Mean Chey District: Property Market Review Q1 2017

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  1. 1. 1 VTRUST Journal of Real Estate 9 May, 2017 Volume 2, Issue 3 Mean Chey District: Property Prices Pick Up, as Satellite Citys Infrastructure Takes Shape AUTHOR HOEM SEIHA Director of Research, VTrust Appraisal Co., Ltd. A PUBLICATION FROM VTRUST APPRAISAL CO., LTD.
  2. 2. 2 VTRUST Journal of Real Estate | Volume 2, Issue 3 | Mean Chey District: Property Market Review Q1 2017 | Page 2 Driven by the rapid growth of residential and commercial hubs within certain areas of Mean Chey district and spill-over impacts of Boeng Cheung Aek Development Plan, which covers some parts of Mean Chey, Dangkao, and Takhmao, Mean Cheys property prices saw a slight pick-up. In the first quarter of 2017, prices of landed properties and land parcels across the district grew by 5.6 percent (2017Q1-over-2016Q1), despite negative property market sentiment over the course of last year. Average land prices in the first quarter of 2017 across the district ranged between US$850 and US$1,200 per sqm. Whereas minimum land price could be as low as US$150 per sqm in the least developed zones, maximum land price (exclusive of buildings or structure) in the bustling commercial hubs could be as high as US$4,470 per sqm. Mean Chey also saw a big jump in the completion of cluster landed housing units in 2016, having up to 1,500 units finished within the year. Even more, other projected completion of 2,700 housing units will add to the existing figure by the end of 2017. As of today, cumulative supply of landed housing units reaches 9,400 units across the four communes of Mean Chey district. In term of development trends, Mean Chey has enormous potential for its partial coverage of Boeng Cheung Aek development zone known as ING City, which lies across some parts of Mean Chey, including Dangkao district and Takhmao province. The zone is expected to become a satellite city with a central hub for mixed-use development, while the nearby areas will also see the impacts. Market Summary
  3. 3. 3 VTRUST Journal of Real Estate | Volume 2, Issue 3 | Mean Chey District: Property Market Review Q1 2017 | Page 3 Mean Chey Market Review Introduction Subdivided into four communes, Mean Chey district (Khmer: ) is situated near south of the central busi- ness districts (CBDs) of Phnom Penh, the capital city of Cambodia. With population of about 200,000, Mean Chey is adjacent to some part of Chamkar Mon district and shares borders with other districts such Chbar Ampov, Dangkao, and Pou Senchey (See indicative map 1). Formerly, Mean Cheys administration included the current district of Chbar Ampov, but later in 2013, the eastern part of Mean Chey was administratively separated and formed into another district which is currently Chbar Ampov. To- day, Mean Chey composes of only four communes, namely Stueng Mean Chey (Khmer: ), Boeng Tumpun (Khmer: ), Chak Angrae Leu (Khmer: ), and Chak Angrae Kraom (Khmer: ). Land Market Due to many large vacant parcels across the district and ING Citys development plan which partially covers two communes of Chak Angrae Leu and Chak Angrae Kraom, land market in Mean Chey district has drawn interest from speculative buyers and developers alike. This has created a high demand over the areas and thus caused property prices to go up, albeit slightly, amidst the property market slow- down across the capital. Prices of landed properties and land parcels in Mean Chey district grew 5.6 percent in the first quarter of 2017 as com- pared to the same period last year. Average land price across the district was US$1,190 per sqm in Q1 2017, though prices could vary greatly dependent on different zones and communes within the district (See figure 1). In Boeng Tumpun, for example, average market price of land parcels was about US$1,200 per sqm in the first quar- ter of 2017, although in a peripheral, vacant zone, market price was as low as US$300 per sqm (See figure 1). Indus- trial estate, exclusive of buildings and structure, could range between this lowest market price and as high as US$1,500 per sqm dependent on how bustling the locations are. Mar- ket prices of landed properties, exclusive of buildings and structure, in a residential township or zone ranged between US$740 and US$1,350 per sqm. Shophouses and commer- cial properties, exclusive of buildings and structure, on a secondary street in a good location had an average market price of US$1,500 per sqm, and on a major prime street the average market price could be as high as US$3,300 per sqm. Indicative Map 1: Mean Chey district and its neighboring districts, as a part of the capital of Phnom Penh
  4. 4. 4 VTRUST Journal of Real Estate | Volume 2, Issue 3 | Mean Chey District: Property Market Review Q1 2017 | Page 4 Chak Angrae Kraom had a relatively lower market price than any other communes of Mean Chey district, for its prime street shophouse and commercial estate prices for different locations only ranged between US$1,230 and US$2,300 per sqm, which those prices are exclusive of buildings and structure (See figure 1). Prime Street Pricing Main and prime streets remain the most attractive target for commercial purposes. The fact contributes to a high demand on properties along those streets, putting them on a higher market value compared to those far off the main streets. Landed properties as well as land parcels along Samdech Monireth Blvd., also known as St. 217, in Stueng Mean Chey commune had an average market price of US$2,490 per sqm, exclusive of buildings and structure, even though prices could vary greatly due to different determinants such as zoning, property type, or location (See figure 2). A low market price for land parcels along the mentioned street stretching near north started from US$1,450 per sqm, while a high market price on the same street could be as much as US$4,470 per sqm, and those properties could be found nearby, surrounding or adjacent to New Mean Chey Market. Chamkar Doung Street, also known as St. 217, which inter- links from Samdech Monireth Blvd., has been recently im- proved and widened, causing market prices to appreciate due to increased demand. The average market price along this street was about US$830 per sqm, whereas the market prices ranged from US$800 to US$1,200 per sqm depend- ent on location and property type (See figure 2). Market Performance Property markets across Mean Chey district were still rela- tively strong in 2016, albeit weaker market for large parcels of land. Tracked over a period from Q1 2016 to Q1 2017, only 14 percent of the properties in the form of land parcels and landed properties were reported to be sold, 37 percent un- sold, and 49 percent with status unknown. Chak Angrae Leu had the highest sold rate, 25 percent, followed by Stueng Mean Chey, 17 percent (See figure 3). Chak Angrae Leus better sales were thanks to a prominent development trend over some parts of this commune, hav- ing drawn interest from speculative investors and buyers into the areas where ING Citys master plan has been Q1 2 0 17 A v e ra g e M a rke t P ric e (P .S QM ) So ld-to -Lis t P rice Ratio (2016) Y-o -Y As king P rice Gro wth 2016Q1-2017Q1 MEAN CHEY DISTRICT $ 1,19 0 92.1% 5.6% Min Va c a nt La nd, Industria l Prope rty Re side ntia l Townhouse Shophouse , Comme rc ia l Prope rty Boeng Tumpun $ 1,2 0 0 93.1% 4.5% $300 $300 - $1,500 $740 - $1,350 $1,500 - $3,300 Chak Angrae Kraom $ 8 5 0 93.6% 6.6% $150 $150 - $1,230 $470 - $1,230 $1,230 - $2,300 Chak Angrae Leu $ 1,18 0 88.9% 5.1% $300 $300 - $1,500 $750 - $1,300 $1,550 - $3140 Stueng Mean Chey $ 1,2 0 0 92.6% 6.1% $300 $300 - $1,330 $750 - $1,330 $1,330 - $4,470 No te : Avg =ave rage ; Min =minimum; Max =maximum; y- o- y =ye aron ye ar; H1, H2 =first half, se c ond half; Q1, Q2 , Q3 =1st quarte r, 2nd quarte r, third quarte r; P.S QM =pe rsquare me te r S o urc e : VTrust AppraisalRe se arc h De partme nt INDICATIVELAND MARKET PRICEPER SQM, MEANCHEYDISTRICT Q1 2017 P rice Range P .SQM, Stratified by Co mmune Figure 1: Indicative land market prices in Mean Chey district Street Name Within the Commune of Starting Point Direction Ending Point Distance (Appr.) Price Range (Appr.) Avg. Price (Appr.) YKP Blvd. (St. 271) Boeng Tumpun Khmer-Soviet Friendship Hospital Heading southeast until St. 371 (Tumnup Thmey) 3.18 km $1,400 - $3,300 $2,420 YKP Blvd. (St. 271) Stueng Mean Chey Chea SimSamaky High School Heading southeast until Entrance to Sovanna Mall 1.61 km $1,400 - $3,300 $2,450 Tumnup Thmey Street (St. 371) Boeng Tumpun Entrance to Wat Angponhean Heading west to east until St. 271 (YKP Blvd.) 3.40 km $550 - $2,270 $1,050 Sola Street (St. 371) Stueng Mean Chey Veng Sreng Blvd. Down northward until Tela Petrol Station 1.60 km $800 - $2,300 $1,200 National Road 2 Chak Angrae Kraom Kbal Thnal Skybridge Intersection Heading south until Bus Stop No. 47 1.51 km $750 - $2,300 $1,530 National Road 2 Chak Angrae Leu MRC Secretariat in PhnomPenh Heading south until Preah Noreay SokimexGas Station 2.78 km $1300 - $3,100 $1,780 Samdech Monireth Blvd. (St. 217) Stueng Mean Chey Stueng Mean Chey Skybridge Heading southwest until ACLEDA's Stueng Meanch Branch 1.89 km $1,450 - $4,470 $2,490 Chamkar Doung Street (St. 217) Stueng Mean Chey SokimexGas Station Intersection Heading south until Stueng Mean Chey II Bakery 1.41 km $800 - $1,200 $830 Note: P.SQM = per square meter; YKP Blvd. = Yothapol Khemarak Phoumin Boulevdard. Appr. = Approximate. Disclaimer: Distances and price ranges indicated above are indicative values only. While the figures might be close to the actual ones, they might not be 100% accurate due to rounding and other statistical implications. Source: VTrust Appraisal Research Q1 2017 MEAN CHEY DISTRICT'S PRIME STREET PRICES Price Range P.SQM, Stratified by Streets within the District, Q1 2017 Figure 2: Indicative land market prices stratified by streets
  5. 5. 5 VTRUST Journal of Real Estate | Volume 2, Issue 3 | Mean Chey District: Property