Land prices vs rent prices in Phnom Penh

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Kammekor
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Land prices vs rent prices in Phnom Penh

Post by Kammekor »

From the forum:
basta.binici wrote: Tue Dec 15, 2020 2:18 pm Valuable land in a prime location in BKK1 in Phnom Penh. It is surrounded by high-end commercial units as well as residential spaces. The land has a hard title deed.

Land Dimensions: 16.5m x 28.97m
Land Size: 478 sqm

Price per sqm: $6,800/sqm
Total Price: $3,250,000
and:
basta.binici wrote: Mon Dec 14, 2020 5:21 pm 3-floors COMMERCIAL BUILDING for rent with a spacious terrace close to the Independence Monument in BKK1 in Phnom Penh.

📐 Commercial Space: 640 sqm
💢 Land size: 250 sqm


💲 Rent:
First 3 years $6000 per month ($9.30 per sqm per month)
4-7 years $7200 per month
8-10 years $8640 per month
If you start with 3years three months deposit.
Who is going to buy a plot of land in central Phnom Penh for over 3 million USD, construct a building adding a few 100k USD just to make 6.000-9.000 USD a month? That's assuming you will rent it out all. Of course you could raise the revenue by adding floors, but adding floors means adding construction costs, maintenance costs etc etc.
It just seems to me the return on investment is extremely low with these selling prices and the current (and past) rents.

But... Since loads of land is sold i must be missing something, right? Money laundering? Converting cash into assets because of unreliable financial system? Anyone?
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basta.binici
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Re: Land prices vs rent prices in Phnom Penh

Post by basta.binici »

Kammekor wrote: Tue Dec 15, 2020 5:11 pm From the forum:
basta.binici wrote: Tue Dec 15, 2020 2:18 pm Valuable land in a prime location in BKK1 in Phnom Penh. It is surrounded by high-end commercial units as well as residential spaces. The land has a hard title deed.

Land Dimensions: 16.5m x 28.97m
Land Size: 478 sqm

Price per sqm: $6,800/sqm
Total Price: $3,250,000
and:
basta.binici wrote: Mon Dec 14, 2020 5:21 pm 3-floors COMMERCIAL BUILDING for rent with a spacious terrace close to the Independence Monument in BKK1 in Phnom Penh.

📐 Commercial Space: 640 sqm
💢 Land size: 250 sqm


💲 Rent:
First 3 years $6000 per month ($9.30 per sqm per month)
4-7 years $7200 per month
8-10 years $8640 per month
If you start with 3years three months deposit.
Who is going to buy a plot of land in central Phnom Penh for over 3 million USD, construct a building adding a few 100k USD just to make 6.000-9.000 USD a month? That's assuming you will rent it out all. Of course you could raise the revenue by adding floors, but adding floors means adding construction costs, maintenance costs etc etc.
It just seems to me the return on investment is extremely low with these selling prices and the current (and past) rents.

But... Since loads of land is sold i must be missing something, right? Money laundering? Converting cash into assets because of unreliable financial system? Anyone?
Phnom Penh is developing, these prices are the market prices. Please check Cambodias growth rate of last 10 years. No more 50cent beer chasers heaven, but sure there are cheap lands in Moldurkiri. Please check the latest market prices for that area before sharing a misleading opinion. The lands in this area are prices at this price and are being sold. Indeed significantly higher priced lands sold as well. Money laundry guys would care about 3 Million dollars property, you think? Check data about condo, banks, 7/11 purchases or leases, if you are interested in prime location land. You expect the cost of a 10 floor building to be 100K? The client shall build the maximum floors since it is a prime area. Then please calculate the income of a 10-floor building. Is it also 6000 per month? It can be $30K per month easily as rented as a whole building and may multiply when the units or floors are rented separately.
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Re: Land prices vs rent prices in Phnom Penh

Post by Dunderhead »

After 10 years of rapid growth the probability is NOT that the future will be more rapid growth. The probability is that growth will slow or stall. This is true everywhere not just in PP. No idea about the fair value of this particular land but in general land in Cambodia is a buyers market, prices have not yet adjusted to that reality.
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Re: Land prices vs rent prices in Phnom Penh

Post by Bitte_Kein_Lexus »

I saw that ad and the $6k+/m price is totally inflated for 400sqm. I mean, they'll always ask for crazy prices but if he's motivated he'll likely settle for a more realistic $2500-3000/sqm.
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basta.binici
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Re: Land prices vs rent prices in Phnom Penh

Post by basta.binici »

Bitte_Kein_Lexus wrote: Tue Dec 15, 2020 7:02 pm I saw that ad and the $6k+/m price is totally inflated for 400sqm. I mean, they'll always ask for crazy prices but if he's motivated he'll likely settle for a more realistic $2500-3000/sqm.
Those are 2 different ads. 640 sqm commercial villa rented at $6K.

The other is land for sale. Land price $6800 per sqm. If you find 2500-3000 per sqm in that area, I will sell it on the same day from 4000 and pay you 1000-1500 per sqm difference. You must be kidding. Cambodian land prices aren't gonna change depending on your opinion which you claim to be realistic. Markets have their own dynamics. Check how much is a commercial space or residential space rent per month first, then see how many floors and sqm total usage you can build, then you can calculate how long return on investment and claim that the price is not appropriate. Who are "they" that you generalize, who is selling a land in that area at 2500-3000 so that this landlord will sell it at that price as well?
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newkidontheblock
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Re: Land prices vs rent prices in Phnom Penh

Post by newkidontheblock »

Members of CEO are not the target audience for Basta. Why the all the shock and derision?

He’s provided an honest assessment about land and rent valuations in the eyes of the new masters of the Kingdom of Wonder.

And those masters are not the members of CEO.

Thanks for the insight and keep reporting!
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Spigzy
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Re: Land prices vs rent prices in Phnom Penh

Post by Spigzy »

Empty condos precipitate a market crash. Always. Hold on to your coconuts ...
Meum est propositum in taberna mori,
ut sint Guinness proxima morientis ori.
tunc cantabunt letius angelorum chori:
"Sit Deus propitius huic potatori."
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Re: Land prices vs rent prices in Phnom Penh

Post by truffledog »

newkidontheblock wrote: Wed Dec 16, 2020 12:25 am Members of CEO are not the target audience for Basta.
If members of CEO are NOT the target audience for such type of investment why is he posting all them sales/rent offers? Just to be bashed ? a masochist?

There must be some success quote posting investment offers on CEO otherwise he would just wait his time. I wouldn't exclude that but he is a serious dreamer and as such believing in what he is saying/telling. Some dreams actually do get true..when you do spreadsheets about cost and return the paper takes everything you write down without making a fuss. On paper every investment can be "designed" resulting in a huge profit. Everybody has the right to make assumptions about the future that cannot be proven wrong..even the most crazy ideas will find some followers. People spend billions on lottery where the average chance of hitting the jackpot is one in a hundred million...and still the buy tickets for that.

But sure as hell i would never make business with an "agent" when the pricetag is that high. Its should be fairly easy to find the rightful owner of any property and deal directly with him.
work is for people who cant find truffles
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Bitte_Kein_Lexus
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Re: Land prices vs rent prices in Phnom Penh

Post by Bitte_Kein_Lexus »

basta.binici wrote:
Bitte_Kein_Lexus wrote: Tue Dec 15, 2020 7:02 pm I saw that ad and the $6k+/m price is totally inflated for 400sqm. I mean, they'll always ask for crazy prices but if he's motivated he'll likely settle for a more realistic $2500-3000/sqm.
Those are 2 different ads. 640 sqm commercial villa rented at $6K.

The other is land for sale. Land price $6800 per sqm. If you find 2500-3000 per sqm in that area, I will sell it on the same day from 4000 and pay you 1000-1500 per sqm difference. You must be kidding. Cambodian land prices aren't gonna change depending on your opinion which you claim to be realistic. Markets have their own dynamics. Check how much is a commercial space or residential space rent per month first, then see how many floors and sqm total usage you can build, then you can calculate how long return on investment and claim that the price is not appropriate. Who are "they" that you generalize, who is selling a land in that area at 2500-3000 so that this landlord will sell it at that price as well?
Let us know if you sell it at your asking price within the next twelve months then!
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Re: Land prices vs rent prices in Phnom Penh

Post by ssian »

Lots of vacant units and unrented spaces now...
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