In the aftermath of China announcing its clampdown on outbound foreign investment late last year, Cambodian real estate experts have come to a consensus that its ramifications are not crippling to the real estate and construction sectors in the Kingdom.
Kuy Vat, CEO of Century 21 Cambodia, said via phone last week that China’s outbound investment to Cambodia had not been included in the People’s Republic’s regulation. While the regulation vowed to tighten the reins on capital outflows from China, real estate and construction projects spearheaded by Chinese companies continue being built with vigour in Cambodia.
“Whether the cash flow restriction has affected Cambodia or not, and to what extent, I guess we’ll have to wait and see. However, I don’t think that this sector is dependent on China,” Vat noted.
This could be attributed to the fact that Cambodia does not solely rely on China, and has been the recipient of investments from various other countries like Japan, Korea and Singapore, he added.
Meanwhile, real estate firm Huttons CPL’s head of advisory board Cheng Kheng noted that the restriction only applied to companies legitimised under the People’s Republic of China, hence sparing Hong Kong and Macau companies the curb. Despite the current situation, Kheng said, Chinese investors have not let up in buying condo units across the country, especially in Sihanoukville.
He warned, however, that the relationship between Cambodia and China needed to remain dandy: “China’s cash flow restriction might really affect Cambodia. However, whether that influence is great relies upon the diplomatic relations between the Cambodian government and the government of China.”
According to the latest report in October by the Ministry of Land Management, Urban Planning, and Construction, China has maintained its reigning spot as Cambodia’s biggest foreign investor after edging South Korea out of the seat with an investment outlay of $1.66 billion and 110 projects in the Kingdom.
Kim Heang, president of the Cambodian Valuers and Estate Agents Association (CVEA), was untroubled, citing the two countries’ close-knit relationship: “This regulation will not affect the countries with good relations with China, especially Cambodia, which benefits China as much as China benefits her.”
However, the issue is viewed with some trepidation by Touch Samnang, vice president of Overseas Cambodian Investment Corporation, who said he had qualms after the announcement last year.
“I’m worried that Chinese investors might experience problems with their projects in the future due to the slowing activity of buying and selling condos, despite having sold a large number of the units,” Samnang said.
On the same note, David Van, local managing director of Bower Group Asia, emphasised that the drying up of funds from the Chinese shadow banking platform had led to some Chinese-funded projects now being put on hold, which occurred also as a result of market corrections.
“Irrespective of how close the bilateral relationship is between China and Cambodia, the Chinese government only provides concession loans and/or grants for specific infrastructure projects,” Van said.
“But this is not so for the property sector, which remains the domain of the Chinese “private sector” to invest in.”
Additional reporting by Hanamariya Halim