S’ville property takes a hit

Content image - Phnom Penh Post
A Chinese national frisked by immigration officials earlier this month after a crackdown on illegal gambling. General Department of Immigration

S’ville property takes a hit

Sihanoukville’s property market has taken a blow since Chinese nationals living and working in the city upped and left following last month’s police arrest and extradition of 168 Chinese, local real estate agents say.

On October 31, Cambodian immigration police working with Chinese Interpol agents raided a villa and a guesthouse in Sihanoukville, busting a ring that was using an internet-based telephone system to extort money from victims back in China.

Many of those arrested in the Cambodian raids were working in casinos in Sihanoukville, an industry that has seen strident growth on the back of Chinese investment in the past year, but which will be challenged after hotel and casino owners told The Post last month they have suffered immense losses and risk bankruptcy.

Bonna Realty Group’s valuation manager in Sihanoukville, Phourn Sophy, said the sudden departure of Chinese investors, workers and tourists who have left the coastal city en masse and put investments and staffing in disarray, has also seen such tenants renege on their rental agreements and contracts.

“Suddenly, the Chinese people just left, leaving property developers worried,” he said.

Those that are still here have cut down on how many months deposit they are securing in case the situation intensifies, choosing to put down two months’ rent in advance as opposed to six months’ like before, said Sophy.

The upheaval has also left developers and landlords, who were swept with excitement six months back when they saw Chinese demand for property increase, saddled with bank loans they will struggle to pay back, Sophy added.

“I don’t think this situation is temporary. Those people who have gone won’t come back so yes it’s a problem for the property business.”

Norn Thin, director of Sihanoukville Property, said he knows of one building with about 20 rooms that has closed since the arrests.

“Chinese people tend to all stay in one big building all together with about 20 to 30 rooms,” he said.

Thin added that despite the trepidation in the market the rental prices for such large residential properties are still double what they were last year, while Sophy estimates such prices may have fallen by less than 5 per cent.

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