CAMBODIA COUNTRY REPORT 2015 Presented by Mr. Sung Bonna September 2015 Battambang Branch Head Office Bonna Asset Appraisal Department #126, Norodom Boulevard, Sangkat Tonle Basak, Khan #102, Street No. 3, Group 37, 20 May Village, Sangkat Svay #126, Norodom Boulevard, Sangkat Tonle Basak, Khan Chamkarmourn, Phnom Penh. Chamkarmourn, Phnom Penh. Por, Battambang City, Battambang Province. (+855) 61 91 81 / 11 27 77 83 (+855) 17 959 920 / (+855) 53 953 959 (+855) 23 861 999 info@bonnarealty.com.kh Sihanoukville Branch Siem Reap Branch www.bonnarealty.com.kh National Road 6, Phum Khnar Thmei, Sangkat Chreav, #99, St. Ekareach, Sangkat 4, Preah Sihnouk Province, Cambodia. Siem Reap City. (+855) 63 96 33 99 / 12 50 63 24 (+855) 34 934 809 / (+855) 23 993 392
PART I: CAMBODIA ECONOMICS OVERVIEW
DEVELOPMENT PROJECT IN PHNOM PENH Since 1999 3
FACTOR EFFECT TO REAL ESTATE Economic Interest Political Rate Population Since 1999 4
I. POPULATION GROWTH - Based on this statistic show that in average Population Growth in Cambodia 1998 to 2015 the population growth approximate 11%. 18,000,000 15,394,276 16,000,000 14,248,812 - To compare between 2015 and 2010 the 13,395,682 14,000,000 11,437,656 12,000,000 population growth in Cambodia increase 10,000,000 around 10%. 8,000,000 6,000,000 - In Phnom Penh increased around 32% in 4,000,000 1,327,615 1,095,397 1,445,902 2015 compared to 2010 and around 9% 999,804 2,000,000 - compared to 2008. 1998 2008 2010 2015 Cambodia Phnom Penh Total Population in Cambodia: 15,394,276 Phnom Penh: 1,445,902 Source: Ministry of Planning Data as of: April 2015 Since 1999 5
II. CAMBODIA GDP GROWTH RATE - In 2015 as an estimation the GDP will be growth approximately 7% again due to the expansion of garment manufacturing, construction, and services in particular tourism, finance and real estate services. GDP Growth Rate 7.30% 7.20% 7.20% 7.20% 8.00% 7.00% 6.00% 5.90% 6.00% 4.00% 2.00% 0.00% 2010 2011 2012 2013 2014 e 2015 e 2016 Source: ADB Data as of: September 2015 Since 1999 6
III. FOREIGN DIRECT INVESTMENT (FDI) - Regarding to the report from the Council for Development of Cambodia found that FID of first three months 2015 (approximately 2,872.7 million USD) has increased 5 times compared to the same period of 2014 (approximately 446 million USD). Number of Project Investment in Capital Investment in Q1 2015 Q1 2015 2500 2000 40 35 1500 30 25 Q1 20 1000 Q1 15 Q2 10 500 Q2 5 Q3 0 Q3 0 Agriculture Industry Service Tourism Agriculture Industry Service Tourism Q4 Agriculture Industry Service Tourism Agriculture Industry Service Tourism Q4 2014 5months 2015 2014 5months 2015 Capital Investment Q1 2015: 2,872.7 million USD Number of Project Investment: 37 Projects Source: CDC Since 1999 7
IV. NUMBER OF TOURIST ARRIVAL - Due to the report from Ministry of Tourism of Cambodia in 2014 number of tourist increase around 7% compare to 2013 which contribute approximate 2.7 billion USD (Increased 7%) to GDP of Cambodia. - For six months of 2015 number of tourists have arrived Cambodia approximate 2.3 million tourists increased around 4.6% compared the same period in 2014. Number of Tourist Visit in Cambodia 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Jun-2015 Source: Ministry of Tourism, Cambodia Data as of June 2015 Since 1999 8
NUMBER OF BUILDING & FLOORS - In 2015, the building which approve to Number of Building construct from 5-9 th floor increase 500 approximate 30% while the huge 407 400 310 amount of building construction from 300 20-29 th floor increase approximate 2014 187 200 2015 600% compare to 2014. 67 100 22 For 2 nd Quarter 2015 the total capital 3 5 8 1 4 - 0 investment equal 808 million USD. From 5 - 9 From 10 - From 20 - From 30 - From 40 Floor 19 Floor 29 Floor 39 Floor Floor up Capital Investment Average Percentage Changed 63% $3,500 Millions Source: Ministry Land Management Urban Planning and Construction $3,000 Data as of Q1 2015 $2,500 $2,000 $1,500 $1,000 $500 $- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q2 2015 Since 1999 9
AVERAGE CREDIT INTEREST RATE - Due to Report from NBC in Cambodia has 36 commercial Loan in Real Estate Sector banks, 11 Special Banks, 41 MFIs. 2,500 Million USD 25.0% 22.7% - As of June 2015 total loan for real estate sector approximately 2,000 Million USD 20.0% 18.9% 18.5% 18.4% 16.8% 16.4% 16.1% 2,021.83 million USD which consist of Housing Loan 15.3% 1,500 Million USD 15.0% 1,000 Million USD 10.0% approximately 699.09 million USD, Construction Loan 500 Million USD 5.0% approximately 889.41 million USD and related to real estate Million USD 0.0% activities approximately 433.33 million USD with an average interest 11.2% per annum for USD currency. Total Loan Loan in Real Estate Sector Average Credit Interest Rate per Annum 23.1% 22.3% 22.4% 25.0% 23.1% 22.8% 19.4% 18.6% 20.0% 15.9% 16.3% 15.8% 15.0% 11.8% 16.2% 16.7% 16.4% 17.2% 15.4% 16.0% 15.8% 10.0% 11.6% 11.5%11.2% 11.4% 5.0% 0.0% Reil USD Source: National Bank of Cambodia Since 1999 Data as of Jun 2015 10
PART II: REAL ESTATE OVERVIEW IN CAMBODIA
OFFICE SPACE - The estimation of total current supply for 2015 approximately 300,000s sqm increased approximately 15% compared to the same period 2014. If everything stability the total supply in 2018 will be increase up to 345,000 sqm. - Average increase annually around 10%. Total Supply Forcasting Office Supply 400,000 Sqm 350,000 Sqm 300,000 Sqm 250,000 Sqm 200,000 Sqm 150,000 Sqm 100,000 Sqm 50,000 Sqm Sqm 2013 2014 2015 e2016 e2017 e2018 Data as of March 2015 Since 1999 12
OFFICE SPACE • In 2015, the Grade “A” office has been supply around 27% in the market while Grade “B” supply around 71% and Grade “C” around 2%. • For 2015 the supply on Office Grade “A” increased around 10% compare to 2014 while Grade “B” declined around 10% and Grade “C” still remain unchanged. Total Supply by Grade 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Grade A Grade B Grade C 2015 2014 2013 Since 1999 13
OFFICE SPACE (CON’T) Comparing Rate between Q1 2015 to Q1 2014: Average Rental Price Grade A: 11% increased $29.50 $30.00 $26.50 Grade B: 17% Increased $25.00 $20.00 $17.50 Grade C: 20% increased $15.00 2015 $15.00 2014 Average Percentage Changed 48% $9.00 $10.00 $7.50 (The price per sqm include VAT but it is not $5.00 include management fee) $- Grade A Grade B Grade C Data as of March 2015 Since 1999 14
OFFICE SPACE (CON’T) - To compare between Q1-2015 with Q1-2014 the occupancy rate has been declined about 4%. - There some reasons for declining occupancy rate: • Large amount of supply • Move out to independent building • Increasing renting price Occupany Rate from 2006-Q1 2015 Comparing Occupany Rate by Quarter 120% 100% 90% 100% 80% 80% 70% 60% 60% 50% 40% 40% 30% 20% 20% 0% 10% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 0% 2015 Q1-2015 Q1-2014 Q1-2013 Occupancy Rate Vacant 2 per. Mov. Avg. (Occupancy Rate) Occupancy Rate Vacant Since 1999 Data as of March 2015 15
RETAIL - Total Supply 2015: Approximately 370,000 sqm Forcasting Total Supply of Retailby Year 1,000,000 Sqm - Total Supply 2014: Approximately 350,000 sqm 800,000 Sqm - Average Percentage approximate 5% increased 600,000 Sqm - The total supply also included the Constructed building 400,000 Sqm 200,000 Sqm around 14 retail. Sqm 2013 2014 2015 e2016 e2017 e2018 - Just an estimation in 2018 the retail will increase Data as of March 2015 approximate 900,000sqm with projects 27 projects Since 1999 16
RETAIL (CON’T) - Based on research study show that rental fee has been declined in average 20% due to large amount of supply as well as the price competition between new comer and existing retail on the market. - The market price of renting has been change at the low level in order to attract more tenants. - However, in range of rental fee still get the high gap between low price and high price in to 2015. Range Price 2015 Range Price 2014 Rental Price for Rentail Min $ 7 $ 20 $ 16 $ 30 100 90 Average $ 12 $ 60 $ 30 $ 55 80 70 Max $ 18 $ 100 $ 43 $ 90 60 50 (The rental fee will be change based on the location of the store and class of retail) 40 30 20 10 0 Min Average Max 2015 2014 Data as of March 2015 Since 1999 17
RETAIL (CON’T) • Occupancy rate 74% in 2015 while in 2014 Occupancy Occupancy Rate of Retail in Phnom Penh rate 80% declined around 6% 90% 80% • There are some factors made occupancy rate to be 70% declined such as: 60% 50% - Increasing Supply on the Market 40% - People expected on the quality of product due to living 30% 20% standard growth. 10% - Customers need modernization of facilities and good 0% 2015 2014 2013 design. Occupancy Rate Vacant Data as of March 2015 Since 1999 18
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