Securities and Exchange Regulator of Cambodia (SERC) plans to authorise the creation of real-estate exchange-traded funds (ETF) by 2023, and allow them to be traded on the Cambodia Securities Exchange (CSX), raising additional capital for the real estate sector to catalyse economic development.
SERC director-general Sou Socheat told The Post on October 25 that the agency is preparing the regulations for licensed fund management companies to raise money on the stock exchange to invest in real estate projects, calling on interested firms to “gradually prepare themselves”.
Once these exchange-traded products are authorised, property funds can be converted into ETFs and listed on the CSX, granted that they meet the eligibility criteria and that the necessary procedures are followed, he said.
“Right now we are studying the possibilities, we have lots of regulations to prepare in order to make things work,” Socheat said, affirming that the SERC’s authorisation of real-estate ETFs is expected by 2023.
“We’ll need some time to work with real estate regulators,” he said. “We’ll have a set of conditions set out later, maybe later this year or early next year, which we are poring over.”
Socheat shared that the SERC has licensed 15 fund management companies, stressing that they can begin preliminary preparations to offer real-estate ETFs, and that the SERC would take the next steps to get the financial instruments listed on the CSX.
Cambodian Valuers and Estate Agents Association (CVEA) president Chrek Soknim told The Post on October 25 that the new class of investment funds would provide a shot in the arm for the Kingdom’s real estate sector, allowing fund managers to list on the CSX and raise money from the public.
Soknim welcomed the efforts of the SERC and other authorities behind the initiative, which he claimed would help fuel development. “The real estate sector in Cambodia will be stronger and more sustainable,” he said.
Ministry of Land Management, Urban Planning and Construction reportedly approved 19,322 projects nationwide in the 54 months from January 2018 to June 2022, representing total investment commitment of $31.484 billion, with China remaining the top source market.
In the first six months of 2022, just 2,000 projects worth a total of $1.206 billion got the green light, falling short of the average rates recorded during the 1,642-day period, according to a ministry report.
Between 2000 and the June 2022, the construction ministry issued a total of 57,590 construction permits nationwide with total investment commitment of $66.205 billion, including 2,472 buildings at least five storeys tall, and 482 large housing developments such as gated communities, known locally as borey.