After enjoying a 10-year long stint as the dominant real estate investor in the Kingdom, Korean investors are now being edged out of their seat by the Chinese.
Lao Tip Seiha, under-secretary of state of the Ministry of Land Management, Urban Planning, and Construction (MLMUPC,) announced recently that since the year 2000, foreign private investors from 18 countries have completed 287 real estate projects with a total estimated surface area of about 12 million metres squared, resulting in an estimated capital investment of $4.3 billion.
When the figures are broken down, it was revealed that China is responsible for 110 projects out of the total 287 projects, bearing an investment capital of $1.66 billion. South Korea trails closely behind with 46 projects totalling an investment outlay of $1.59 billion, while Japan holds the third spot having overseen 34 projects valued at $224 million.
“The development progress in this industry is still running smoothly and consistently, because if investors are indeed worried, they wouldn’t have bothered to file a proposal asking permission to construct all these projects in the first place,” Seiha stated, amid lots of grapevine talk about the property glut Phnom Penh is facing.
Focus Property general manager Po Eavkong said that the outpouring of investment from Chinese investors isn’t strange given the sturdy and increasingly intimate diplomatic relationship that exists between Cambodia and China, which in turn continue to attract many mainland investors to Cambodia.
According to Eavkong, it is difficult for China to turn to Vietnam and the Philippines, as Cambodia is the best choice “mostly due to the leniency of the Cambodian legal system and the fluidity of the cash flow.”
He added, “Another point is the fact that the investment flow from China to Cambodia isn’t scrutinised and strengthened properly so this, mixed with the fertile Cambodian real estate industry in the current climate, provides massive opportunities for Chinese investors in Cambodia.”
Cheng Kheng, head of Hutton CPL’s advisory board, strongly believes the reason why many Chinese investors are investing in Cambodia is because of the amity between the two countries that have existed since the reign of the late King, His Majesty Norodom Sihanouk, and now with the current government.
Though this view on the history of Cambodian-Chninese relationship is debatable, in Kheng’s opinion, it is great that investors are clamouring to invest in the Cambodian real estate industry, asserting that these investments are done ethically and with a clear vision.
He continued that other than the real estate industry, Chinese investors have also put their oars in bettering Cambodia by investing massively in the country’s infrastructure, especially road construction projects, including a Phnom Penh-Sihanoukville highway that will start construction in 2017.
Seng Lot, spokesperson for the MLMUPC, said the government welcomes investors from every country, although he noted the People’s Republic has been one of the top players in the real estate industry for a long time.