While Cambodia’s residential real estate market is currently still at its peak, concerns about getting stuck in a rut are elevating. A mainstay question has now arisen: What are the responsibilities of investors and real estate agents regarding their projects and the push for sustainable development?
Po Eavkong, CEO of Focus Property, said that the question regarding the responsibility and ethics of developers and real estate agents is “a big question”.
“Are there enough laws? Because when we talk about responsibility and professionalism, it’s hard to practise because we don’t have anything to compare them with. Therefore, we need to have a law that developers must abide by, and use as a guiding map.”
Real estate agents should also shoulder initiatives instead of relying upon often-murky laws, or lack of, concerning the sector. “Regarding responsibility, we should talk about the law that will result in responsibilities. That’s because the value of professional ethics is still relatively low in Cambodia,” Eavkong said.
Ann Thida, director of CBRE Cambodia, said as an established company in the sector, they always strive to provide reliable information by conducting market research, and giving consultations to investors on key strategies and investments.
She continued, “Knowledge about the market is also crucial as investors need to know about the market. Most of the investors are foreigners and they focus on foreign markets. Therefore, they should refocus on our local market.”
Thida added that investors should place more emphasis on the quality of construction as a sound long-term commitment instead of a short-term revenue sprint that leads to loss of clients’ confidence.
Touch Samnang, vice president of Overseas Cambodian Investment Corporation (OCIC) which is investing in the multi-million dollar Olympia City project, shared that condos that are being sold for $2,000 to $3,000 per metre square are up to three times more expensive than their original cost of construction.
“Investors should sell their condos at $1,500 to $2,000 per metre square in order for middle-income citizens to afford them.”
When asked if OCIC’s project abides by this rule, Samnang explained, “The price of a project depends on the location, and quality of building. Olympia City is located in the business centre of Phnom Penh.”
He elaborated that some foreign developers have a strong market abroad, so they are able to execute their projects appropriately. However, some projects do not have a ready market pool, and their developers are unskilled, thus taking a big gamble in the risky business of construction.
Sharon Liew, CEO of Huttons CPL, which is the exclusive leasing agent for the $200 million Sino Plaza mixed-use project in Boeung Trabek, said Sino Plaza is advancing forward amid the recent curse of delayed projects, and cited the vital role that Chinese investors play.
She added, “China and Cambodia have long had a good relationship. China is playing an important role in pushing Cambodia’s economy forward by building a lot of infrastructure.”
Liew added that developers can easily earn a profit here; therefore, they should contribute positively to this country. “They should give back such by selling their condo at affordable rates for the local people. Sino Plaza has plans to reserve 10 per cent of its residence for middle-income citizens to help contribute to the development of this country.”
She raised another point in developers’ vested interest: “If you only think about making a profit, that’s not good for your project in the long-term. Contributing to the society actually makes you earn more.”
Another industry expert, board director member of Huttons CPL Oknha Cheng Kheng, said the real estate market outlook in Cambodia was healthy. Last year, there were about 1,500 recorded sales and rentals among house and condo units per month. He expects this year’s figures to be about 1,800 to 2,000 per month.
“Some companies are not working well. They can’t sell their condos, so they say the market has slowed down, but in fact, the market is working great. Sales are still going well,” he said, adding, “What’s important now is that we need to work professionally and responsibly because investors put in millions of dollars; therefore, their confidence is crucial.”
From a governmental stance, Mey Vann, director of financial industry at the Ministry of Economy and Finance, said the ministry has sufficient regulations for any particular developer, all cited in the Book of Duty – a contract between ministry and developer.
A developer must deposit two per cent of their project cost to the ministry so that the ministry can pay back to their buyers in case the project remains unfinished. And under no circumstance can investors use their clients’ deposit money for their construction.
Vann continued, “As for pricing of real estate, it depends on the developer. We are in a free market, so we can’t set a price for the developers.”