Search form

Login - Register | FOLLOW US ON

Logo of Phnom Penh Post newspaper Phnom Penh Post - Siem Reap hotels oversupplied

Siem Reap hotels oversupplied

121212 07

Potential real estate investors in Siem Reap are being advised to look towards retail strips rather than hotels, according to Cambodian real estate professionals.

Knight Frank’s Cambodia chief, Sunny Soo, said that while the hotel industry is well supplied, the town lacks an organised retail strip.

“I think it can have a retail street. A more developed retail strip like you might find in Bali or Phuket would do well. It just doesn’t have a very organised retail street right now,” Soo said.

He said there are more than enough hotels in the area, leaving it less attractive to hotel investors.

“Siem Reap has developed to the stage whereby the supply is more than sufficient to cater for the existing and future demand,” Soo said, adding that with hotels, the occupancy rate isn’t that strong, apart from a few which are doing fairly well.

“But new hotels usually do not perform that well. I do not know if the area can fit in another five-star hotel.”

His thoughts are echoed by CBRE’s Simon Griffiths. “Today there is an oversupply of hotels in Siem Reap. Tourism figures are increasing and demand is in line with supply,” Griffiths.

“Developers have been looking at possible residential developments for expats and the growing middle-class market.

So that’s a shift away from tourism and retail is certainly a viable option, catering for people with disposable income. But that’s still a few years away.”

Griffiths said there has been increasing developer interest in the town.

“We are seeing an increase in activity. Just in the last couple of months CBRE has had to go up there a few times.

There are more and more people approaching us,” Griffiths said.

Soo said the area could also cater to a few more apartments, but investors looking at building for the expat retiree and holiday-home market are more interested in areas like Sihanoukville and Phnom Penh.

“You could have a few apartments in Siem Reap, but not many,” Soo said. “I can’t say whether the market is now justified for serviced apartments.”

Overall though, he said overseas investors, particularly Koreans, are interested in the area. His office receives regular interest in investing in Siem Reap.

Foreign ownership is tricky though, with foreign investors allowed to own just 49 per cent of a project.

Even finding land to buy in Siem Reap can be difficult, with a dearth of official real estate agents based in the town.

Buyers of smaller plots of land tend to enlist the help of a tuk-tuk driver with knowledge of for-sale signs. For larger purchases, buyers are advised by agents to approach international real estate firms who can negotiate with large landholders in the area.

“There are a number of large landholders who own a lot of land. We can negotiate with them for buyers. For larger assets, approaching a large company is the best way,” Griffiths said.

0

Comments

Please, login or register to post a comment

Latest Video

Rainsy after the deadlock

Rainsy after the deadlock

For almost one year Sam Rainsy and his party refused to take their seats in parliament, despite winning the most seats in last year's election that he has since leaving the government.

Sochua free

Deadlock broken, CNRP pols released

The longest parliamentary impasse in Cambodian history looks to have ended with the opposition Cambodia National Rescue Party agreeing to take their seats in parliament exchange for political concessions from the gove