Director Song Soo Kim, from Hyundai Amco Cambodia, a subsidiary of Korean conglomerate Hyundai, is excited about the economic future of Cambodia. HAC’s latest construction success is the 22-storey high-rise office building Hyundai Phnom Penh Tower, which opened for business in 2011. Song Soo Kim sat down with the Post’s Soo Jin Kim to talk about the industry.
Why invest in Cambodia?
Cambodia is a “blue ocean” – it has endless opportunities for investment and future development. Cambodia is not well developed [now], but there is potential in the future.
I believe that Cambodia will grow, but the question is: when, and by how much? Firstly, there is political security [right now], which is very important for the economic sector to grow. Secondly, there is strong evidence that Chevron will start [pumping oil] from 2013, which will help Cambodia’s economic situation, and draw even more investors.
I think Cambodia has a bright future; it will grow, but it won’t be fast – it will take a step-by-step process. There is potential in the younger generation – more than 50 per cent of Cambodians are either in their 20s or younger. If we provide good training and work experience, I believe that they will be able to grow quickly [into an impressive workforce].
Cambodia also allows investors to come in [and offers] good benefits within the business environment – they have opened up everything with almost no restrictions. I believe a lot of investors will start to rush in soon.
How is the Phnom Penh Tower doing?
We have a 75 per cent occupancy rate. It’s not bad, but not good either. It’s better than we expected. Initially, we planned to build this office building to sell, not lease, but after the 2008 economic crisis, we changed our plans.
We [decided to] keep this building [on] a long-term basis, and lease [the offices]. At that time, we expected it to take two to three years to achieve full occupancy, but now [we] expect to reach full occupancy by the middle of 2013.
What is the demand for office space in Cambodia?
There are two different types of office space available in Cambodia: grades A and B to C. There’s a price and a quality difference. There has been an increase in demand for both, but more for grades B to C.
There has not been a big increase in demand for grade A offices. The demand for grade A offices are correlated with the economic situation in Cambodia. These offices are usually taken up by big investors, like Manulife. [On the other hand] there is a lot of demand for grade B to C offices, especially with smaller investors and overseas companies, who look for small, cheap offices.
Is Hyundai Amco Cambodia thinking of expanding its business?
Yes. [Apart from] the Phnom Penh Tower, we are also currently building a new Human Resources Development Center in Royal Phnom Penh University, and constructing rural roads [across the nation].
We just recently signed a contract with $45 million with Acleda Bank to build a new 22-storey office building for them in front of Vattanac Tower. In the future we will expand our construction business to build more roads and even serviced apartments.