Investors set their sights on the capital’s newly favoured weekend destination, Sihanoukville
According to industry analysts, Cambodia’s real estate market is expected to see significant growth in 2023, driven by key economic drivers and new opportunities in the sector.
In a recent report by Khmer Times, several economic drivers were identified as key factors for the anticipated growth, including increased government spending on infrastructure, rising tourism, and the expansion of the manufacturing sector. Additionally, the report noted that Cambodia’s GDP is expected to grow by six percent in 2023, further boosting the country’s real estate market.
Potential for investment
As the country’s economy continues to expand, experts predict that Cambodia will attract more foreign investment, particularly in the real estate sector. Sorn Seap, the President of the Cambodian Valuers and Estate Agents Association (CVEA) and the Chairperson of the PropertyGuru Cambodia Property Awards Judging Panel, said that he sees a positive side of investment in the property market compared to last year.
“While it is slow compared to pre-COVID, tourists and investors from China are starting to travel around the region, giving Cambodia some attention. However, international investment remains low due to the current bank crisis and the uncertainty of the war in Ukraine and Russia,” explained Seap.
In the short term, he does not expect a lot of foreign investors, but there is hope for a slightly better year than last year.
Domestic investment is also slow as people prefer to reserve their money instead of investing in property. Some investors are waiting for good property to buy, while others need urgent money for expansion. Despite this, developers are selling their properties at lower than the market prices, which is why some professional agents still manage to close deals, making it a buyer’s market.
Emerging opportunities in the coastal city
One region that is seeing renewed interest from investors is Sihanoukville, a coastal city that has faced challenges in recent years due to overdevelopment and a decline in tourism. However, Khmer Times revealed that Sihanoukville has now unveiled fresh opportunities for the real estate sector, with new projects and infrastructure upgrades in the works.
Despite previous setbacks, experts predict that Sihanoukville is on the cusp of a comeback, suggesting that redemption may be near for the city. Seap believes that Sihanoukville will continue to be an attractive investment area due to its accessibility.
“With 34 renovated roads and a new expressway from Phnom Penh to Sihanoukville that reduces travel time from 5-6 hours to 2 hours, this coastal city can absorb a lot of local tourists. Additionally, the development of this new city within Sihanoukville province, the Bay of Lights, spearheaded by Singaporean-Cambodian developer Canopy Sands Development, with Prince Real Estate Group as its strategic partner for secondary development that spans 934 hectares of the coastal city featuring high-end tourist attractions, financial and business hub, is expected to attract more investors,” he added.
In 2022, Prince Real Estate Group nabbed the highly anticipated Best Developer and Best Mixed Use Developer honours at the 7th PropertyGuru Cambodia Property Awards. As for the capital’s newly favoured weekend destination, more developers have sprouted, giving this city a new lease on life. Among them is the Best Residential Development (Sihanoukville) titleholder, Borey Lorn City Lotussea by 5LH Lorn City Development Co., Ltd.
Since local investors currently have their sights set on this location, Seap believes that foreign investors will start to see the opportunity here in the second half of this year or next year, considering the high local demand.
China to aid in the recovery
With the reopening of China’s borders, the local real estate sector is expected to see a rebound, further reported Khmer Times. As a key market for the industry, the return of Chinese investors will likely boost the demand for property in Cambodia and drive up property prices, providing a much-needed boost to the local economy.
Chinese investors are already heavily invested in Cambodia’s real estate market, with Chinese firms accounting for a significant portion of the country’s new construction projects. With the reopening, it is expected that this trend will continue, further contributing to the growth of Cambodia’s real estate sector. Pre-pandemic, Chinese investment in the country grew by 40 percent, a major contributor compared to other countries.
Overall, the outlook for Cambodia’s real estate market is positive, with several factors contributing to its growth in the coming year. As the country continues to attract investment and expand its economy, the real estate sector is poised for significant development and investment opportunities.
Know of outstanding residential, commercial, or industrial projects in Cambodia? Nominate them for the 8th annual PropertyGuru Cambodia Property Awards on or before 12 May 2023. To know more, visit asiapropertyawards.com/award/cambodia/.
Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].
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