Phnom Penh Properties May Sell Low, JSM Warns Market

Property investor JSM Indochina Ltd has expressed concerns that its properties up for sale in Phnom Penh could be sold at deflated prices due to a sluggish property market and a lack of market data.

In a statement to the London Stock Exchange on Friday, the firm said that “given limited transaction volumes and comparable sales data, the prices at which the assets could be realized may be different to individual or cumulative book values.”

“Accordingly, any realizations in Cambodia are likely to be adversely affected by the weak market,” the statement added.

In September, CB Richard Ellis said it was helping JSM Indochina sell four properties in Phnom Penh, two of which were vacant lots originally proposed as sites for high-end residential buildings, and the third, Colonial Mansion I, an operational apartment building.

JSM also has a fourth location that is now for sale, a riverfront plot at the corner of Sisowath Quay and Sothearos Boulevard.

In its statement, JSM said a limited amount of transparency and comparable transactions in Cambodia’s property market were intrinsic problems to evaluating a fair price for property.

Daniel Parkes, country manager for CB Richard Ellis, said in an e-mail that as only two of JSM’s properties have started marketing, it was still “too early to predict the prices that will be achieved.”

He added, however, that local interest had been “far greater” than that from foreign investors, although “several” foreign investors have already flown in to view JSM’s properties.

“Our view of the market is after two years of consolidation, 2011 will show a resumption of price appreciation linked to better than predicted economic performance,” he wrote.

(Additional reporting by Simon Marks)


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