Even with a flurry of road infrastructure projects nearing completion, Sihanoukville’s real estate market belies the promise of robust growth that 2018 brought for the once-sleepy coastal town, according to observers in the Kingdom.
In late 2019, the government allocated $300 million from the national budget to build 34 roads and for other infrastructure projects in Preah Sihanouk province.
The move aimed to transform its provincial capital Sihanoukville and surrounding areas into a multi-purpose model special economic zone and a sustainable pole of national development that will allure more tourists and fresh investment from abroad.
Oem Senghou, a branch manager at Sihanoukville-based Century 21 Zillion Holding, a sub-franchise of real estate agency Century 21 Cambodia, told The Post on March 3 that the province’s real estate sector had begun to exhibit small growth spurts since the end of last year.
This, however, followed a tumultuous period of sharp declines in property transactions and rentals in Preah Sihanouk after hordes of Chinese tourists and investors quit the province following a nationwide government ban on online gambling. The arrival of Covid-19 only compounded the sector’s woes, he said.
But early-year growth ambitions were quashed by the February 20 community transmission, plunging the market to new lows, he said, stressing that economic activity in the “nearly paralysed” rental segment has more than halved.
The latest transmission “is having a number of repercussions for the real estate market in Preah Sihanouk, especially the rental market, which has been pushed to deadlock after authorities identified a series of positive cases of Covid-19”, Senghou said.
“If the number of Covid-19 cases detected in Preah Sihanouk continues to increase, the market will continue its decline,” he said.
According to Senghou, per-sqm land prices in Sihanoukville range from $1,800-3,500 in commercial areas, $250-300 in more remote suburbs and $500-700 in areas adjacent to main roads.
These rates are 20-30 per cent lower than they were when the province’s real estate sector peaked in 2018-2019, he said.
But in a fit of optimism, Senghou added: “After the construction of the infrastructure is complete and Covid-19 is completely under control, I think the market will start its recovery process to pre-2020 levels.”
Keller Williams (KW) Sen Sok regional operation principal Sam Soknoeun claimed that property prices in the town’s prime locations can reach more than $4,000 per sqm when the provincial real estate market is at its hottest.
Nonetheless, prices in more remote suburbs remain at $100-300, he said.
Even with the government busy building a series of roads, the effects of Covid-19 on the real estate sector cannot be mitigated so easily, he pointed out.
“Real estate can only make a significant recovery if Covid-19 is controlled 100 per cent effectively and the roads are ready. However, property prices will no longer see such leaps – and that’s because in Preah Sihanouk province they are already astronomical,” Soknoeun said.
On February 22, Local developer 5LH Lorn City Development Co Ltd’s (Lorn City Group) $100 million residential project broke ground in Preah Sihanouk to meet the growing housing demand in the province, the provincial administration said in the press release.
Tol Lorn, founder of Borey Lorn City II Sihanoukville, said the project will be built on 66ha in Prey Nop district’s Bit Traing commune.
Speaking at a press conference on June 9, provincial governor Kuoch Chamroeun said that as of May, the province has attracted nearly $4 billion in investment projects since 1994, with just 20 companies having developed projects on a cumulative 11,637ha on the province’s beaches and islands with total capital investment of $3.9 billion.
He said an additional 60 companies had unveiled plans to invest a total of $10.74 billion in hotels and tourism.