JSM Indochina's Phnom Penh properties have been sold to a regional firm for US$33.7 million, in what industry insiders called the first large post-crisis real estate transaction in the Kingdom.
The deal, which includes the Embassy Centre property near Wat Phnom (the plans there - see picture to the right) never materialized), its two Colonial Mansions and the Ounalom property (also with plans that never bore fruit, see picture further down) near the riverside, is expected to close within six months, according to the buyer.
"We see this as an excellent opportunity for Hongkong Land to enter the Cambodian property market, which we believe offers great growth potential," said Robert Garman, executive director, South Asia, of Hongkong Land Ltd.
"We look forward to developing our business here over the long term."
JSM Indochina hired international property firm CB Richard Ellis to sell its five Cambodia and four Vietnam properties in September, 2010, after an April vote by JSM shareholders to cash in on its portfolio.
In October, JSM said the conditions of Cambodia's real estate market were "challenging", adding the "expected response from potential foreign buyers has been less robust than hoped".
Yesterday, CB Richard Ellis Country Manager Daniel Parkes said the rebounding Cambodian real estate sector made purchases attractive.
"2010 probably saw the bottom of the property market," he said. "On this occasion there was good value on the assets for sale."
The $33.7-million price tag represented the market value of the transaction, he said.
National Valuers' Association of Cambodia President Sung Bonna agreed the sale price for the four JSM properties was reasonable. "So far since the crisis happened, this is the first big investment in property," he said.
He described it as a "good sign" of growth in a sector that has lagged the Cambodian economy in recovering.
Sung Bonna said it would be "a few years" before Cambodia's real estate market fully recovered from the downturn, but that it would most likely not reach levels seen just before the crisis.
Lao Tip Seiha, director of the Construction Department at the Ministry of Land Management, Urban Planning and Construction, said he was not aware of the deal's specifics, but claimed foreign investors were feeling increasingly confident about the sector.
Projects approved for construction lifted by an annualised 53 percent over the first two months of 2011, he said.
JSM said yesterday it was in "advanced discussions" with Hongkong Land regarding a potential sale of its leasehold interest in Siem Reap.
Hongkong Land International Holdings, the buyer's parent, is a member of Jardine Matheson Group. A Jardine's holding firm is 12.25 percent owner of ACLEDA Bank, among other interests in Cambodia.
See also: Phnom Penh's real estate dreams.