Real Estate In Cambodia: A Promising Future
The real estate market in Cambodia is on the upswing so far in 2018. The Kingdom has already experienced a great expansion in real estates in the recent years. Several investment opportunities have opened up as the demand and the investment flow have complemented each other in real estates. Experts believe that the current and the coming years are to be benefitting as the demand for reasonably priced properties seem to be exceedingly booming and the supply has been unhindered so far. This growth definitely indicates at this booming sector’s vitality and potentials to be explored.
As far investment opportunities in this year are concerned, several high-rise residential condominiums and retail malls are to be launched for sale, generating hefty opportunities. The demand for medium ranged residential properties like condos and apartments in a moderate price has been steadily rising. Catering to the demands several high-rise condominium and residential complexes have been materialized so far. The coming year expects to see even more investments coming through.
The retail malls too have been proved to be handsomely rewarding. For example, rents are as high as US$65 per square Meter in retail malls in prime locations. The Retail Mall which has a minimum 70 per cent guarantee on rental returns sold off 95 per cent of its available units. Similar trend can be expected for the soon to be launched Peak retail mall which has the Shangri-La Hotel above it.
A number of incidents since last year can be considered of key significance concerning the expansion so far:
- 11 July, 2017: Major shopping zones from Taipei aim to invest and develop shopping zones similar to Taipei and China to attract more tourist footfall.
- 24 October, 2017: IMF declares to expect growth in GDP by 6.7 per cent in 2018.
- 31 October, 2017: Cambodia becomes a part, a significant one, in the One Belt One Road initiative with Chinese investors.
- Soft opening of Naga World 2, a commercial space offering Luxury Hotels, Fine Dines and Gaming spaces intended to attract more and more tourists throughout the year.
- 17 November, 2017: Project announcement for new Light-Rail system planned for Phnom Penh city, to be functional by 2023 when the nation will be hosting the Southeast Asian Games.
- 6 December, 2017: A total investment of US$ 7 billion after multiple infrastructural projects including an express passageway between Phnom Penh and port city of Sihanoukville, a satellite city neighboring Phnom Penh and launching of Tourist centre and a commercial bank.
- 8 December, 2017: New amusement park with US$60 million investment by Peng Houth on the National Road 1 gets sanctioned.
- 15 December, 2017: Marko Cambodia, a cash & carry wholesaler, launches officially.
- 18 December, 2017: Grab, app based cab service, lunches in Cambodia.
- 2 January, 2018: Serviced apartment complex project in Phnom Penh, worth US$ 15 million by Japanese company Leopalace21 Corp is announced.
- 10 January, 2018: More than a dozen Chinese companies sign agreements to buy agricultural products worth US$ 526 million from Cambodia.
- 18 January, 2018: The Cambodian government gives a go-ahead to the construction of World’s 9th largest airport in the world in the south eastern Kandal province.
- 2 February, 2018: Japanese company announces plans to build World Trade Centre in Phnom Penh.
- 20 March, 2018: The Peak retail mall developed by Cambodian company Worldbridge Land and Singapore based organization Oxley, is to be managed by CapitaLand.
GDP Growth: Cambodia has been attaining an average growth of 7.63 per cent so far since 1994. 2005 though saw the highest growth rate ever at a 13.30 per cent. The GDP growth for Cambodia has been on a steady rise.
The experts are forecasting a growth by an average of 7 per cent, not only this year but till 2020. A definite indicator to Cambodian economic expansion, Cambodia got revised in the lower-middle income bracket by The World Bank from the older Lower income bracket. The boom has been contributed by sectors like garments, construction and services.
Tourism Boom: Cambodia witnessed a great increase in the tourist inflow in the country in last 3- 4 years. Cambodia had 5 million tourists, a record number, in 2017 by September. It was almost a 10 per cent raise to 2016’s data. The tourism boom has been fueled in mostly by Asian tourists only.
With affordable lodging facilities and growing attraction tourism in Phnom Penh is increasing rapidly.
Land Price Raise: Prices for lands in Cambodia have been increasing with the expansion of real estate and infrastructure.
The prices have gone up at an average rate of 6.6 per cent year to year. This raise though pushes the property prices high but compared to neighboring countries like Vietnam and Bangkok, prices in Phnom Penh, Cambodia is way more attractive considering investment opportunities.
World’s 9th biggest Airport: Cambodian Government has signaled green for the construction of ninth largest airport in the world. The airport is to be spread over 2600ha land. The prices for the adjacent lands and properties are definitely to go up when the project completes.
Increasing FDI: Cambodia’s FDI have been increasing at a steady pace with several Chinese entities investing more and more in Cambodia. Cambodia is crucial part in One Belt One Road project. It is expected to attract more foreign investments, mostly from China, contributing in to the Cambodian objective of entering in the Middle-Income bracket by 2030.
International Brands flocking in: Many popular brands are aiming to penetrate the Cambodian market based mostly centering Phnom Penh. For example, USA based convenience mart Circle K launched in Cambodia with three centers operating now and 40 more to come up by the end of the year.
Experts are hopeful with Cambodian real estate market. The price rises should not be a restraining factor for the growth. Cambodia offers great opportunities with many beneficial conditions like deferred payment scheme, compared to neighboring Bangkok or Vietnam.
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