CORE property management, is a Singaporean firm planning to develop a complex facility targeted towards small and micro enterprises within PPSEZ.
We interviewed the director, Mr. Mogan Lee on the topic of Cambodian real estate and points to note about in this industry. (Interviewed at: August, 2017)
Mogan Lee: Director of CORE Property Management.
We must decide whether the target is going to be local demand or a foreign demand
Could you tell us about your company’s strengths?
First of all, we have experience in Cambodia. Our chairman has been operating in Cambodia for thirty years and he understands the country in and out of the real estate industry. Our strength is building residential buildings and commercial complex buildings in Cambodia. We have had success in building a few commercial, office and factory property too. In Singapore, people know us as a developer dealing with government related projects, and we are also known as an architect group sub-contracting from bigger developers.
Secondly, we are also experienced in property management, we manage the property we construct and have a system in place. another strength is having Singaporean designs, which is focused on creativeness, structure standards, safety and quality. I think Singaporean and Japanese are similar in this sense. However, in Cambodia some people may not appreciate this because it could be more expensive for them.
Your company consists of; Property management, Property development and consulting in Cambodia. What do you pay attention to when doing businesses in Cambodia?
We are an expert in property management, our buildings have our own property managing system in place for an effective management. We pay attention to study the supply and the demand of the market. We look at overall occupancy rates, volume and how the supply situation
is. It is also important to foresee the future. There may be an over-supply in the market now, but will it be the same several years down the road? So, we study the population and job situation in Cambodia. Even if there are many jobs available, we must know how many of them are earning a middle range to high range income comparing with the overall population. Such statistics are very important to fully understand the market, we must get a demographic insight too. When we plan a project, we must decide whether the target is going to be local demand or a foreign demand.
By 2030, we expect that the population of the capital will increase by more than 50%
The land price in PPSEZ area has risen. Could you give us your prospect of the area for the future?
land prices are rising overall because the city area is getting more congested. The population in Phnom Penh is on the increase because of more foreigners moving here and people from the provinces are shifting to the city. These are the reason land prices are on the rise. By 2030, we expect that the population of the capital will increase by more than 50%. This causes the demand in the market and people will start to move away from the central area, causing price rise in the out skirts of the city.
Currently, around the airport I can see more people moving into the area because there are many projects going on. Bodaiju residence and several more will bring in extra foreigners and rich locals to the area. Going towards PPSEZ, there is a lot of demand from the factory workers too. There are about 3000 boreys in construction and it is said that 80% of them are sold. When there is more transaction in certain areas, this will cause the prices to go up.
Could you tell us your business developments in the future?
We are still busy with our past projects and have not decided the next plan. We are still selling of units from the previous project. I am considering real estate technology for buyers. In the future, it will be great if people could buy property online. There is a lot of technology involved shifting to such a market. Such as, virtual reality, augmented reality, block-chain technology, crypto currency and I would like to work towards this. If there are any investors interested, they are welcome to join me.
The most important thing is to know how the local people work and how they think
Do you have a message to our readers?
There are a lot opportunities here, not only in real estate but in many industries. However, I strongly recommend undergoing feasibility studies carefully in the beginning to see if your products are ready for the market. Because not all the products are ready for the market. F&B business is very popular but there are many restaurants that have the wrong location, pricing or target set.
It is important to make sure that the people are ready for what you are trying to sell. Cambodia may have 15 million in population but in Phnom Penh we only have two to three million. And out of that, only 10 % of the population has high spending power, this number is slowly increasing but the population may not be ready for the products. You must find a local partner or a consultant who will give you the actual truth about doing business in Cambodia.
If you come here, you might think it is easy to succeed because the money is routing fast. If you want to be successful, you must be very selective of what you do or sell.
People may say that the real estate market is good and buy property as an investment, but they realize that the property cannot be sold and end up renting it out. It’s not about oversupply in the market, it’s about strategy, people just want to ride the wave. Remember that the market may not be ready for the product, and in general you must be selective over the project you going to invest in and check the developer’s credibility too. and looking at the developer credibility.
You also must decide which market you are going after, the mass market or niche market. If you are after the middle class, it is growing now, so you must make sure the business model will last long term. To understand the culture is also necessary and the most important thing is to know how the local people work and how they think, so you can study on how to train the people for the work.
Besides real estate business, I do a lot of consulting for other developers, there demands can be in strategy building or designs. I have been doing consulting in Singapore for about ten years but here I started a few years ago.
- CORE Property Management
- Description of Business : Real Estate