The new municipality that will change Cambodia real estate

Building activity and land prices to rise after two of the kingdom’s touristy islands achieve cityhood, but concerns remain

A new law creating a new municipality out of two islands will spur more building off mainland Cambodia, experts told local property portal Realestate.com.kh.

Effective May, the islands of Koh Rong and Koh Rong Sanloem will be accorded the status of a municipality, a sub-decree ruled in January.

With a new, single administration over the islands, the arrival of government buildings and infrastructure projects will likely benefit the municipality, according to Chheun Chantha, commune chief of Koh Rong Sanloem.

Plots along the beach in Koh Touch, one of two villages in Koh Rong Sanloem, have already been selling for more than USD1,000 per square metre, while those further inland have been fetching prices between USD100 and USD200 per square metre, the commune leader said, adding that land prices will further ascend.

“The area is very attractive for tourism. On average, 2,500 tourists show up every day,” he said, reporting that around 75 percent of visitors stay for at least one night.

Ambiguity around ownership of plots in the island may hound would-be sellers, however. “Most villagers don’t own their land with hard titles,” said Brad King, managing director at Sihanoukville’s Cambodia Real Estate.

Investors are waiting until they can get these before they make significant investments, he added.

Prices for lots without a hard title fetch USD20 to USD50 per square metre, reported Chheun Chantha.

Situated 25 kilometres off the coast of Sihanoukville, the islands are currently administered as communes under Preah Sihanouk province’s Mittapheap district. Two of the biggest tourist destinations in the kingdom, the islands have a permanent population of 4,000.