Int’l Real Estate Consultant Sees Room for Upward Growth

Edward Hopkins fell in love with Southeast Asia while backpacking in the region in the early 1990s. He returned to Britain and earned a degree in Southeast Asian Studies and Languages. Hopkins has re­turned to Phnom Penh to head up the Cambodia office of real estate consulting firm CB Richard Ellis. The Los Angeles-based company, with about 24,000 employees worldwide, is hoping to tap into Cam­­bodia’s booming real estate market by facilitating investments and consulting with developers. He spoke with Stephen Kurczy recently about the potential of Cambodia’s property market.

  1. Plans have been announced for three skyscrapers in Phnom Penh—a 30-story, a 42-story and a 52-story. But there are doubts that they’ll even go up.
  2. There are always doubts. I have my concerns. First of all: Is there a need to build things that high here, especially with the difficulty of construction on this type of land? You can’t go 50 stories up without hitting bedrock…and the construction costs of that will be very, very ex­pensive. My feeling is that you probably don’t need to go any higher than 20 stories here.
  3. So do you wonder if these skyscrapers will ever be built?
  4. I think something will go up. I know the companies you’re talking about—they’re serious people. We’ve done a lot of work with these guys already. They do their homework. They do build things. Some­thing certainly will go up. There’s a desperate need for office [space]…. The other thing is that people like to be in buildings with the companies they do business with. It’s very easy when you’re on the 10th floor to press the elevator button to the eighth floor to go and see your in­surance broker, or go down to the ground floor to see your ban­ker, or see your lawyer, because you end up with lots of different services in the same building. For ex­ample a huge multinational moves in, now I’m not going to quote any names, but let’s say a huge Amer­ican company, an oil company, decides to move in, they’re going to take 2,000 square meters, everybody who is going to provide service to that company will move into the same building…. If I were a de­veloper, I would be looking to get a 20-story office building up within 18 months.
  5. Do you think the property market in Cambodia is inflated?
  6. No, it’s cheap! I think it’s abso­lutely cheap.

…I saw a project going in China [in Beijing] for $80,000 a square me­ter. So when you talk about a piece of prime location in downtown [Phnom Penh] for $4,000 a square meter, it’s cheap.

  1. Why is now the right time for CB Richard Ellis to open a branch in Phnom Penh?
  2. Because our clients want us to. We have been servicing the market already.
  3. Who are some of your clients?
  4. JSM Indochina, The Royal Group, some Korean companies I can’t mention in name at the mo­ment. We’ve been literally servicing the Cambodian market from Ho Chi Minh City, so we’ve had people flying in and out, in and out. It’s gotten to the point where we can’t keep flying people in and out.
  5. I’d think a lot of investor confidence would follow CB Richard Ellis.
  6. We have a good reputation, which we’ll try to keep intact. We do business a certain way: the CB Richard Ellis way. And we’re not going to compromise that.
  7. It seems presumptuous to think you could force the CB Richard Ellis way on Cambodia.
  8. Let’s meet again in a year’s time and see what we’ve done. I wouldn’t be here if I wasn’t confident that we would gain business and a lot of market share.

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