Logo of Phnom Penh Post newspaper Phnom Penh Post - Sihanoukville property prices double, but is it a bubble?




Sihanoukville property prices double, but is it a bubble?

Topping out? Some investors believe Sihanoukville’s real estate market has overheated.
Topping out? Some investors believe Sihanoukville’s real estate market has overheated. Vandy Muong

Sihanoukville property prices double, but is it a bubble?

Sihanoukville has seen property prices skyrocket in recent years as Chinese investors pile in to the real estate market in the seaside resort. That’s good for the owners of real estate, but some wonder if a price correction might be on the way.

The port city, with its beaches and growing casino sector, has benefited from added infrastructure and is now a bustling resort with more visitors arriving each year. Developments at the port itself, the nearby special economic zone, and the airport have added much to the city’s economic activity. Local officials believe property prices may have plateaued.

Sihanoukville governor Yun Min said that due to the increase in the visitor numbers, Sihanoukville is enjoying rapid development and a rise in land and real estate value, which he says has doubled in the last 12 months. In some places, land values are quadruple what they were just a year ago. “Sihanoukville has gained many Chinese residents and tourists in these last few years.”

However, he added, “Land values in this province will be stagnant in the near future, and I sincerely implore those with money to come and invest in hotels, since the province is in great need of additional hotel rooms for guests to stay in.”

Economic experts have long held Sihanoukville as a province with great potential, as there has been major infrastructure and telecommunications investment. This includes expansions to the port and special economic zone (SEZ), which is now the biggest in the country with 110 factories employing 16,000 people. More and more people are using the airport, too, which now offers direct flights to a range of destinations, particularly Chinese ones.

A total of $310 million has been invested in recent years. Min believes the city will soon surpass Siem Reap as an economic centre because of its diversified activities, which include brewing, garment manufacture, and shoemaking. He said, “I firmly believe that about five years in the future, Sihanoukville will surpass Siem Reap due to its diverse potential, while Siem Reap will mostly depend on its tourism potential.”

Nuon Rithy, the CEO of Khmer Foundation Appraisal, stated that, due to the influx of foreign direct investment, the city is improving at a rapid pace. This is particularly true in its real estate sector. Some land in the Otres area has increased in value over the last year from $400 to $800 per square meter, while the value of the area adjacent to the coasts has shot up from $800 per square meter to $1,200 or even $1,500 per square meter.

Offices and houses for rent have also enjoyed an increase two-fold, due to rising demand from Chinese nationals. Nuon Rithy said, “Sihanoukville is like an unpolished gem, with its potential yet to be fully realized.” He added, “This province will become a manufacturing centre and distribute products to various neighboring countries.”

Lao Heng, an investor in a hotel in Sihanoukville’s Ochheuteal area, warned that the hotel sector in the city is falling behind relative to demand. “There are more air travelers, but the hotel industry is still lagging behind.” He said many casino/hotels require residents to gamble on the premises in order to qualify for a room.

Lao Henghas partnered with Chinese investors to convert his hotel into a casino, but believes that the local real estate sector is overheating. “Land values in the province have indeed shot up, but it’s more of a mass hysteria and is likely to turn out as a bubble, since there are no signs of significant development flow.”

Heng continued, ”If investors aim to shape this city into something like Macao and focus on sustainable development, then it’s a good thing.” Sihanoukville currently hosts 19 working casinos, with that figure set to rise to 28 in the near future.

He added, “Presently, there are about 4,000 Chinese residing in the province as well as an increase in the number of Chinese tourists coming in, but there’s not yet any concerns regarding security or order.”

However, tensions between the hundreds of Chinese construction workers in the city and their Khmer counterparts have been known to bubble over. Up to 50 Chinese construction workers have been arrested in recent months in violent incidents.

MOST VIEWED

  • Hungarian exposes 90 to Covid in Siem Reap

    The Ministry of Health has discovered 90 people who have been exposed directly or indirectly to a Hungarian man infected with Covid-19. They all are required to quarantine at home and the hospital. The ministry is searching for other affected people. Among the 90, one is the

  • PM warns of ‘new Cold War’

    Prime Minister Hun Sen said the possibility of a so-called new Cold War has become a significant concern and that all countries have to reject outright, any attempt to allow history to tragically repeat itself. He made the remarks in a speech during 75th Session

  • PM: West unfair to Cambodia

    Prime Minister Hun Sen released a message celebrating the International Day of Peace on Monday, saying that some major powers and western countries had been systemically cooperating to put political pressure on Cambodia as they did in the 1970s and 1980s. Hun Sen said pressuring

  • ‘Bad news is an investor’s best friend’ – unlocking investment potential in Cambodia

    It is time to shop. Economic woes provide good pickings for investors if they know where to look The poem If, written by English Nobel laureate poet and novelist Rudyard Kipling for his son circa 1895, is widely perceived as fatherly advice for John who would

  • Cambodia, CRF win rice battle in EU Court

    The European General Court has rejected the European Commission’s (EC) request to reject a complaint submitted by Cambodia and the Cambodian Rice Federation (CRF) regarding the EU’s reintroduction of tariffs on Indica rice exports from Cambodia. A court order uploaded to the European

  • PM requests Russia’s Covid vaccine

    Prime Minister Hun Sen has requested that Russia provide Cambodia with its Covid-19 vaccine after the former announced it planned on mass vaccinating its population next month. The request came on Thursday through the prime minister’s Facebook page as he met with Anatoly Borovik,