Download - Mean Chey District: Property Market Review Q1 2017

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VTRUST Journal of Real Estate 9 May, 2017 Volume 2, Issue 3

Mean Chey District: Property Prices Pick Up, as Satellite City’s Infrastructure Takes Shape

AUTHOR

HOEM SEIHA Director of Research,

VTrust Appraisal Co., Ltd.

A PUBLICATION FROM

VTRUST APPRAISAL CO., LTD.

2 VTRUST Journal of Real Estate | Volume 2, Issue 3 | Mean Chey District: Property Market Review Q1 2017 |

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 Chey’s 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 VTRUST Journal of Real Estate | Volume 2, Issue 3 | Mean Chey District: Property Market Review Q1 2017 | Page 2 VTRUST Journal of Real Estate | Volume 2, Issue 3 | Mean Chey District: Property Market Review Q1 2017 |

Mean Chey Market Review

Introduction

Subdivided into four communes, Mean Chey district

(Khmer: ខណ្ឌ មានជយ័) 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 Chey’s 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: សង្កា តស់ទ ឹងមានជយ័), Boeng Tumpun

(Khmer: សង្កា តបឹ់ងទំពុន), Chak Angrae Leu (Khmer: សង្កា ត់ចាក់

អង្រងល ើ), and Chak Angrae Kraom (Khmer: សង្កា ត់ចាក់អង្រងលរោម).

Land Market

Due to many large vacant parcels across the district and

ING City’s 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


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 Leu’s 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 City’s 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,

Indus tria l

P rope rty

Re s ide ntia l

Townhouse

S hophouse ,

Comme rc ia l

P rope 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 ar on ye ar; H1, H2 = firs t half, se c ond half; Q1, Q2 , Q3 = 1s t

quarte r, 2nd quarte r, third quarte r; P.S QM = pe r square me te r

S o u rc e : VTrus t Appraisal Re se arc h De partme nt

INDICATIVE LAND MARKET PRICE PER SQM, MEANCHEY DISTRICT

Q1 2017

P rice Range P .SQM, Stra tified by Co mmune

Figure 1: Indicative land market prices in Mean Chey district

Street NameWithin 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 Sim Samaky 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 Phnom Penh Heading south until Preah Noreay Sokimex Gas 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 Sokimex Gas 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


mapped. On the other hand, Stueng Mean Chey was able to

better perform because it has been a newly developed com-

mercial and residential hub with a higher population density

than the other two communes within Mean Chey district.

Market Prices and Trends

Average sale-to-list price ratio (SP-to-LP) 2017Q1 over

2016Q1 in Mean Chey district was 92 percent, meaning

that every final closed price went below the original list

price by eight percent on average (See figure 4). This ratio

indicated a stronger bargaining power among buyers due to

a weaker demand compared to the market supply.

Nevertheless, asking price trends still moved upwards dur-

ing the same period, causing average last-to-initial list price

ratio to stand at 105.6 percent, meaning that the market

price increased by 5.6 percent y-o-y throughout the four

communes. In spite of the slow market absorption and long-

er marketing time, players speculated that the market would

do well in the next couple of years, thus bringing down the

prices was not necessary at the moment.

Low-Rise Housing Market

Mean Chey district witnessed a strong growth in low-rise

housing market in the last few years, albeit some slowdown

in new unit launches in 2016, while it was slated to have no

further new launches into 2017. However, the district saw a

tremendous number of new constructed houses in 2016,

having almost 1,500 units finished. Even more, 2,700 of

additional units, especially in Stueng Mean Chey com-

mune, were predicted to be finished by the end of 2017.

Total cumulative supply of low-rise housing, including ex-

isting and ongoing construction, in Mean Chey was about

9,400 units, updated as of 2016 (See figure 5).

Market Share by Commune

Stueng Mean Chey boasted the majority of low-rise hous-

ing clusters, sharing up to 68 percent (or 5,986 units) of the

total cumulative supply in Mean Chey district as of end of

2016. The rest shared other 32 percent (or 2,785 units) (See

figure 6).

Stueng Mean Chey is a newly developing and major hub

for residential, commercial, and industrial activities of

Mean Chey district, located Near South of the four central

commercial districts. A greater number of housing supplies

flowed to the this commune than any other areas thanks to

its better improved infrastructure, nearest links to Phnom

Penh’s main central parts, and various amenities that ease

the livelihoods of residents in the areas.

Market Share by Project

Peng Huoth, one of the few biggest and well-known hous-

ing projects in Phnom Penh, shared 14 percent (or 1,375

units) of the cumulative market supply in Mean Chey dis-

trict as of end of 2016 (See figure 7). The majority of the

housing projects in the district were small-scale and un-

branded, often with 50 to less than 100 units of terraced

houses clustering across the whole district. These projects

accounted for 63 percent (or 5,910 units). Other cluster

housing projects such as Sony and Sorla accounted for 21

percent (or 1,939 units) as combined.

Figure 3: Land market performance in Mean Chey district

Figure 4: Mean Chey’s property market pricing trends

Figure 5: Cluster housing market supply by year, Mean Chey

Figure 6: Market share by commune in Mean Chey district


Market Share by Home Type

In Mean Chey district, purpose-built shophouses accounted

for only 1.9 percent (or 176 units) of the total cumulative

supply, both finished and ongoing, as of end of 2016. Link-

houses, also known as terraced houses, were the most com-

mon home type in the district, sharing up to 90.1 percent

(or 8,364 units). Semi-detached houses, which are often

highly-priced, accounted for 6.8 percent (or 634 units);

whereas single-detached houses, which are more expensive

than any other types, accounted for only 1.2 percent (or 113

units) (See figure 8).

Linkhouses are popular not only in Mean Chey district but

also across all other districts of the capital because of their

much lower prices, being affordable by the majority of

home buyers.

Semi-detached and single-detached homes, mostly offered

by Peng Huoth’s development project, are intended for up-

per-middle to high-end market segments.

Outlooks and Trends

The notion of urban expansion has been echoed differently

across the capital, because each voice follows a developer’s

interest, reported B2B Cambodia in August last year. Some

said that the urban should expand northwards, while others

argued it should go westwards.

However, the most famous local architect Vann Molyvann

gave out reasons why the urban should expand to the south.

“I think that if the city develops to the south it is better than

to the west as the south is an area that is higher above the

river, which is key to avoiding floods,” said Molywann, as

quoted by B2B Cambodia in August last year.

Whatever the arguments have been made, the urbanized

Phnom Penh has already sprawled out to many different

Figure 7: Market share by project in Mean Chey district

Figure 8: Market share by home type, Mean Chey district

A close-up view of a part of the planned site. Photo: Google Earth Imaging

An artist’s impression for ING City Aerial image of the planned development site. Photo: Google Earth Imaging

Indicative Map 3: ING City Master Plan, close-up view of a partial site, ING City artist’s impression, and current aerial view of the development site

Indicative Map 4: Cluster housing concentration in Phnom


directions: north (Sen Sok district), west (Pou Senchey dis-

trict), east (Chroy Changvar district), not to mention south

(Mean Chey district, Dangkao district, and Takhmao city).

As of today, the western district of Pou Senchey has attract-

ed most of low-rise residential cluster development pro-

jects, having a total of 26,800 housing units, both finished

and still underway. Sen Sok is the second largest attractive

hub, having 18,400 units currently finished and ongoing

across its four communes, especially Phnom Penh Thmey

(See indicative map 2). While these are examples of how

the capital has expanded, housing clusters and residential

compounds tend to move into many directions, creating

new hubs and communities to ease traffic pressure in the

inner city center and relocate to the affordable periphery.

The interlinks between the central urban areas and the outer

newly developed areas ensure that people can still access to

key parts of the capital.

While there is no exception for Mean Chey district, it has

already hosted a total of 9,400 low-rise cluster housing

units, the major of which were completed within 2003 and

2016 and others due to completion by the end of 2017.

Ongoing and Future Development

Many outer parts of Mean Chey district have huge potential

for urban expansion, with a notable satellite city known as

Boeng Cheung Aek Development or ING City underway

and expected to take shape within the 2020s. ING City,

covering 2,572 hectares of land, including a 520 hectare

water reservoir, stretches across the wetland and reservoirs

of Boeng Tumun and Boeng Cheung Aek as well as some

parts of Chak Angrae Leu and Chak Angrae Kraom (Mean

Chey district), as well as some other parts of Dangkao and

Cheung Aek (Dangkao district) and Kankal province (See

indicative map 3).

A large part of Chak Angrae Leu of Mean Chey district,

sandwiching the newly built Hun Sen Boulevard, is desig-

nated for low- and mid-rise residential zone. For example,

borey Peng Huoth, a gated community housing project and

located on Tomnup Thmey Street (or St. 371), has been

developed on the edging part of the master plan.

This massive satellite city is a mixed-use development,

comprising mainly of residential, commercial, industrial

zones along with many other public amenities such as

schools, sports complex, bus interchange, and shopping

areas, to name a few. Some of the development projects

have been already there, namely International School of

Phnom Penh (ISPP), an automobile showroom of Mer-

cedes, and the 209-resident-unit Villa Town.

Up to date, a large part of wetland and reservoir has been

filled, while key infrastructure such as interlink and ring

roads has been built to provide basic access to the develop-

ment sites as well as to the inner city center. Key infrastruc-

ture that has been either built or underway is, for instance,

Hun Sen Boulevard, an arterial road running through the

planned development areas; and Phlov Hoksib Maetr (or

Street 60 Meters), a ring road interlinking with the satellite

city, southern parts of Phnom Penh and Takhmao city

A close-up view of a part of the planned site. Photo: Google Earth Imaging

Aerial image of the planned development site. Photo: Google Earth Imaging

Indicative Map 3: ING City Master Plan, close-up view of a partial site, ING City artist’s impression, and current aerial view of the development site

Image 1: Dec-2013 status of Hun Sen Blvd. development

Image 2: May-2017 view of Hun Sen Blvd. dev’t progress

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Contact VTrust Appraisal Co., Ltd. Parkway Square, Mao Tse Tong Blvd., Phnom Penh, Cambodia Contact: (+855)23-220-098 Email: [email protected] Website: www.vtrustappraisal.com Century 21 Mekong Parkway Square, Mao Tse Tong Blvd., Phnom Penh, Cambodia Contact: (+855)23-966-577 Email: [email protected] Website: www.c21mekong.com.kh

Author Hoem Seiha (Mr.) Director of Research | VTrust Appraisal Co., Ltd. Tel: +855-23-220-098 | H/p: +855-12-699-553 Email: [email protected] Website: www.vtrustappraisal.com Advisory Research Committee Sim Hoy Chhoung | CEO | VTrust Appraisal Chrek Soknim | CEO | Century 21 Mekong In Sitha | Business Development | VTrust Appraisal Tarek Genena | Consultant | VTrust Appraisal Phin Sopthea |Valuation Manager| VTrust Appraisal

9 May, 2017 Volume 2, Issue 3

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Disclaimer VTrust Appraisal Co., Ltd. informs that the information, including figures, statistics and opinions, is one gained from resources deemed reliable and expressed solely by the authors of this publication but does not necessarily reflect the viewpoints of VTrust Appraisal Co., Ltd. Therefore, VTrust Appraisal does not guarantee or bear any responsibility for any failures pertaining to the information contained herein.

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