VTRUST Releases Capital’s First Land Price Survey

• 31 December 2015
• Property Focus
• 2117 Views

Many property firms in Cambodia have had to use their own land price evaluations due to the fact that no recognized, accurate data on prices existed before. But now they have a new information source since the first land price survey for Phnom Penh, compiled by the Vtrust Group, is now complete.

Released on March 4, the new land price survey was conducted in November and December last year by three VTrust Group subsidiaries – VTrust Property, VTrust Appraisal and VTrust Realty – and covers all of Phnom Penh’s nine districts and 96 communes. For the survey, 660 property traders were interviewed.

The evaluation found the average asking price of land in Phnom Penh in the fourth quarter 2013 was USUS$1,140 per square meter (sqm). The minimum price was about US$10 per sqm while the maximum reached US$5,900 per sqm.

The sample land surveyed was largely residential (64 percent) while the remainder comprised commercial, industrial or developing areas. Most of the surveyed land was occupied with only 38 percent being vacant. The ten areas with the highest land prices were located in industrial and residential areas, had good infrastructure development and were close to markets or on busy streets. Prices in these areas – Boeung Keng Kang, Phsar Tmey, Phsar Daeum Kor, Chaktomouk, Chey Chumneah, Prampir Makara, Tumnum Tuek, Ou Russey, Oulampik, and Russey Keo – ranged from US$4,500 to almost US$6,000 per sqm.

On the other end of the scale, the lowest land prices were seen in areas with little or no industrial or residential development, poor infrastructure, and locations far from the city center. Prices in these areas – Ponhea Pon, Por Sen Chey, Spean Thma, Samraong, Kamboul, Phleung Chheh Roteh, Trapeang Krasang, Prey Sa, Krang Thnong, and Prey Veang –ranged from US$10 to US$50 per sqm.

The land prices above are generally include the prices of any buildings on it (the minimum price percentage the building shared was 7 percent of the gross land price while the maximum was 24 percent) since the land samples chosen for the survey had been built upon. The size and location of land and features of the existing building(s) on it also affected the land price.

Chit Uys Stevexo, CEO of VTrust Appraisal, said that the report should make property transactions easier and more transparent. “With this research report I believe land sellers will know how much to ask, and land buyers will know how much to offer,” he said. “That will create an easier trading environment that both sides can accept.”

Anna Araki, CEO of Japanese investment consultancy AnnaCam Partners, said she appreciated the survey since up to now, her company has had to rely on its own land price survey cobbled together from a variety of sometimes less-than-comprehensive surveys from other property agencies.

“When Japanese investors come to Cambodia, they will study this survey while making their investment decision,” says Araki. “We will present this report to Japanese investors in Japan to attract them to Cambodia as well.”

However, she recommends the survey be regularly and accurately updated, and include land price mapping so that foreigners who don’t know Phnom Penh well can easily get a grasp on the big picture.

Chrek Soknim, deputy director of VTrust Property, said he expected land prices to increase around 10 percent to 15 percent. “In 2015, the situation will improve even more with ASEAN economic integration, which should lead to an increased flow of investors coming to Cambodia, pushing land prices up.”

With the success of this survey, the VTrust Group plans to launch land price surveys in Cambodia’s provinces as well.