In the course of a city’s development, especially a capital city, certain events serve as mile markers, raising their profile both regionally and globally.

For Phnom Penh, the change in regulations in 2010 that allowed foreign nationals to purchase condominiums above the second floor with hard strata title marked a new stage in attracting foreign investment.

Since 2010, another event has suggested that Phnom Penh’s property market has entered a new stage of development: the recent surge in Japanese investment in Phnom Penh condominiums.

Few understand the changing views of Japanese investors toward Cambodia better than the upper management of boutique real estate consultancy AnnaCam Partners, one of Phnom Penh’s top providers of real estate services to Japanese investors.

Phnom Penh-registered AnnaCam organises investment seminars in Japan for potential investors who want to learn more about the pros and cons of investing in Phnom Penh. Afterwards, groups of 10 or more investors come to the capital to personally inspect condominiums and decide whether to take the plunge and make a purchase.

AnnaCam CEO Anna Araki told the Post that Cambodia’s recent emergence on the radar of Japanese investors was based on a growing understanding of the current state of economic development in the capital.

“Most Japanese that come here are pleasantly surprised,” Araki said. “Before coming here, many people think the city might still have mines, but they quickly realise that Phnom Penh is already quite developed.

“They fall in love with the friendly locals, good restaurants and cafes and abundant culture.”

In the second half of 2013 AnnaCam hosted visits by dozens of investors from Japan, many of whom purchased condominiums in Phnom Penh – all at De Castle Royal in the city’s tony BKK1 district. In fact, during that time, AnnaCam was the top sales agent for properties in De Castle Royal,

which will open its doors in the second quarter of this year.

Perhaps AnnaCam’s success in selling De Castle Royal to Japanese investors should not be surprising; Araki herself has purchased condominiums in the tower.

“Japanese are very conservative investors,” Araki said. “Even if they have a lot of money to invest, they’ll only begin with small amounts. If the return on investment is satisfactory, they will invest more.”

AnnaCam founder Jun Takeguchi, whose previous professional experience includes seven years at Mizuho, Japan’s largest commercial bank, as well as consultancies KPMG and SBI, said that AnnaCam’s clients are purchasing condominiums in Phnom Penh to rent out to expatriates living in the capital. The high demand for luxury accommodation in the city centre combined with the rents that can be charged are but some of the main factors that make De Castle Royal appealing to Japanese investors.

“There is more information about Phnom Penh in Japan than ever before,” he said. “Famous Japanese companies such as Aeon, Denso and Minebea are investing here, which adds credibility in the investor’s mind. Japanese are also learning more about the economic situation in Cambodia as well as the legal system and the importance of having a hard title for a property”

Japanese media are beginning to pay more attention to condominium investment opportunities in Phnom Penh, Takeguchi said, citing recent articles about De Castle Royal in Japanese business magazines including Nikkei Money and The Economist.

AnnaCam CEO Araki said that she recommends De Castle Royal over other condominium projects in the city for several reasons.

“De Castle Royal is the first true luxury condominium development in Phnom Penh,” she said. “It has a great location and the design and construction by [Phnom Penh-based Korean developer] Nuri D&C is of the highest quality. On top of that, the high occupancy rates in other apartment buildings in the area make investors confident that they’ll be able to get high rents for their condos.”

Given the quickly dwindling number of unsold units at De Castle Royal, AnnaCam will soon have more time to focus on its longer-term goals.

“We want to serve as an investment bridge between Japan and Cambodia,” Araki said. “Not only for the benefit of Japanese investors, but also for the development of Cambodia.”