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The Peak Cambodia-An oasis in Phnom Penh

1. Cambodia is the up and coming market in Southeast Asia

Since the year 2010 Cambodia government open its door to foreign investors, we have seen many foreign developers ventured into this jewel in Southeast Asia. The Chinese, Hong Kongers, and Singaporeans in particular are scouring Asia for opportunities to invest as a safe haven for their cash.

While Cambodia is definitely among the most emerging of markets here in Southeast Asia, prices are still somewhat reasonable. The land price in Cambodia has double given the strong interest from international investors. Nonetheless, given the positive outlook of the economy, Phnom Penh is poised to offer investors great capital appreciation potential.

2. Real estate investment flexibility

As an emerging market that offers promising growth, Cambodia government has an encouraging and transparent policy that attract the international investors to invest. There isn’t any capital gain tax on your property when you sell, and also there isn’t any restriction if you choose to flip you property for a profit before completion.

3. Tourism to Cambodia is growing.

Tourism in Phnom is growing, bring in millions of potential property investors every year. Many multinational companies and renowned food and beverage (F&B) brands had set up their company here, mainly in the newly open AEON mall. The land price in Phnom Penh has double comparing to 4 years back. We have seen a strong yield of 9-11% over the past 2 years, and is expected to remain strong.

4. International groups & expats are locating here.

Set aside oil companies like Chevron negotiating profit sharing deals with the government. A large number of international real estate companies, chain restaurants, and other concerns are setting up shop here.

International groups that are already here are expanding their presence. One of the largest international schools,  is moving south in the city and expanding their footprint.

Other companies are following suit. International companies, which can deploy their capital anywhere, are choosing to increase their bets on Cambodia having already seen the results.

5. The benefits of foreign real estate on steroids.

Investing in real estate in Cambodia is different from your past experiences if you live in the west. Adaptation is the most important financial survival technique when taking part in what I call the world’s “new boom markets”.

For example, the title system here is very unregulated. There is no official property data or analytics, and any you could compile would be inaccurate. The market here is quite informal, yet the real risks are rather low.

Cambodia has one of the world’s youngest populations and is well-positioned in a growing region with emerging tourism, resources, and labor opportunities. There is plenty of room to offer “value add” here and outpace any competition, be it in real estate or anything else.

We have seen examples of places like Dubai and Cancun where the place went from zero to sixty practically overnight. Cambodia has great potential to be a similar success story. At some of the prices here, anyone can get into the game, with the massive credit bubbles and zero down loans we’ve seen propping up worthless property values in far-flung California desert cities.

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The Peak Cambodia – Strong economic growth

Cambodia GDP inflation, the Cambodian economy was estimated to have expanded by about 7%, according to the International Monetary Fund (IMF). During the first nine months of 2014, the total number of foreign visitors who visited rose by 5.83%.

Cambodia continues to enjoy robust growth, albeit at a slightly slower pace. Real growth in 2014 is estimated to have reached 7%. The garment sector, together with construction and services, in particular finance and real estate, continues to propel growth. However, the 2015 and 2016 projection for economic growth is about 6.9%, as it confronts stronger competition in garment exports, continued weak agriculture sector growth, and softer growth in the tourism sector.

Cambodia has made good strides in improving maternal health, early child care, and primary education programs in rural areas. The number of deaths per 100,000 live births decreased from 472 in 2005 to 170 in 2014, the under-five child mortality rate decreased from 124 per 1,000 live births in 1998 to35 per 1,000 in 2014, and the net primary school admission rate increased from 81% in 2001 to 94.3% in 2012.

The outlook is for economic growth to pick up in light of anticipated stronger performance in trade partners – the United States and Thailand and, to a lesser extent, the European Union – coupled with a calmer domestic political environment and lower fuel costs. The gross domestic product is projected to increase by 7.3% in 2015 and 7.5% in 2016.

Over the medium term, growth will be stimulated by gradual diversification into light manufacturing and further integration into regional and global supply chains.

Phnom Penh is now an elegant, well-planned, prosperous city – whitewashed, bristling with economic activity. Over the past 2 years, it had attracted many foreign investors from Taiwan, China, Malaysia, Singapore and Japan to venture into this jewel in South East Asia

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The Peak Cambodia – Attractive returns on apartments in Phnom Penh

There are different interpretations between apartments and flats in Cambodia. Cambodia defines apartments as non-landed housing units in a building, or what is commonly known in the wider world as condominiums. Flats, also known as shop houses, are landed properties, with a ground floor, and up to two or three floors. Flats are the equivalent of row houses.

Foreigners are not allowed to own land in Cambodia, they can only purchase apartments.As the transacted price of properties is not publicly available on any website, this survey is about the prices of flats (row houses) and villas.

Flats in Phnom Penh, Cambodia’s capital city, cost around US$3,000 per square metre (sq. m.). We surveyed flats located in the prime residential areas of Phnom Penh, like Daun Penh (KDP), Tuol Kork (KTK), Chamkarmon (KCKM), and 7 Makara (K7MKR).

Rents range from US$9 per sq. m. to US$13 per sq. m. per month. A 65 sq. m. flat costs US$600 per month to rent. A 120 sq. m. flat costs more than twice as much, at around US$1,500 per month.

The gross rental yields for flats in Phnom Penh, i.e., gross return on investment in a flat if fully rented out, ranges from 3.27% to 5.33%.

Villas are more expensive than flats, ranging from around US$3,500 to US$4,500 per sq. m., with smaller villas fetching the higher prices.

Rents are also highest for smaller villas. For example, a 150 sq. m. villa costs around US$13 per sq. m. per month, while a 300 sq. m. villa costs only US$9 per sq. m. per month.
Villas earn poor rental yields, ranging from 2.8% to 3.43%.

 

Source : globalpropertyguide

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