Kuy Vat, the president and CEO of VTrust Group, started his real estate company in 2005 after he saw the potential in the sector amid the steadily growing economy.
Recently, Kuy Vat spoke to Post Property reporter Siv Meng about the development of Cambodia’s real estate sector.
When did VTrust begin?
I opened VTrust Group in 2005, focussing mainly on the services related to the real estate sector, such as apartments, office building rentals and the purchase and sale of real estate, and in the future we will also have project such as villas, condos and apartment blocks.
During the global economic crisis, the real estate sector declined sharply but has recovered in the last few years; do you think this recovery will lead the real estate price to rise like before the crisis?
Although the price of real estate this time has recovered it is not the same as before, like the period between 2006 and 2008, because at that time the prices were like a bubble. The investment during that time was made by following each other, but this time we can see that Cambodian people understand a lot related to the real estate sector. The purchases and sales this time are careful, and now investors mostly venture their investment in a large scale and over the long term as well. So I think that the rise in real estate prices this time is in a good condition, which is steady and sustainable and not a bubble like before.
The Royal Government of Cambodia has an open policy which allows foreigners to buy a house from the first floor upwards, and this is also a factor boosting the real estate to grow better. On the other hand, this time there are a lot of investors coming to Cambodia, which is a good sign for the real estate because those investors always need accommodation, office buildings and goods warehousing etc.
What is condition of the real estate prices compared with neighbouring countries?
This is a good question, because Cambodia is still receiving the influx of major investors as land and real estate prices are cheaper than those in the neighboring countries.
For example, Myanmar, when their government makes political and economic reforms there were a lot of investors interested in investing in the country, but real estate there reached a very high level, which made some investors turn to Cambodia. The main reason there is because the country’s currency value is rather unstable, which makes people and investors buy real estate for speculation and this is making the real estate price increase sharply and affect the investors as well.
Could real estate prices in Central Phnom Penh be the same as Myanmar?
Real estate prices in central Phnom Penh could rise the same as in Myanmar, but what is good is that the real estate in the suburbs of Phnom Penh are cheaper and larger in size. In the next five to 10 years we are not worried that the rise in price will strongly affect investment.
What strategy do you have in order to make your company have marketing excellence while more and more companies are coming in to the country?
Our country is developing, so there are a lot of investors coming. I think competition is good because when we have competition, it will make us try our best and the transition that we are trying is to make is for our company to have a good reputation and gain trust from customers as this is a major capital. So we must be careful with what we do and must do whatever gains trust from our customers.
If we lose our customers’ trust, we will lose customers, and when we lose customers it will make our company difficult to work and lose human resources, and as we now compete based on human resources, so in order to maintain our human resources we must have a long-term prospect in maintaining our team in order to become a force for competing with foreign companies.
What is your company’s strategy in order to gain customers’ trust?
We have many strategies, but I would like to highlight three important points. Firstly good service and relations at appropriate fee rates, and when customers have any problem, we must deal with it soundly.
Secondly VTrust Group has cooperated with big partners such as banks to provide clear schedules of payment.
And thirdly, capacity building, because when we have a good team and good management to work with, everything will work well. In fact, recently, the company offered a capacity building course for them because their work performance will be limited if they have limited capacity. If they have strong capacity, they can make customers feel confident. If we have a good reputation, with partners of limited capacity, we cannot provide good service to customers.
Do you think when more foreign companies enter into the market, the share of market for domestic companies will drop?
When foreign companies enter into the market, usually it will reduce the market share of local companies, but if no foreign companies come, we don’t know how strong they are. So when we see them coming, we must try harder. When we compete with them, the quality of service will improve. In short, as there are opportunities in our market, the impact is not strong.
When Cambodia is integrated into the ASEAN Economic Community, what challenges do you think there will be for Cambodia?
I think there are challenges and opportunities. It is an opportunity, when we are well prepared because if we are not, it is a challenge. What is important is the preparedness so that investors can cooperate with us because we must build confidence in the local market to gain the confidence from our customers. Thus, if we are not well prepared, the opportunities in the local as well as foreign markets would be lost. For VTrust, I have been prepared to compete in the upcoming 2015 AEC.
In 2015 will Cambodia’s property price rise sharply like 2008?
The price of properties in Cambodia is on the gradual rise, but it hasn’t risen sharply like 2008, but it has increased gradually, not like the bubble years.
In 2015, the price will increase sharply because Cambodia can attract many more investors to Cambodia due to many important factors: Firstly, political stability and security; secondly Cambodia’s laws have improved, and thirdly Cambodia’s robust economic growth.