The number of legally registered real estate companies in Cambodia grew by nearly 50 per cent in the past year, a development that industry leaders say bodes well for development of the property sector while reflecting increased domestic and international confidence in Cambodia’s future.
Since the end of 2012, 19 new licences for real estate companies were issued by the Cambodian government. More than half of those were issued to companies with foreign investment. There are now presently 59 licensed real estate companies operating in Cambodia, 33 of which are also members of industry association Cambodian Valuers and Estate Agents Association (CVEAA).
Cheng Kheng, CVEAA president and director of Cambodia Properties Limited, told the Post that the 48 per cent jump in licensed real estate companies over the past 12 months demonstrates an increasing interest in Cambodian real estate internationally.
“The growing number of companies illustrates the growth of real estate sector in Cambodia as well as growing international investment inflows,” he said.
Even though there is positive growth in the number of legally registered real estate companies, CVEAA property investment research suggests that up to 90 per cent of real estate investments in Cambodia are not properly licensed.
Kuy Vat, president and CEO of VTrust Group, said growth in legally operating real estate companies in Cambodia, especially foreign-invested companies, would have a positive net effect upon the industry by driving competition. Vat added that the influx of foreign investment in Cambodia is an indicator of confidence in economic growth and political stability in the Kingdom.
“Among the 10 countries in ASEAN, people are only talking about Cambodia and Myanmar as places with untapped potential that provide investors with confidence,” he said. “Cambodia gets higher marks than Myanmar due to its better investment policy, whereas, in terms of comparing market potential, Myanmar has the edge with its larger population.”
Nuon Rithy, general manager of Bonna Realty Group, pointed at more than 50 per cent growth in CVEAA membership over the past year as a similarly positive trend to the increase in licensed real estate companies. CVEAA membership grew from 20 members to 33 since the end of 2012.
Cambodia’s moves to strengthen rule of law and increase transparency have not only improved prospects for domestic players, Rithy said, it has also kindled interest by investors from South Korea, Japan and the European Union.
“We do not worry about competition from foreign companies,” Rithy said. “In contrast, it is extremely positive that foreign companies are entering Cambodia. This increased competition will force local companies to strengthen themselves, which will prepare them for upcoming challenges in the ASEAN market.”