Private residential property in Cambodia attracting foreign investors

File photo: A street in front of the Peace Palace in Phnom Penh, Cambodia. (AFP/File - Hoang Dinh Nam)  By May Wong | Posted: 13 February

PHNOM PENH: Private residential property in Cambodia is being seen by some investors as relatively cheap, with potential for attractive returns.

Industry players believe these factors are the main draw for foreign buyers, looking to grow their money in Cambodia.

Over 2,000 new private residential units are going on sale in 2013, and there are plans to launch an additional 1,000 units at the end of the year.

Sung Bonna, chairman of Bonna Group said: "After we ran in the peak during 2007, 2008 and after the global crisis, Cambodia's (prices) dropped almost 40 to 50 per cent in the property market. The price of prime residential units that used to be US$2,000 to US$2,500 per square metre (psm) dropped down to like US$1,500 to US$2,000 psm and now it's increasing again, like the prime residential price has come back to US$2,000 plus.

"And before that, we didn't have many condominiums; only several buildings. But now the condominiums are starting (to increase). Especially after 2009, our government came up with the law to let the foreigners own the condominiums, it made the demand increase. At the moment, the market for condominiums is quite good, in terms of the price, the supply is also quite good."

D I Riviera is one condominium project that will be completed in 2015.

Situated within Diamond Island, a premium and up-and-coming location, it has over 700 units, boasting its own shopping mall.

Keuk Narin, vice president of Asia Real Estate Cambodia said: "If you compare with other countries, like Malaysia, Singapore, Thailand, I think it's very challenging to invest in property.

"If we invest in property, like US$20,000, to buy property in Thailand, it might not be in the city centre but if you invest in Phnom Penh, it will be in the city centre and as for the value, it will be different. The capital growth is still high. And also in the city centre, in Phnom Penh especially, for the properties like condominiums, they are very good for renting. Even those like the investment, in terms of the investment it's still very limited, five to six per cent, but there's still room for growth."

Market watchers say returns on property investment could reach up to 8 per cent this year, up from just 3 per cent five years ago.

The top residential property investors come from China, followed by Koreans and Malaysians.

The number of Singaporean investors are still low but that figure is set to grow steadily.

More than 80 per cent of units in Sen Sock Town, a soon-to-be-completed condominium project, have been sold. Half of the buyers are Singaporean.

Industry players say Singaporean buyers are usually very savvy and would normally go for high-end properties. Also, Singaporean buyers would normally take up to about two years to conduct their research before sealing the deal.

- CNA/xq