New Growth Opportunities in Tourism Properties for Chinese Buyers

• 9 May 2018
• Local News
• 1791 Views

The Blue Bay condominium project in Sihanoukville

For most foreign investors, Cambodia remains appealing due to the relatively low prices of real estate which comes with high rental yields. On the other hand, the purchasing conditions in Cambodia are also less complicated compared to a lot of other countries with reasonably low down payments and transfer fees.

In the past, the majority of condominium buyers have predominantly been from Taiwan and Singapore. Due to the weak domestic demand, developers have been expanding their customer base by holding overseas marketing campaigns. Most developers in Cambodia have implemented long-term overseas marketing campaigns. Lately, there have been a lot of overseas marketing campaigns held in Hong Kong, Taiwan, Singapore and cities in mainland China.

The trend of foreign investors investing in residential units in Sihanoukville has only been occurring since 2016. As a result, we have seen a growing number of Chinese buyers purchasing condominium units in Sihanoukville and hopefully, it will expand to other major tourist destinations in Cambodia.

The Seagate condominium in Sihanoukville

Cambodia is one of the main destinations where Chinese are looking for property investments. It also has better market exposure compared to other investment destinations in Southeast Asia due to its good relationship with China. Of the total Chinese capital invested in Cambodia, a significant sum is invested in real estate purposes. Chinese investors most often buy properties that are priced below USD200, 000 and are primarily located in Phnom Penh. In recent years they have also been purchasing in tourist hubs such as Siem Reap and Sihanoukville.

In Southeast Asia, Bangkok, Kuala Lumpur and Singapore are the three most attractive locations for foreign investors buying residential properties. This is similar to Cambodia, where Phnom Penh and Sihanoukville are favourites with foreign investors. As the capital city of Cambodia, Phnom Penh has similar characteristics, such as extensive infrastructure, which is better than other cities and towns in the nation, and close proximity to facilities and amenities. Likewise, Sihanoukville and Kep are both coastal areas that are becoming popular for holiday homes.

The Cambodian market is still relatively new for Chinese residential real estate investors compared to the Malaysian, Singaporean or Thai real estate markets, which have been popular with the Chinese for around a decade. As a result of today’s growth in popularity of Cambodian seaside cities with Chinese tourists, there is greater potential for either foreign or local developers to expose their developments to overseas buyers.

 

សណ្ឋាគារឯករាជ្យក្នុងខេត្តព្រះសីហនុ

Cambodian foreign ownership regulations allow foreigners to collectively hold freehold ownership of the saleable area in a condominium. This is considered friendlier than neighbouring Southeast Asian countries. Currently, foreign investors account for over 50 percent of condominium owners in Cambodia. This rate is very high compared to approximately 15 to 20 percent in Thailand and 20 percent in Malaysia. With Cambodian laws allowing foreign ownership up to 70 percent of a condominium project, we believe there is still room for growth in both supply and demand.

The upward trend in the Cambodian tourism industry should help bolster foreign property investment. This provides market exposure to tourists who can potentially decide to purchase property once they become familiar with Cambodia. Last year, the market saw Chinese tourists account for the highest arrivals in Cambodia. Combined with the fact that Cambodia is considered as one of the less exposed markets for Chinese property investors, there is a high potential for growth in foreign property investors coming from China.

Sihanoukville port

To further attract foreign investment in the long term, both local and foreign developers must continue to improve construction quality and design to meet international standards, as these Chinese buyers have great choices all over the world. Another important area is in providing excellent customer service and this will help in gaining the trust of international buyers and increasing customer loyalty. Once the customers feel satisfied, they will recommend projects to other buyers.

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