Increasing number of small real estate companies cater to growing middle class
Increasing number of small real estate companies cater to growing middle class
A few skilled former real estate agents, who have built up their own networks, are taking advantage of their potential and starting their own business in response to the growing middle-class demographic.
After working in the marketing department in various private companies, and as a teacher as well as a real estate agent, Kompong Speu native Van Chanthorn, CEO of Towncity Real Estate realised the market potential and established his company in 2013.
Since its establishment, Chanthorn has 20 employees who are dedicated to responding to his customers’ real estate queries and needs. Chanthorn said it has been a long journey, starting from 2000 when only a small number of Cambodians knew what real estate was, and the media was not as advanced and ubiquitous as it is today. His involvement in real estate began after looking for rental houses for expats coming to work for NGOs in Cambodia.
“In 2011 or 2012, I began working at Phnom Penh Real Estate which provided real estate renting, selling and buying services to local and international customers,” Chanthorn said.
A few years’ experience of working in property opened his eyes to the market potential, leading him to establish his own real estate company in line with the growing middle-class demographic.
“When I first created Towncity, I did not have much capital, and relied mostly on experience and patience because I was born to a farmer’s family in the countryside,” he explained.
“What made me take a step forward was the customers’ demands because they kept moving houses. There were also some small sales, and from there I learned how to create and keep my own database of regular projects and customers.”
Chanthorn explained some of the problems he had with establishing a reputable name.
“Back then, some local customers didn’t give us a chance. After we got them to meet the real estate’s landlord or owner, they went behind our back and negotiated the price. We didn’t get any profits from it, while also wasting time and money. But now, I can see that most locals have abandoned that practice, and rely on real estate companies to rent, make a purchase or evaluate property.”
“Right now, real estate owners and customers, as well as developers, are relying on real estate agents because they can see that we are independent experts who are able to be the middleperson,” he said, adding that it takes a fine balance to negotiate property owners’ demand for higher prices, and customers who naturally want a bargain.
“As experienced agents, we explain to them why a certain price in the market is reasonable and that is how we can get them to choose our expert service,” he added.
Chanthorn explained that now that the construction sector is growing, an increasing number of the middle-class business people want to gain profits of their own. Another industry that he says has the potential to cash in on, is property valuation, especially when owners want to understand how much their property is worth and how much can be used as collateral to recieve loans and financing.
“As a real estate expert, our role in educating them on suitable market prices is further emphasised,” he said.
Besides in the local market, Towncity also provides real estate evaluation services in Laos as well as evaluation services for agricultural machinery.
Similarly, Teng Rithy of R’ Property Investment Group founded his own business in 2014 in Toul Kork.
“We began our investment with a capital of $450,000 to buy land plots in Chamkarmon and Preak Phnov. Right now, we are beginning a project in constructing 10 two-and-a-half-storey high hybrid villas measuring 8 by 8.5 metres each,” he said.
He continued that this inaugural project is located about one kilometer to the south of Chamkarmon Market, and that they have secured a 50 per cent deposit for the project, while waiting to begin construction on another project next month.
The price for one house in the first project is $87,000, built on an 8 by 14 metre plot of land and has access to a big communal garden. As for payment options, Rithy’s company offers three choices; customers can put a 90 per cent down payment and get a special discount, pay a mortgage for 15 months during the construction, or pay a mortgage for 10 years through CIMB and Maybank.
“Our housing projects are different from other real estate companies’ projects because after our architecture team designs the villas, we show the designs to interested customers and we are open to ideas and interior changes according to their needs. We can manage that,” he added.
“This keeps our customers happy because they are able to be a part of the designing process from the start,” Rithy said, emphasising on the importance of accommodating to customers who have a clear idea of what they want.
