Image credit: https://www.khmertimeskh.com/676620/how-to-start-a-real-estate-agency-in-cambodia/
Prepared by:
Ms. NGET Jenny
Mr. TEK David
Ms. YANG Xiaoya
Supervised by:
Mr. Touch Thavrith
Abstract 2
Borey 4
Condo 5
Land 6
Abstract
This report analyzes the key points of top Boreys in Phnom Penh including Borey Peng Huoth, Chipmong, and Orkide in detail with additional information on property ownership in Cambodia regarding land titles, tax obligations, and how foreigners can own properties in the Kingdom of Cambodia. To answer these components, we were doing desk research on the information we could find online, and we went to each Borey's sales gallery to talk to their sales agents in order to gather additional information. The results of our report showed the strengths and weaknesses of each project and the catalysts that make them the top real estate developers in the country.
Scope and Limitations
There are several projects under each Borey in Cambodia. Therefore, our study focuses on each project in those three main Boreys in Cambodia - Borey Peng Houth Star Eco-Romance, Borey Chip Landmark 271, and Orkide Development.
Our team, under the GMA program, was paired up to conduct a visit to each borey’s site and discuss in oral conversations with the salesperson of each sales gallery. The purpose of this is to seek answers from face-to-face meetings in order to fulfill our research paper. This research paper aims to produce a fundamental understanding and deepen additional knowledge of Real Estate models and markets in Cambodia. The main answers to the finding come from 3 sources which are primary data, secondary sources, and personal observations. However, this research paper might not represent insightful data or detailed information because some information is confidential.
In our research, we have faced a couple of challenges such as unreliable sources and insufficient information that hampers our research project. We also have limited resources and a small period of time. In addition to that, some critical information is unreachable or not available because Cambodia is a newly emerging real estate market. As a result, we only examine a single project under each Borey with the best options and choices available.
Property Ownership:
In Cambodia, for Boreys, flats, and condos; we can classify the type of market as primary or secondary. The primary market is the one that is recently developed and has not yet been owned by customers. Whereas secondary market refers to houses, or units that have been owned by someone else and are being resold on the market. Under Article 44 of the Cambodian Constitution, “only natural persons or legal entities of Khmer nationality shall have the right to land ownership.” However, they can legally own properties, be it condominiums, apartments, or offices, as long as it is not located on the ground floor of a building (and at least 30% of the other properties in the building are Cambodian owned). In the case of owning landed properties, below are four ways for foreigners to legally own them:
❖ Land Holding Company: Forming a land holding company (LHC) where 51% of shareholders are owned by a Cambodian citizen and 49% of shareholders are owned by foreigners.
❖ Trust Company: A trust company with a trustee license can act as a legal representative for investors to purchase landed property in Cambodia and hold the property owners on their behalf.
❖ Cambodian Citizenship: Acquire Cambodian ID.
❖ The Nominee Structure: It's considered the highest risk among all the 4 ways, where a foreigner finds a trusted Cambodian and through the contract purchases the land for him/her under their name.
As for immovable property tax in Cambodia, TOIP imposes an annual tax rate of 0.1% on immovable properties valued at over $25,000 (KHR 100 million). The property tax formula is as follows:
Property Tax = ((Tax Base)*80%)-$25,000)*0.1%
Capital gains tax applies to individuals who have the intention of selling immovable property. Capital gains tax is a flat rate of 20%. This law has not been enacted yet, but it will be in 2024.
Next, we will take a look at different land ownership eligible in Cambodia. There are four different types of land titles in Cambodia as listed below:
Certificate of Ownership over Immovable Property (Hard title)
This is the strongest form of property ownership in Cambodia. This type of title was issued in 2002 based on sub-decree No. 46 RNK.BK. The title includes a QR code that contains detailed information about the property. Some would call this title ‘Systemic Title’ as the land/property has been registered in the system/cluster with property GPS measurement.
Letter of Transference of Possessory Right over Unregistered Property (Soft title)
Inter-Ministerial Prakas No. 14414 BRK dated 30 December 2016 has authorized the governor of the city or district or Khan to transfer possessory rights over unregistered property such as houses and land. The document issued by those local authorities is called a Soft Title. This is a valid document, but one should register the property and convert it into a hard title to ensure full rights on the property.
Certificate of Economic Land Concession
According to sub-decree RNK.BK dated 29 August 2007, this certificate determines the legitimacy of land possession in the investment form on state land that is issued by the Ministry of Land Management, Urban Planning and Construction. For example, the government granted a 99-year leasing of land in Koh Rong to The Royal Group to develop luxury resorts.
Strata Title (Condo Title)
This title has the same strength and validity as the Certificate of Ownership over Immovable Property (Hard Title), but it’s used only for possession of a private unit of a co-owned building such as a condo. This title was issued based on the Prakas No.262 BRK dated 30 November 2009.
Real Estate Market
Borey
There are plenty of elements to consider when making a purchase of a Borey in Cambodia. First, we’ll have to look at the hard title. There are two classifications of hard titles when dealing with boreys. The first is the hard title for the whole Borey development which is called a master title; it will cover the entire piece of land on which the project sits. The second one should be hard titles that are subdivided for each residential unit included in the Borey. These are called individual titles. Next is the development company registration. Development companies will need to register themselves to gain approval from the necessary ministries to proceed with construction. However, construction is not always a sign that they’ve been approved. You can ask to see their company registration just to make sure both the project and the developers can proceed legally. Then we need to look at the Master Plan Approval. The Ministry of Land Management will need to approve the developer’s Master Plan first before the construction begins. A credible developer will be able to provide you with it or at least show you a copy. Another component is the construction license. The construction company then goes through a thorough background check with the Ministry of Land Management. Borey projects must have a single registered construction company building the units and infrastructure to ensure consistency and quality throughout the development. Once this has been cleared, the construction company is then given a license. Lastly, it is borey license. The Ministry of Economics and Finance releases the license for borey once everything is in order. This means that the developer has satisfied the requirements of the Government in terms of quality, design, sales plans, and documentation.
In addition to that, buying borey in Cambodia is a good investment, Knightfrank reported. According to data from Knight Frank, the average launch price of Borey projects in 2018 amounted to USD$ 715 per square meter. This price jumped to USD $940 per square meter in 2019. In 2022, the price is a bit further from the previous price. The high-end Borey developments have seen the biggest jump with 2018 launch prices ranging from USD$ 1,200 to USD$ 1,350 per square meter - this increased to an average of USD$ 1,700 per square meter in 2019. For example, Borey Chip Mong 271 was in the initial phase of development, it was estimated at around 1.5M USD, and currently it resales at 2.2M USD which is roughly a 70% increase of the total house price.
Based on research, primary properties in the real estate market are cheaper in price compared to secondary properties in the real estate market. The reason is that when the primary market first started, the surrounding environment was not developed yet. When the secondary market emerged, the surrounding environment was developing. The price increase is mainly based on the development in the surrounding environment.
● Case Study: This case study mentioned the price of primary and secondary real estate markets based on the surrounding development in Borey Orkide Royal.
Condo
To understand condos in the primary market and the secondary market in Cambodia, we studied 2 condos in Phnom Penh which are Time Square BKK1 and Orkide Condo.
Time Square BKK1 is situated along Street 278 in Phnom Penh. It is one of BKK1’s most active streets surrounded by many bars, restaurants, coffee shops, and amenities. The project developer is from Taiwan, therefore Taiwanese customers bought the majority of the units. The project has maintained a healthy occupancy rate thanks to its location. The project was launched in 2016 with 17 stories and a total of 78 units. Time Square BKK1 has its own agency to help find and sell to various customers.
Orkide Development is located on Street 2004 (MaiDa), Sangkat Ou Baek K'am, Khan Sen Sok, Phnom Penh, Cambodia. The Condominium project was constructed in an oval shape that has a swimming pool in the center. It offers a luxurious and high-class lifestyle. The project consists of 6 condo towers. 5 out of the 6 towers have been sold by Orkide itself. The price range of studio units ranges from 60,000$ to 80.000$. The highest price is around 350K to 500K USD. Orkide condo is a very managed structure and has its own salespersons to support the market sales for both local clients and international clients. Moreover, Orkide does not have an outside agency to cooperate in the selling process. Therefore, Orkide condominium is selling primary markets to respective customers (Time Square Condominium, n.d.). These two condos differ from one another at the starting point in finding their respective clients. Time Square BKK1 hires supporting agencies such as ERA, IPS & CBRE to find customers. It has a few sales agents that work around the office to find customers. Whereas, Orkide has its own sale & marketing department which they have its salesperson to find clients rather than working with a real estate agency. From this perspective, we can clearly see that both condos have different ways of finding customers. The key similarity between this condo at the primary market is that both parties sell condo units to the primary market which means all the condo units are put on sale to the public for the first time and are not pre-owned. In short, Orkide and Time Square BKK are mainly selling on the primary market. Thus, pre-owned units in Time Square BKK and Orkide are put for resale as the secondary market with the help of agencies.
Land
Land can be classified as commercial land, residential land, resorts, factories, and warehouses. Generally, landowners are likely to hire and cooperate with real estate agents to list their properties. Real estate agents are convenient and affordable. In some cases, real estate agents serve as freelancers, which means they earn from the sale commissions. All we need to do is to provide some basic key information to real estate agents and they will do the job for you either buying, selling, or leasing land. However, real estate agents charge a 3% fee of the total property price in order to process the workflows. This is the case with a lot of Cambodian land ownership. Firstly, they seek a real estate agent to list their land property. Secondly, real estate agencies will do a public listing of the property on their site. For instance, we have C21 Zillion Holding which focuses solely on selling, buying, and leasing land. There are several other agencies that offer the same service such as Knight Frank, IPS Cambodia, CBRE, etc. The market for land has fluctuated as key real estate research found that as of end-2020, land prices in Sihanoukville and Siem Reap averaged $1,240 and $1,520 per square meter, down by 10.1 and 5.0 percent from $1,380 and $1,600 at end-2019. However, we are expecting to see potential growth in the real estate demand because according to (Asian Development Bank, 2022), Cambodia’s economic GDP forecast is at 5.3% in 2022, and will rise to 6.2% in 2023.
Location
An important factor to consider when investing in real estate is the location. Location in Phnom Penh is divided into two categories which are commercial areas and residential areas.
Commercial:
❖ Daun Penh,
❖ Beoung Keng Kang
❖ Toul Kork
❖ Chamkarmon
❖ 7 Makara.
❖ Sen Sok
Being on the ground in the capital city, one can easily see that these districts are much more developed in terms of concrete roads, sidewalks (some areas), and towering buildings where big multinational corporations, financial institutions, banks, law firms, and government offices are located.
These districts also host a high concentration of commercial and other leisure establishments such as shopping centers, high-end bars, restaurants, and shops that offer branded goods and services. Sufficed to say, Phnom Penh’s CBDs are where modern city staples are found.
Residential:
❖ Chroy Changvar
❖ Russey Keo
❖ Por Sen Chey
❖ Kamboul
❖ Meanchey
❖ Chhbar Ampov
❖ Dangkao
❖ Prek Pnov
The rise of Phnom Penh’s suburbs has been a gradual and consistent endeavor from the city’s urban planners and private developers. Phnom Penh’s suburbs now offer a significantly better quality of living given that infrastructure for basic necessities such as electricity, water, and internet connection is now available in more of these areas with further improvements on these utilities being realized on an annual basis. Commercial developers are also looking outside of Phnom Penh for business expansions. Big developers such as local conglomerate Chip Mong and Japanese-owned AEON have broken ground on several projects outside of the city center to capture the growing market of suburban residents.
Borey Project in Details
Borey Peng Huoth
Borey Peng Huoth is currently the largest and leading Borey development in Phnom Penh with over 30 projects targeting middle-income and wealthy families. The main target market has been Cambodia’s middle-income bracket for owner occupation. There are also a number of villas selling for prices in excess of $2 million that have been purchased by wealthy Cambodians. The development is also popular with expatriates in the rental market. The master plan consists of approximately 300 hectares of land covered with amenities such as gardens, playgrounds, swimming pools, a shopping mall, a running track, gyms, clubhouses, etc. Peng Huoth’s biggest project is located along National road 1, 2.5 kilometers far from Preah Monivong Bridge and it is owned by Oknha Thay Cheahuoth. This main project is called Grand Star Platinum which consists of smaller projects within the area such as The Star Platinum Polaris, The Star Platinum Eco Romance, The Star Platinum Paradigm, and many others. Besides the projects in The Grand Star Platinum, Peng Huoth Group also has The Star Eternal located in the Chamkar Doung district, The Star Natural located in Chak Angre Ler, and The Star Premier located in Chea Sophara road respectively. Its most current project is The Star Eco-Romance which is located inside the Grand Star Platinum. With a prestigious and modern style based on the esthetic values of symmetry and the European classical style, perfectly in tune with the Cambodia culture, Borey Peng Huoth is designed to be suitable for the new generation or for people who looking for an eco-friendly additional restful break from traditional norms, new concept design of the richness with modern age thinking, without lacking practicality and luxury. A relaxed feeling to interiors with minimal lines and less “stuff” and materials of the exterior that blend harmoniously with nature around your home in contemporary styles. The price range for the current project (The Star Eco-Romance) is as follows:
❖ Linkhouse LA (5m x 12m) = $170k
❖ Linkhouse LV (4.2m x 10m) = $110k
❖ Twin Villa A (6m x12m) = $310k
❖ Twin Villa B (6m x 15m) = $330k
❖ Villa Prince (14m x 13.2m) = $980k
❖ Villa Prince B (7.6m x 12m) = $850k
❖ Villa Queen (14m x 14.2m) = $1M up
❖ Villa King Majestic (21m x 17.5m)= $4M up
Due to lack of resources to access confidential data on capital investment, we take into account of the factors that contribute to the construction of a project. We will focus on one project which is The Star Platinum Eco Romance's last phase. With insufficient information, we estimate the total capital investment using some indicators such as human resources (employees and agents), construction cost and materials, land, operation cost, advertisement cost, and cost for sale gallery, etc.
If we were to give an estimation of the project in number, it would be no less than $20M spent in the development of the last phase of the project. Within the new launch of The Star Platinum Eco Romance, Linkhouse and Twin house sold out the most. Because of its lower than market price since they are still under construction and it is within the Grand Platinum, and access to all the facilities with other projects as well.
Peng Huoth Group has a huge vision for The Grand Platinum project that has launched many phases over the years. It wants to be the model of sustainable corporate delivering values to enrich lives. With a land area spanning approximately 200 hectares, Borey Peng Huoth The Star Platinum is currently Cambodia’s largest landed housing project. It is located in the southeast district of Chhbar Ampov, which is dissected by National Road 1 connecting Phnom Penh with Vietnam. National Road 1 is one of Cambodia's National Highways and has recently undergone widening and improvement works. New developments within the area keep on launching with value-added facilities and buildings such as a wedding hall, clubhouses, eco mall, running track, etc. Their development includes houses, villas, and shophouses as residences. But they also place importance on building a community within the residences by providing a
one-stop place for whatever residents need, it is available within the Borey. They bring up the price of the house by building malls, restaurants, schools, gyms, etc. During the initial development phase, the price is lower compared to the second and later phases of the construction. In terms of finances, Borey Peng Huoth offers several options to customers. You can either get a mortgage with the borey for up to 25 years with a 12% interest rate or take a loan with their partnered banks. The interest rate with borey is pretty high compared to getting a loan with banks, however, the process to get this mortgage is much easier than securing a loan with any bank. Peng Huoth only requires your national ID. However, it is also pretty risky because if you are not able to pay the installment for 3 months, they can take the house back. Peng Huoth Group understands that their current financing option is pretty much similar to that of others. However, what they did a bit differently is that they require the customer to pay a 30% deposit before the installment payment which can be broken into 6 payments for six months, therefore it is paying 5% each month without interest. I would like to mention a little bit about getting a loan from a bank. Most banks partnered with Peng Huoth offers a 4%-5% interest in the first year, then 6%-8% in the upcoming years. However, the process of securing the loan is much more complicated than with the borey. They will need to do a thorough background check in order to give you the loan.
The primary market for The Star Platinum Eco Romance divides into 4 phases. The first phase and second phases are 80% sold out. The third phase is already partially sold out as well. In the last phase, all of the Link and Twin houses have been sold. The remaining are mostly villas although there aren’t many villas left for this particular project.
As for the secondary market, homeowners can either request Borey to sell it or outside agents. However, if the payment mortgage is with Borey, the house owners must contact Borey for the sale agreement. However, if the house is fully owned, most of the house owners prefer to ask real estate companies such as Century 21, or CBRE to sell the house for them.
In terms of their ads and marketing strategy, they use informative advertising or content advertising that focuses on showing the brand and the value it can bring to potential customers by showcasing the lifestyle and amenities offered in the borey. They also use pull advertising which aims to keep the brand in the consumer's mind and propel people to go towards it. It focuses on identification with the brand and long-term loyalty. Their loyalty programs offer discounts from some restaurants and home decor centers that are Peng Huoth’s partners to the members. They also occasionally host contests and sweepstakes on their social media platforms such as answering questions or joining a telegram group to win PH’s merchandise. Their latest promotion for the borey is the Hot Sale Promotion which offers 5 houses fully equipped with TV, washing machine, microwave, and a special discount for the Eco-Romance project. And prior to this promotion in Pchum Ben, they also had another promotion which was offering a 9% discount on the price of the borey and free decor for the master bedroom. Peng Huoth Group also uses a lot of marketing tools to support its position on online presence as the leading real estate developer in Cambodia. Their social media platforms such as Facebook have over 772k followers, Youtube has 6k subscribers, and LinkedIn has 7.2k followers. Besides using the social platform, they also have their own Borey Peng Huoth website where you can see the current and existing projects. While using SEO for their website, they also use CRM to generate leads and online ads on other websites as well. Besides these online tools, they also host conferences or event marketing to attach with their customers as well. Not to mention, they also have their own application and telegram channel to keep the customers updated on the latest promotions.
Lastly, we will take a look at the core strengths that put Borey Peng Huoth as the top developer in Cambodia and some scopes that they can improve on. For The Star Platinum Eco-Romance, it takes around 20 to 22 months to move into the houses in The Star Platinum Eco Romance project. And the area is surrounded by great amenities and facilities, one facility that really attracts people is the EuroVille and convention hall. People who were not living in borey Peng Huoth also come in to visit these areas. Living in the borey offers a sense of security because they have cameras everywhere, and they are going to have an identification card when going in and out of the resident gates. Moreover, the construction and designs of the boreys are of great quality. There are many residents living in the Borey which drives businesses to do well. This means that on top of the comfort and living experience that the borey offer; the area is also a good investment for businesses. In fact, because of the huge number of residents in the borey, it drives many brand-name businesses to open around the area which brings added value to the residences as well. In terms of construction or amenities and infrastructure within the borey, Peng Huoth is generally a great place to live, however, the location of the borey is located in one of the jam-packed areas in Phnom Penh; therefore people living in the borey would feel stressed when having to go to work or school. Borey Peng Huoth is still limited when it comes to internet choices, they only have Ezecom available within the borey. The mobile service is also weak which makes communication a bit difficult as well.
In conclusion, Borey Peng Huoth indeed has proven itself to be the top real estate developer utilizing its enormous land into developing a top-valued community with infrastructure and amenities that are of high quality and offer standard living for middle-income and wealthy homeowners. Peng Huoth has also received many awards and recognition for being the top developer, hence the group has strong positioning in customers’ minds when it comes to looking for borey. Because of its facilities, it is also popular among expatriates for rental which is also one of the reasons making Borey Peng Huoth a good investment choice for investors on top of the fact that borey Peng Huoth is always sold out on the primary market as well.
Chip Mong 271
Borey Chip Mong consists of 4 main types of properties that serve the Cambodian market. The first type is Chip Mong Grand which is the sole and unique type that aims to serve luxurious-class families. The second type is Chip Mong Landmark which contains 2 existing projects; they are Chip Mong Landmark 271 and Chip Mong Landmark 60M. Both projects are categorized as first-class or business class. As for the third type, we have Chip Mong Parkland which is the middle class serving mostly middle-income Cambodians and other foreigners. Lastly, Chip Mong Land Riche is for the lower-income class. We can see that Chipmong projects range from the high-end to the low-end class. The owner of Chip Mong Land is Ouknha Heak Pheap, the founder of Chip Mong Group. However, in this research, we mainly focus on the first class tier which is Chip Mong Landmark 271. Chip Mong Landmark 271 is Located on Street 371, Sangkat Boeung Tumpun, Khan Meanchey. The project is connected to the busy roads Streets 271 and Street 371.
There are 4 types of houses in Chip Mong 271:
❖ Shop house: 600K - 700K (144 units)
❖ Queen Villa: 1.8M - to 2.2M (34 units)
❖ Queen Villa A: 1.6M - 1.8M (37 units)
❖ Twin Villa which: 380K - 700K (44 units)
Chip Mong 271 project has over 140 shophouse units. There are several reasons behind the numerous shophouse units that had been built in Chip Mong 271. Firstly, it has to do with the land plot itself. The front of the land plot is an advantage for commercial and residential construction since it is in an open space. People who are traveling are able to see it at first glance. Secondly, the area of the shophouse is relatively small if we compare it with the other 3 types of villas. The standard land dimension of the queen villa is 25 m x 24 m. In this case, 25 meters can be built for 4.5 units of a shop house. Thirdly, the price of a shophouse unit has another advantage over the Queen villa. Developers can earn more revenue by selling shophouses over other villas.
Interior and exterior designs are designed and studied by international design standards. The houses are absolutely modern that match the current real estate market trend and timeless design. It provides a large space for future modification and upgrades in the future. Construction materials are also supplied by Chip Mong Industries and built by Chip Mong Developers.
Chip Mong Landmark offers a high standard of living such as comfort, material goods, and necessities available to a certain socioeconomic class or a certain geographic area. Inside the compound, all the villa units provide high security with surveillance cameras that operate every day to ensure safety and high-security standards. The security covers social protection for homeowners without any social concerns such as crimes, robbery, or burglars. In the shophouse area, they provide security in the front and rear entrances and monitor all the traffic inbound and outbound.
The master plan of the project is 45 hectares in total which is considerably large in comparison to other projects within the area. About 30% of the plot size is left empty and planned to construct a condo or hotel in the future. However, the decision remains unclear. The developers are required to conduct a research study on whether they should build a condo or hotel, depending on their research. Inside Chip Mong 271 Landmark, It has several developing areas such as Villas, Home offices, condo, hotel, Chip Mong Mega Mall 271, retails, clubhouses, gardens, and a swimming pool. The project is aimed to make huge sales to first-class families. However, anyone can purchase it as long as they can afford the house (Borey Profile: Chip Mong Landmark 271, n.d.).
In Chip Mong Land 271, there are 4 types of houses - Queen Villa, Queen Villa A, Twin Villa, and Home office. According to Knight Frank, there are 270 house units in the total project. The home office has the highest number which is 155 units - with an estimated price of 700,000 USD. The price is expected to increase over time. Queen Villa and Queen Villa A, possess a total of 71 units (34 units and 37 units respectively). The median price of Queen Villa and Queen Villa A is approximately 350,000 USD. Lastly, Twin Villa is known as the most affordable home villa for medium and high-income families. There are 44 villa units in Chip Mong Land 271. The combination of total value of these properties sits around 150 Million Dollars to 180 Million Dollars. Plus, capital investment, there are large numbers of employees that work around the clock to make this project happen and a large pile of resources to undertake this project from start to finish. With these included, the estimation of Chip Mong Landmark 271 project is likely to be more than 200 Million Dollars. However, we do not have statistical data to prove our assumption. We made this assumption possible by compiling all the house prices and resource prices in order to come up with the estimated capital investment. Chip Mong Land 271 was launched in late 2017. The villas have been booked in the pre-sale period and after their construction. Currently, the villa project in Chip Mong Land 271 has been sold completely since it had fewer units built compared to shophouses. Most of the owners are Cambodian middle-class and high-class households with very few percent owned by Chinese. Home Office or sometimes also known as Shophouse has not been entirely sold yet. In September 2022, there are 2 remaining units left with an estimated price of 700K. The price of the house is expected to increase due to the high demand of customers (Chip Mong 271: Borey Project, personal communication, Sep, 20).
As for marketing strategies, we observe two factors which are strategic planning and strategic selling points of Borey Chip Mong Landmark 271.
Chip Mong Land mainly focuses on its development projects ensuring that their projects are built in areas that have the potential to grow, with the quickest and most convenient access to shopping malls, local and international schools, banks, and hospitals. Their vision is to provide everyone’s dream home. All the houses are built using the highest quality construction materials that have gained internationally-recognized ISO accreditation, such as Chip Mong concrete, V-Steel, Chip Mong Roof Tiles, and Chip Mong Pipes. The interior and exterior designs are timeless and reflect a trend-setting lifestyle. Homes are surrounded by the most modern and convenient facilities such as clubhouses, parks, playgrounds, and community malls to ensure our customers’ “Trust in Living”. Home projects are built on time with high quality. Chipmong Land project currently employs 4,000 national and international professionals, all of whom are committed to quality construction and high productivity that matches high standards of living and global. Chip Mong is committed to enriching the lives of Cambodians through our class leisure facilities and services. On the other hand, we also studied the strategic selling point of Chip Mong 271. At the launching ceremony phase, the developer was offering a discount up to 8% and a payment option of 100% loan with no deposit required, which resulted in a healthy sales rate. In September 2022, they have various offers which are slightly different. If customers purchase 100% payment without loan interest, customers need to do an initial deposit of $1000. Then, the first and the second week will be paid 30% and 70% of the house price, respectively. In this case, 7% is offered as a discount which saves some money for house upgrades. For installments, customers can choose loans from Chip Mong or partner banks. Both Chip Mong and Partner banks provide different interest rates because of the nature of the institutions. Chip Mong allows customers to get a 12% interest loan whereas partner banks offer only 9% of interest rates. However, taking a loan from the bank is a complex process and time-consuming. Bank loan officers would have to study your income sources and your background in order to lend you the money. For Chip Mong, only a national ID card and other documents are required to fill out the loan form. Moreover, if you are incapable of paying the installment loans, the developers will confiscate the house and therefore you are not authorized to settle in anymore (Chip Mong 271: Borey Project, personal communication, Sep, 20). .
Chip Mong adopted several marketing tools such as CRM to generate leads, retain customers, and speed up the process to close deals. In addition to that Chipmong has a relatively strong online presence compares to other top real estate developers. Their online platforms such as Facebook, Youtube, and LinkedIn have 900k followers, 2.91k subscribers, and 9.1k followers respectively. Utilizing its well-known presence, they target its customers through online ads and a mobile app which is available for both iOS and Android. As for their content, they use posters and videos to promote the borey and the lifestyle concept. They also frequently have event marketing as a method to connect with potential buyers. These are all the tools that Chipmong Group used in order to advertise their properties.
For advertising strategies, ChipMong's Marketing departments adopted effective and efficient methods to promote their social media. They used promotional videos in order to increase public awareness of upcoming projects. For instance, the branding video on the opening project at Chip Mong Pochentong. Their targeted location is set in areas that mostly contain high-income and mid-income families. They also market the pre-sale purchase with an 8% discount on the total house price. Not only using these techniques, but hopping on the influencer marketing trend, Chipmong also chose singer-celebrity Aok Sokunkanha to be the brand ambassador to advertise Chip Mong's marketing brands.
Chipmong is among the top real estate developer in Cambodia for several reasons. For instance, within the compound, there are plenty of trees that provide a healthy environment for homeowners. Those trees are great for consuming toxic gas and producing oxygen. Moreover, there is little noise pollution and air pollution inside the villa zone because there is not much traffic and cars operating inside the area which results in a better living atmosphere. As for the building structures, materials were produced domestically with international standards. These materials are stiff and tough which provides great quality for the construction. Lastly, Chip Mong 271 offers a variety of entertainment to its respective customers. Chip Mong 271 Mega Mall, clubhouse, swimming pool, etc were built to bring added value to the residents in Chipmong Landmark. However, there are also a few considerations that Chip Mong 271 lacks. For example, customer service could be improved. Their sales agents did not offer any detailed information to the customers and were not attentive enough. Moreover, their app feature is still not fully functional which could be inconvenient for users. For instance, there was no follow-up action after inquiries/ booking on the app which can cause confusion for users. And although the 12% interest rate is quite common among all borey developers, it is still a high rate compared to taking loans with banks. And because the interest rate is the same as others, Chipmong could also use lower interest rates as a strategy to attract more middle-income customers.
In conclusion, Chip Mong landmark 271 is valued as a great opportunity for investment in terms of real estate among other exciting properties in Cambodia. Because Chipmong’s main target customers are upper-middle-income and high-income families, the lifestyle that is offered at the borey is comfortable and elegant. With recent and upcoming development around the surrounding areas, the value of Chipmong Landmark 271 will increase exponentially. It is located approximately 10 minutes from the new Phnom Penh International airport. In terms of construction, Chipmong also is a leader in development among other top real estate groups.
Orkide Development
Borey Orkide was first established in 2008 with Hun Mana as its founder. It started with Orkide The Grand as its first project. Now, they've expanded to five main projects including both boreys and condos. Orkide has six main projects which are Borey Orkide the Grand, Borey Orkide the Royal, Orkide the Royal Condominium, Borey Orkide Pochengton, and Borey Orkide the Botanic City.
Orkide the Royal has been successful for Orkide Development and unlike other projects under Orkide Development, Orkide the Royal master plan includes both the borey, shophouses, and condos. The project is located on street 2004 (MaiDa), Sangkat Ou Baek K'am, Khan Sen Sok, Phnom Penh, Cambodia. For Orkide the Royal, there are 6 different types of houses which are:
❖ King Orchid: $1M - $2M
❖ Queen Orchid: $900k - $1M
❖ Orchid Twin A: $500k - $700k
❖ Orchid Twin B: $400k - $600k
❖ Orchid Link: $300K - $450k
❖ ShopHouse: $400k - $700k
For Orkide Royal Condominium, there are 5 unit types
❖ Studio Units: $70k - $100k
❖ One Bedroom: $130k - $160k
❖ Two Bedrooms: $220k - $300k
❖ Three Bedrooms: $300k - $500k
❖ Penthouse: $400k - $600k
The style of the project consists of 3 different types such as villa resident, condominium, and shop house. Each style serves a different purpose in the master plan. The master plan is divided into three main sectors. The first sector of the project is located at the front which consists of shop houses for commercial and business purposes. The second sector is a condo with 6 buildings and a shopping mall on the ground and second floor. The second sector is for residential, commercial, and entertainment purposes. The third sector mainly consists of different types of villas for residence purposes. The project's target customers in the Cambodian markets are mainly middle-income families and high-income families. Borey Orkide the Royal was launched in the year 2014 and was handed over in the year 2018. When the project was first announced and launched before construction, there were already houses sold. As the construction began, houses were still continuously being sold. However, the most sold house types are the orchid link and the orchid twin. For the condominium, there are six condo buildings. Five out of six building units have already been sold. The most sold unit type is the studio unit.
As for their strategic planning, Orkide was one of the fastest-growing developers in Cambodia. It's inspired by the vision of creating a better living experience for Cambodian people. Many resources and effort are put into each project in order to "create unique stunning amenities, infrastructure, property management, and long-lasting customer relationship services." Their vision is to offer people a home rather than just a house. The project Orkide the Royal and The Royal Condominium are part of the master plan of providing convenience, residence, green environment, entertainment, luxury, and commercial. It contains a villa residence and a condo for residence purposes. For luxury, they contain a clubhouse and shopping center that will fulfill all the taste of a high-class lifestyle. For a green environment, there is the Royal Garden located at the condominium which is a 3.2-hectare garden with over 100 facilities such as a swimming pool, luxury gym, steam, sauna, walking track, eye-long track, and more. It is split into 12 different zones with a rooftop garden at each tower. For commercial purposes, there are shophouses at the front of the project and a shopping mall that was mentioned earlier. The key to convenience is allowing people to live in an environment with a residential area to stay in, a school, a shopping mall, and shop houses nearby.
In addition, their selling point on financing to buy a house in a condo has two options with several steps required. The two options of payment are either pay all in advance, or 50% through their 21 monthly payment, and 50% with either pay in advance or through loans with banks. For further detail regarding the second option, first, you'll need to make a deposit of 10% before the installment payment. For example, a studio's original price is $78, 810 but after a discount, it's left with $66,989 only. There is a booking fee required that costs $1000. You'll have to deposit 10% for 1st installment and a contract of SPA. Afterward, for 50% of the total price to be paid within 21 months, each month is required to pay 2% which is $1, 399. At the end of 21 months, you have finished paying 50% of the total price. By then, you can continue to pay the remaining 50% left. For the 50% remaining that's mentioned previously, there are 2 options. One option is to pay off the remaining amount without loaning. The other option of payment is through loans with 2 banks provided: J Trust and FTB. For loans with FTB, there are options of loan 1 year, 5 years, 10 years, 15 years, and 20 years as well.
Loan 1 year $2, 935/ monthly
Loan 5 years $701/ monthly
Loan 10 years $431/ monthly
Loan 15 years $347/ monthly
Loan 20 years $309/ monthly
Orkide Development uses several marketing tools to attract buyers throughout the years. Their uniqueness from other real estate development companies, Orkide contains the technology of using VR to view houses digitally. Not only that, they have made themselves well known on social media, achieving over 300k likes on their Facebook page, 7k followers on Instagram, 11k on Linkedin, over 400 subscribers on their youtube channel, and 3k followers on TikTok. They create video content on social media and have also been seen on different news companies such as construction property, Phnom Penh Posts, KhmerTimes, etc. There are also posters and flyers being shared on the streets and inside their own previous projects. While mentioning technologies they've used, they also have their own app which shows their promotions, project details, location of the sale gallery, and VR technology to view the houses. They also host events and send invitations to all Orkide owners/investors to inform them about their new upcoming projects. To catch people's attention, they offer Orkide buyers more discounts given on special requests. There will also be a discount for the pre-sale time period. Certain furniture is also equipped when the house is purchased. Interestingly, they offer buyers a chance to move in while only 10% of payment is needed. There are certain free services for purchasing the house like a car park, garbage collector, etc.
Regarding the strengths and weaknesses of the projects, a few surveys have been done on the families that live in the projects themselves. For villa residences, top security with CTV is located everywhere including the corner of the streets, and security guards are on standby 24/7. Required cards to scan in order to enter and registration is required for every guest that enters. Package checking is required for food delivery drivers and construction workers including company workers themselves. There are schools, restaurants, malls, and marts located nearby the area which makes it convenient. During the rainy season, there is no concern about flooding on the streets of the borey because of the good underground water system installed there. There are playgrounds, parks, and clubhouses for entertainment. It's cooler inside the borey due to lots of trees and plants which provide a green environment. They provide high-quality customer service, including the staff members, security guards, and their sales gallery agent. However, the soundproof quality in the link and twin houses and shophouse is of low quality. Sounds from flushing the toilet can be heard by the house nearby. While previously mentioned that they have a good underground system for the streets, the underground water network inside the house is of bad quality. When it comes to big and heavy rain, the house is flooded on the inside with water coming back out of the toilets. They also contain weak water systems. The water system is not strong enough to pump up water to higher floors like the 3rd and 4th floors. Normally, owners have to spend more on buying a water pumping machine. The service there is quite weak. You won't have enough service to make a phone call inside the house. The wifi company options are restricted. Therefore the wifi company options are limited such as Ezecom wifi company. The street cleaning services are bad quality. There are many trees and there will be leaves everywhere on the streets and it takes a few days up to a week before it's cleanout.
As previously mentioned, Orkide the Royal has been a successful project. We've collected some data about the project in both the primary and secondary market. Referring to the primary market for the current project The Royal, which is mainly focused on the shop house and villa residence, is fully sold out. Therefore, there is 0% left of the primary market in the project. However, for the project Royal Condominium, five out of the six buildings are already sold out. This indicates that 83% of the condominium primary market is gone. That left us with an estimate of 17% of the primary market being left in the Royal Condominium. As for the secondary market, as previously mentioned in the primary market sector for both the Royal and the Royal Condominium, the project the Royal is now 100% secondary market and the Condominium has an estimate of 83% in the secondary market. Similar to other boreys as well,
Orkide has a database of customers and their own in-house sales agents including the condominium to sell and contact the customers on the list.
In conclusion, Orkide development has made its project the royal as a one-stop solution where everything necessary is including such as schools, marts, restaurants, residences, entertainment, etc. This attracts both buyers and investors due to the convenience it has provided. This certified that borey projects are more likely to succeed due to the environment and the surrounding environment, as well as the convenience it provides for three main purposes: residence, commercial, and entertainment.
References:
Asian Development Bank. (2022, September 21). Retrieved from ADB Maintains Cambodia’s Growth Forecast in 2022, Revises Down Projection for 2023: https://www.adb.org/news/adb-maintains-cambodia-growth-forecast-2022-revises-down-projection//
Orkide Development. "Orkide The Royal." https://www.orkide.com.kh/our-projects/the-royal. Last accessed November 1, 2002.
Orkide Development. "The Royal Condominium." https://www.orkide.com.kh/our-projects/the-royal-condo. Last accessed November 3, 2022.
Zillionhome. "Orkide The Royal Villa." https://www.zillionhome.com/building/a092800000Wly3mAAB. Last accessed November 3, 2022.