Investment must read! Return up to 10% per year , the policy of GRR in Cambodia in 2023

Cambodian real estate market is a recognized value depression. Due to the comprehensive advantages of US dollar assets, hard title, no foreign exchange control, demographic dividends, and high return on investment, it attracts investors from all over the world

In order to attract more buyers, some real estate developers offer Guaranteed Rental Return (GRR), , if you want to invest in Cambodian real estate from the perspective of rental return, you may wish to take a look at this Compass’s investment guide.

1.What does “GRR” mean?

GRR, the abbreviation of Guaranteed Rental Returns, this is a unique buy-to-rent approach where the developer guarantees the buyer rental income from the property for a period of time specified in the contract. 

it means, the owner buys the property from a developer who promises to rent it out on your behalf and then pays you the rental income.

Usually, GRR will have a fixed term (2-10 years) and a fixed percentage rate of return.

2.The benefits of purchasing projects that support GRR?

-Investment is less troublesome and no worry. Usually, the property is properly managed to ensure the maximum occupancy rate for renting out, owners need to spend a lot of energy to find tenants themselves, or entrust an agency, if it is rented out by the developer, the owner does not need to spend so much time and have trouble;

-The investment cash flow is steady. Without a tenant, the owner may loses potential income. But with a guaranteed rental return, the property owner will have a steady cash flow during this period, with the developer covering the bottom line.

3.Is there any risk in purchasing GRR projects?

First of all, we should know that nothing is 100% certain in the investment market, , it is only a matter of probability.

Secondly, investing in real estate is more likely to be resold at a later stage, and earning the difference in house price increases and rental income in the past few years of holding the property. However, the expiration time of the same GRR project is the same. If the owners start to resell at the same time, there will be a large number of similar properties on the market, and the probability of successful resale will be reduced.

4.Which projects in Cambodia support GRR?

▌Yuetai Phnom Penh Harbour

Yuetai Phnom Penh Harbour is located along the Tonle Sap River, it is an urban complex project integrating luxury apartments, five-star hotels, Grade A office buildings, and golden shops.

Type of units: Condos 2S (studio-3Bed), size 50㎡-106㎡

GRR policy:

① Provide 5-year GRR, with a rate of return of 8% per year;

② The total investment return is 40%, and 40% of the income can be deducted from the house payment, which means, you only have to pay 60% for the total house payment;

③ If don’t want to deduct in the house payment , you can negotiate with the developer on the collection time, which can be at 8% per year, or 40% at one time after 5 years.

▌Wealth Mansion

Wealth Mansion is located at the bridgehead of the Cambodia-Japan Friendship Bridge in the Chroy Changvar District, with a total height of 166 meters and 45 floors above ground, Including hotel-style condos and five-star hotel.

Type of units:  Studio-3Bed, size 62㎡-128㎡

GRR policy:

① Provide 3-year GRR, with a rate of return of 7% per year;

② The total investment return is 21%, which will be paid by the developer after 3 years;

③ If you want to cut in advance, the rate of return is only 5% per year, and the total amount is 15%.

▌Diamond Bay Garden

Diamond Bay Garden is located on Diamond Island, enjoying the panoramic views over the three rivers- Mekong, Tonle Sap, and Bassac. The project consists of three high-rise buildings, which are connected by two sky bridges, with 591 residences on the 3rd to 37th floors.

Type of units: 1Bed-3Bed, size 59㎡-169㎡

GRR policy:

① Provide 5-year GRR;

② If the developer pays income annually, the payment rate is 6%, 6.5%, 7%, 7.5%, 8%, and the total income is 35%;

③ If the developer payoff in one time, the total income is only 25%.

▌LIXIN CEO Center

Lixin CEO Center is located close to the office of the council of ministers in 7 makara District, It has 33 floors and a height of 130 meters with A&B twin-building design. It is a commercial and residential complex integrating large flat floors, high-end office building, and five-star hotel apartments.

Type of units: office building size 73㎡-400㎡, Apartment size 46㎡-138㎡( Studio-2Bed);

GRR policy:

① Provide 10-year GRR for Wyndham Hotel Apartments

② The return rate for the first 5 years is fixed at $18.7/㎡, after deducting the cost of the hotel in the next 5 years, the owner gets 70% and the Wyndham Hotel gets 30%;

▌Prince Happiness Plaza

Prince Happiness Plaza is located next to Monivong blvd, the bustling commercial area of Phnom Penh. It consists of a luxury condominium [MERRYLAND] and a business complex [SKYRISE].

Type of units: Studio-2 Bed, size 32㎡-96㎡

GRR policy:

Provide 5-year GRR ,and rate of return is 6% per year

▌Prince Huan Yu Center

Prince Huan Yu Center located on the north side of the Russian embassy,and adjacent to BKK1 area, it consists of A-grade office buildings, apartments, penthouse and commercial area.

Type of units: Studio-3Bed, size 32㎡-105㎡

GRR policy:

① Provide 2-year GRR, with total return rate 16%

②you can decide to include it with the discount in payment term or get it after 2 years

▌Vue Aston

Vue Aston is located on the edge of the Mekong River in Phnom Penh, Facing Diamond Island CBD across the Bassac River. The project is 140 meters high and has 38 floors. It is a modern Phnom Penh landmark building integrating apartments and hotels.

Type of units:  Studio-3 Bed, 31㎡-167㎡

GRR policy:

① provide 5-10 years GRR,

② 5 years term: the developer pays a fixed proportion of income every 3 months, 5% in the first year (1.25% per quarter), 6% in the second year, and 7% from the third to fifth years;

③ 10 years term:  The developer pays a fixed percentage of income every year, 5% in the first year, 6% in the second year, and 7% from the third to tenth years.

▌Le Condé BKK1

Le Condé BKK1 is located in the BKK1 embassy area, the most central part of the of Phnom Penh, with a total height of 143 meters and a total of 43 floors. It is a service apartment.

Type of units: Studio-3Bed, size 37㎡-166㎡

GRR policy:

① Provide 3-year GRR, with a rate of return of 8% per year;

② Provide by phase: developer will pay annually with 6%/year, which the total return rate is 18% for 3 years. 

③ Provide after 3 years: developer will pay the full amount of  24%.

▌Morgan Tower

Morgan Tower is located on Diamond Island, Phnom Penh, it has a total height of 46 floors. The 4-34 floors of the building are super 5A-Grade offices, with a 12-meter high art lobby and 15 high-speed elevators. It is the ultimate business space customized for elites.

Type of units: office space around 53㎡-210㎡

GRR policy:

①Provide 5-year GRR, with a rate of return of 8% per year;

②The developer will pay the GRR at the end of the year annually

▌Kiri Park Residence & Resort 

Kiripark Residence & Resort is located in Sihanoukville, it is the largest vacation villa project between Phnom Penh and Sihanoukville, also a large-scale natural resort integrating service, entertainment and family leisure.

Units for sale: Suite Villa（331㎡）

GRR policy:

① Provide 5-year GRR

② The developer pays a fixed amount every month, $1000 per month for the first and second years; $1200 per month for the third and fourth years; and $1500 per month for the fifth year.

▌STAR BAY

STAR BAY is located in the center of Sihanoukville, next to Soka Hotel, and only 200 meters away from the sea. It is a large-scale complex project integrating shopping malls, five-star hotels, casinos, schools, hospitals, and commercial streets.

Type of units: Studio/1Bed, size 32㎡-65㎡

GRR policy:

① Provide GRR only for 11th floor

② Studio rental at $380 per month, 1Bed  rental at 850$ per month

▌Rose Apple Square

Rose Apple Square is a vibrant community square located in the center of Siem Reap, surrounded by many tourist attractions and close to Pub Street.

Type of units: 1Bed-3Bed, size 32㎡-72㎡

GRR policy:

① Provide 3-year GRR, with a total income of 7%;

② Developer pay the income starts from 39 months after handover the house

③ Apply for one-time payment only

▌The Sky Park

The Sky Park located near the nexus of National Road 6 and the Krous High School Ring Road, Each apartment building has 5 floors with 10 units per floor.

Type of units: 1Bed-3Bed, size 56㎡-120㎡；

GRR policy:

① Provide GRR for one-time payment only

② The total investment income is 6%, and the developer will pay it one time after the construction finishes. 

▌Golf Harmony 

Golf Harmony is nestled secretly within the Kampot valley and surrounded by the forest. It is a vacation villa project and 15 kilometers away from Kampot City.

Type of units: Villa size 19m*16m;

GRR policy:

① Provide 3-year GRR, with a total return rate of 8%;

② Developer will pay the income within 3 years after handover the house.

In conclusion, there are many projects in Cambodia currently support GRR, covering a variety of property types such as apartments, office buildings, and villas, with a wide range of choices. At the same time, the rental return rate of Cambodian real estate is at the leading level in Southeast Asian countries, which has certain investment advantages. In addition, Cambodian real estate is the only US dollar asset in Southeast Asia, and has a high ability to resist risks. For people who want to invest in Cambodia real estate can learn more about it.

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