Phnom Penh Powers On In H1 2014 Land Index

• Proeksa Meas
• 31 December 2015
• Local News
• 1735 Views

The first half of 2014 saw Knight Frank’s Prime Asia Development Land Index advance 4.9% and 2.9% for office and residential sites respectively. This represents a loss in momentum when compared to the 9.8% and 7.7% respective growth rates in H1 2013.

While land transaction volumes in Asia dropped 5.0% year-on-year in H1 2014, investment inflow from outside Asia saw a fourfold increase from the same period last year.

For residential sites, Bangkok, Jakarta and Phnom Penh saw the largest positive percentage change in the index. In particular, Bangkok saw the largest increase at a stellar 18.2% in H1 2014.

For office sites, Jakarta and Phnom Penh similarly saw strong growth in the index. Bengaluru topped Asia for office sites at 9.2%; Abenomics continued to drive demand for commercial land in Tokyo, which takes the fourth place on the index for prime office development land with 5.8%.

In Phnom Penh, with the launch of The Bridge and the opening of Vattanac Tower setting record condominium prices (≥ US$3,000 per sq m) and office rents (≥ US$25 per sq m) respectively in Q2 2014, growths in the prices of residential and office development sites accelerated in the first six months, registering 13.7% and 7.6% respectively.

Prices appeared to have peaked in most key Chinese markets in Q1 2014, although land prices in Beijing and Shanghai are expected to be well supported in the medium to long term.

“One reason for the deceleration is the slowdown in China, although activity also fell across the rest of Asia: in H1 2014, investment volumes totalled only 37.6% of the amount achieved in the whole of last year. Interestingly, in terms of cross-border deals, investment inflow originating from outside Asia during H1 2014 has already surpassed its total volume in 2013 by 76.1%,” Nicholas Holt, Head of Research for Asia Pacific, Knight Frank.