REAL estate business in the Kingdom is booming. Driven by the potential for large

profits, short-term speculators and long-term investors alike are flocking to stake

their claim on some of the cheapest land left in Southeast Asia.

"The price of land is going up everyday, but it is still very reasonable compared

to other countries in the region," says Kim Vuthy, the director of Cambodia

Realty Ltd. - one of a handful of licensed real-estate companies operating countrywide.

According to Kim Vuthy and other realtors, normalization of trade relations with

the US and the peace settlement with a faction of the Khmer Rouge has generated a

gold-rush, with some property doubling its value in just a few months.

"Since President Clinton approved Most Favored Nation status for Cambodia in

September, all property has gone up in value," says Ted Ngoy, chairman of King

Realty Co.

Most realtors concur that real estate values have increased an overall 25 percent

country-wide, with significantly higher increases registered for commercial and industrial

land in and around Phnom Penh.

"The most sought after areas for commercial property in the city are Norodom

Boulevard, Pochentong Road and Monivong Boulevard," says Kim Vuthy. "But

the best properties are already gone."

Prices in industrial zoning areas have soared, particularly along National Route

4 to Kompong Som and on Route 6A to the north.

"Across the Friendship bridge, north along National Rte 6A, the price of land

runs at $15 per square meter - a 100 percent increase compared to the value one year

ago," says Kim Vuthy.

But the phenomenon is not limited to Phnom Penh.

"Siem Reap and Sihanoukville are hot property too," says Ted Ngoy, adding

that Singapeorean, South Korean and Malaysian companies are looking to the provinces

for development projects ranging from agro-industry to industrial parks.

Other realtors cite an increasing number of Taiwanese and Hong Kong Chinese among

their clients.

"Hong Kong people do not trust the Chinese [government], but they do not want

to invest in Thailand and Vietnam," says one real-estate agent who asked for

anonymity, adding that some investors still prefer Cambodia's instability over the

red-tape that investors have to face in neighboring countries.

The sale of residential property is also going strong.

In Kompong Som, seaside properties are being offered for $60,000 to $250,000 for

a mid-size lot. "But those are going fast," says Kim Vuthy.

According to some realtors, property value of prime residential areas in Phnom Penh

has reached - and passed - levels seen during the real-estate boom generated by Untac

in 1992/93.

"When UNTAC came, the value of property rose to the highest level in years,

but not as high as it is now," says Som Sam Oeur, a real estate owner who has

been buying and renting residential and commercial property in Phnom Penh since 1992.

"River front property value has gone up between 30-200 percent in the last five

months alone," he adds.

But while most speculators seem to thrive in a tense political climate - raking in

large profits by buying and re-selling within a few month's time - serious, long-term

investors are still biding time.

"Some people are waiting to see [what happens] after the elections, " says

Ted Ngoy.

But others, especially Asian buyers, are closing new deals everyday. "Asians

like to gamble, but the risk may pay off too," he adds.

There are only a handful of licensed real estate firms in Cambodia, but hundreds

of small-time realtors have sprung up all over the city, almost overnight, attracted

by the growing opportunities for quick cash.

"Unofficially, everybody is doing land and property transactions," says

Ted Ngoy. Most property deals are paid in cash, usually with a 20 percent down payment

and the balance due when the property title is transferred to the new owner.

According to some realtors, these types of transactions combined with Cambodia's

loose banking regulations have created ideal conditions for international crime syndicates

wanting to launder illicit money through largely unscrutinized real-estate deals.

As Ted Ngoy explains, "Prior to April 93, people came to Cambodia to purchase

identity cards for a few hundred dollars and later used them to get Cambodian papers

and passports and to buy land."

According to the current regulations, foreigners cannot own land or property unless

they set up a joint venture with a Cambodian national who must retain the majority

of shares.

However, many home-owners in Phnom Penh have no intention of selling to foreigners,

but are renovating their property and putting it onto the lucrative rental market.

A frenzy of activity has swept the city, with landlords building and renovating;

some even claim they are expecting Untac to come back for the next general elections.

While few agree on the likelihood of a second coming, there seems to be a consensus

that elections will be a turning point for Cambodia.

"A lot depends on the election itself," says Ted Ngoy. "It will be

a key point not only for real estate, but for the future of the country."