering homes as well as offices. Some are being funded locally, others by foreign investors (mostly Korean) but all the financial backers hope they will attract wealthy foreigners and persuade locals to forgo their traditional two-storey Khmer villas for an apartment (or an office) with a view.
A new law permitting foreigners to buy condominiums in these skyscrapers will for the first time, the government hopes, encourage a wave of overseas interest.
But the new style of living might take some adjustment, according to local property experts. “Living in a condo is a new concept for Cambodian people,” says Bun Phearith, sales agent at Bonna Realty Group, one of the largest estate agencies in Cambodia. “But it’s an idea that is gaining popularity. Among our younger clients the first properties they ask about are apartments in multi-storey buildings.”
The Canadia Tower stands on Monivong Boulevard, down which Khmer Rouge soldiers marched in April 1975 when they took over Phnom Penh and began to systematically destroy all traces of urban modernity in Cambodia. In just three years, eight months and 20 days, the terrifying success of their vision caused the deaths of millions. By the time the Khmer Rouge were driven out, Phnom Penh was a ghost town.
Senaka Fernando, chairman of the British Business Association in Cambodia, arrived in the capital in 1994 as peace was finally taking hold. “Back then, when planes landed in Phnom Penh at night there was nothing to see – no lights, no large buildings,” he recalls. “The changes that have taken place here over the past 16 years are remarkable.”
Between 2000 and 2009 economic growth in Cambodia averaged 8 per cent. To reflect its success, gleaming high-rises were planned at the height of Cambodia’s property boom. The real estate sector was suddenly awash with money, and prices rose accordingly. Between 2005 and 2008 the cost of property in some areas of Phnom Penh rose from $550 per square metre to $5,000 (Cambodia’s property prices are routinely quoted in US dollars).
Developers planned a series of huge towers and a ring of satellite towns on the outskirts of Phnom Penh. Speculators bought up land for better roads, more shopping malls and larger office blocks. The tallest building planned was the International Finance Centre (IFC). This $1bn complex, backed by South Korean company GS E&C, was to have housed a shopping mall, 1,064 apartments, 275 serviced apartments and a school within its 52 storeys.
Then the bubble burst. As the global recession hit south-east Asia, building works ground to a halt and land cleared for work remained empty. Investors took their money away and, according to the International Monetary Fund, the Cambodian economy contracted by 2.5 per cent in 2009. Buildings such as the IFC tower were put on hold or scaled back and property prices in the city centre fell by up to a third.
Not even the Canadia Tower has escaped the downturn. Overseas Cambodian Investment Corporation (OCIC), owner of Canadia Bank, had hoped to persuade the country’s biggest organisations to set up shop inside. But much of the building remains empty and prospective tenants are now being offered a 50 per cent discount if they agree to lease space for a year or more.
Yet there are signs that the Phnom Penh property market is finding its feet again. Those who held on to properties as investments are now looking to sell, real estate agents say. Acleda Bank, a Cambodian commercial bank, has also reported an increase in the number of mortgages issued for residential property at the end of 2009.
Although the number of property transactions is nowhere near the heady levels of 2008, there is a feeling that the market is settling down. Thomas Sterling, country director of Cambodian property managers Sterling Project Management, believes the price crash was in some ways a good thing. “There was so much speculation that it became questionable whether there was any real market for property in Phnom Penh,” he says. “The recession has acted as a natural correction to cap prices.”
Properties in the most desirable areas, such as the riverfront, now fetch around $2,500 per sq metre, according to Bonna Realty. In the north of the city, along the wide streets of what used to be the French quarter, buyers can expect to pay around $1,250 per sq metre.
Rather than new and large-scale projects, the renewed interest is in select projects that are already under way, such as Gold Tower 42. Twenty storeys of the $300m South Korean project, financed by DaeHan Real Estate Investment and built by Yon Woo, are already up and the tower should be complete by late 2011. All of the office space, and half of the residential space has already been sold.
Across town, developers of the Diamond Island project are hoping to finish ahead of schedule. About half of the 168 homes built in the first phase of the project, on sale for $200,000-$1m, have been sold according to managers for developers OCIC. The rest was slated for completion in 2016 but the developers hope to bring this forward by two years. Other satellite towns include the Grand Phnom Penh International City, which will contain 4,000 residential units, and the $2bn Camko City project.
Interested overseas buyers have been given a helping hand by new government regulations. Previously, foreigners who wanted a stake in land had to establish a joint venture with a Cambodian national. But Cambodia still has a way to go before it attracts large numbers of overseas investors. Electricity prices are high and blackouts are not uncommon; phone networks can be unreliable and corruption is still a problem.
Foreign investors might also have qualms about buying into developments that have had a negative impact on the country’s poorest people. The losers in the evolution of Phnom Penh from backwater to international city are the citizens evicted from property that was sold to developers with minimal compensation.
But with the IMF now predicting growth of 4.8 per cent in 2010 and Cambodia’s links to the rest of the region strengthening, investors who choose carefully could find themselves first into a country attracting more international attention each year.
Elaine Moore is a personal finance reporter for the FT
26 comments:
Just keep Building and we need more of investors to do more Business in the Kingdom of Cambodia. I believe you all will make alot of profits in the future.
Thank you!
Phnom Penh is known as "Big Shit of Asia"
To 7:40AM
I know until you came along!ahahah
I'm thinking of investing in Cambodia; however, I still worry about the property law. Make sure no one will come and confiscate my business, or someone else come in and claim my business as his/hers. Can anyone tell us what are the legitimate property laws for low-scale investor?
The king(one)dom Cambodia full fills with trash. All kind of trashes.
The reasons why Cambodian people hesitate to live in condominiums, apartments, and even high-rises because it costs too much money in buying and using basic consumer products to cope living in such environment! Don't these Cambodian people buy dishwasher, refrigerator, cooler, air conditioning, fan, washing machine and dryer on...on...on. Other obstacles are the sewage system is so horrible not full developed, the electricity is so high and the rolling black happen all the time, the real danger of fire hazard and if some shit burn and no one can help you and you better jump, the removal of trash is not modern...
I swear to God if I was to live these housing in the first photo and I will go crazy because it looks more like a prison without the barbed wire. I can't picture myself living in there! Nothing is more safe and convenience than living in a single or two stories house and takes it from me!
Look like living in the Box?
All of you cambodian living in oversea don't known anything about cambodia all you just a fucking slave for american, australian and france. You need to visit cambodia and see what it change fucking bitch
Don't believe what the IMF say; it's a trap to keep Cambodians being a slave to them.
All the positive projection of the gains in that part of the country is a hoax.
Europe is sinking and the United States is sinking in financial crises.
China must be Cambodian Messiah. Yeah, that Red Dragon could eat the people up like an ox eat up the grass.
If Cambodia will do good economically awhile everyone else are reeling from lack of food and work I will have to move back home sweet home.
To 10:34AM
Stop lying! I been there and it is still a crappy place and the fucken corruption still exist! You must live in cave for you to boast like that! ahahahhahah
By the way tell your architecture designers to stop copying the Siem style architecture too much! Your current architecture design makes people go crazy!
Sawang! Phnom Penh fulls of craps and trashes all over the street and sidewalks..? dumbshit fucken people like you and your family throwing trashes all over the place..?
Phnom Penh used to be very pretty...place! but not anymore..?
I was in Phnom Penh, i went to visit Royal Palace, and i saw Kids taken a dump(Shits!) right infront of Royal Palace at river bank?...damn man! and trashes everywhere?...people throwing plastic bags all over..?
like everything new, it takes getting used to, really! i remember when i first arrived in america, i thought living in a condo or apartment is weird, now i'm used to it. same in cambodia. think about the beautiful views of the surroundings and the city for that matter.
Just imagine million and million of tourist enter Cambodia every years and this is what Cambodia has to offer and being dirty, trashy, and prison like houses everywhere...This is what Cambodia advertises to million of tourists? Just wait until these tourists get home and they waste no time in trashing Cambodia in their conversation with their friends, family, and strangers...
The ways things go in Cambodia reflect the Cambodian puppet government style of leadership! It is the same old trashy leadership style governing Cambodia for the past 30 years.
If you understand the background of Mr. Hun, he is from the low class family as well as the former member of Pol Pot soldier. And with all the power he has consolidated plus millions or billions of corrupt money he has generated, he does not care much about the country and the citizen. His dreams are invincible and rule Cambodia until someone else could topple him.
Building like this in the middle of a very busy and narrow street what do people expect? Construction like this is sheer stupid! Increase density without the extra infrastructure to cope with. I have been to see this place in Feb not impress at all because PP can not sustain as it is now with increasing population density. The dwelling in PP is suffocating most live in a self prison. Terrible place to live in.
Infrastructure in Cambodia still have a long way to go like having adequate electricity.
But the biggest impediment to development is:
corruption, corruption, and corruption. Who'd want to invest in a country that has no rule for fair play?
Clean up corruption, and build human capacity in the country and you'll see ho fast the development will go.
Man if you hate cambodia so much i suggest all of you should peal your skin off like michael jackson and become white,because we fell ashame to call you khmer.
Man if you hate cambodia so much i suggest all of you should peal your skin off like michael jackson and become white,because we fell ashame to call you khmer.
Just empty appartment , some area just like SROK KMOCH.
Those apartments like the ones in the first picture do not have any aesthetic value to the beauty of Phnom Penh. Many buildings there are just chinese and thai butt-ugly.
Phnom Penh is a suck place to live...dusty in the air like sandstoms at night? and people eating foods on the sidewalks..when it's dusty air and smoky air..? if i have to chose to live in Srok Khmer...Koh Kong is the place for me! Not Phnom Penh!
correction = sandstorm
Can someone please explain something to me. If foreigners are allowed to own the first floor and up only, not the ground floor, how do they get in and out of these buildings, especially one in the picture here? Are ther stairs at the back that we can tell from the photo?
they are allowed to lease the access from the ground floor for 99 years. LOL :-)
To 5:18PM
I am not ashamed to call myself Khmer! I am speaking the truth about the so called housing development! If these Cambodian architectures ran out of ideas and want inspiration for the house that are designed in a functional way that meet the health, the safety, and the beauty just search the internet and take a look around at those design around the world! Don't just design butt ugly looking houses because it make profit and save land! Actually most beautiful houses are compact on small land!
People are talking about house an the design instead you are talking about skin color. If you are going to change the subject at least have the courtesy to tell people in advance!
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