For many in the region, the mere mention of Sihanoukville evokes images of seedy, carbon-copy bars and budget guesthouses, packed with booze-fuelled western tourists after a cheap fix of sun, sand, sea and maybe a little something more. However, a number of recent developments could change the face of Cambodia’s newest city, paving the way for a potential influx of investment and a surge in the property market.
One of the main factors behind the newfound optimism in the seaside city is the re-launch of Sihanoukville Airport, with local Carrier Cambodia Angkor Air running regular flights from the Kingdom’s largest tourist destination Siem Reap. The south coast has also received international attention after entering the coveted World’s Most Beautiful Bay Club.
The expected increase in tourism will see the city emerge as an ideal investment destination, particularly at the higher-end of the market according to CBRE Indochina Chairman David Simister.
“Outside the industrial and agricultural sectors, the single easiest way to increase foreign revenue and drive the country forward is to connect the south coast beaches with the tourist market of Angkor,” he said, adding that most visitors to Angkor Wat are on a five-star level, but struggle to find appropriate accommodation in Sihanoukville.
“It’s a push-pull situation, hotel investment is waiting for the airlift and vice versa, but at least that’s started. It’s very important the Cambodian government ensures this connectivity continues to grow.”
Simister highlighted high-end tourism as a key to increasing foreign investment, which, he said, over five years has the potential to quadruple, adding that the success of Song Saa Private Island showed the interest investors have bestowed in the area.
“It has had an amazing sales record, with the highest conversion rate of potential buyer to purchaser than any project myself, and the company, has ever been involved in,” he said, adding that over 90 per cent of the project has already sold.
Song Saa, perhaps quite rightly, has been unofficially hailed as the flagship of the coast’s high-end transition, drawing an array of global plaudits and a major regional property award.
The resort, which is located in the south western Koh Rong Archipelago, is now preparing for next month’s grand launch. Conservation is at the heart of the resort with all 27 luxury villas constructed from locally-sourced materials. Prices for a one-bedroom villa start at US$600,000.
Another nearby offshore development Morakot Island will launch later in the year. Set on a 120-hectare island, the project, owned by Russian firm Koh Puos Investment Group, includes more than 500,000 square metres of residential, commercial and leisure property. The variety of villa units, which can be owned through the usual 99-year lease, start from $1.5 million.
Further down the market, major Cambodian company Thai Boon Roong Company, developers of Phnom Penh’s Intercontinental Hotel, continues its construction of Pearl City Asia.
The project is slated to include a mix of more than a thousand residences, starting at $240,000, served by a shopping mall, a school and a hospital. The company will also build hotels on the 62-hectare site, which sits in Mittapheap district, near Sokha Beach Resort.
The resort, currently Sihanoukville’s only five-star hotel, was recently extended to accommodate the increase in tourism expected from the launch of the airport.
“The airport will have a big impact on travel routes to Sihanoukville, giving people the choice to come here a beach holiday, rather than flying direct to Thailand. An increase in high-end hotels on the coast providing quality services, would be provide the perfect opportunity to take business away from Thailand,” said General Manager Friedhelm Detjen.
The 23.5 hectare resort, which opened in 2004, now boasts a total of 69 over-water bungalows and ten exclusive villas.
While Sihanoukville is amid this current sea of activity, with many smaller hotel and housing developments cropping up in the city and surrounding area, Simister stressed that the caution held by investors and demand for low-end accommodation could delay the rise of the high-end sector.
“These things are gradual, there is still much more demand for town houses and shop houses than for top-end luxury villas. Also, people these days like to see good management and a solid income, which is a shift away from investing in the luxurious pool villas, which sometimes prove economically difficult to rent out.”
There’s no doubt Sihanoukville’s property market is set to explode in the coming years given the economy remains stable, yet the question stands whether it can maintain its journey towards becoming South East Asia’s latest luxury destination and justify its entrance into the World’s Most Beautiful Bays Club.