Foreign investment in Cambodia is up 800% in 10 years, Phnom Penh has been a major beneficiary
Foreign investment in Cambodia has risen by 800% over the past decade. Multinationals such as Starbucks (SBUX), Samsung Electronics (SSNLF), Toyota Motors (TM), and Nike (NKE) already have a foothold in this undervalued Asian (AAXJ) (VPL) (IPAC) economy, setting up their operations in the lively capital of Phnom Penh.
2017 is an interesting time for foreign private investment in Cambodia
The full potential of the economy had remained unnoticed by many for years. Even now, it is far from overrun by foreign capital. According to Simon Griffiths, the senior associate director for CBRE Cambodia, “2015 saw a spike in foreign direct investment (FDI) in Cambodia, and the property sector was a big benefactor of these investments……. FDI in property/real estate remained strong in 2016 but not equal to 2015’s……… Looking ahead for 2017, it is likely FDI will remain high but not in the same sectors or geographies as experienced in 2015 and 2016.”
Phnom Penh is brimming with development
“If Phnom Penh is a cup, then that cup is brimming with development,” said Griffiths in January this year. For 2017, Griffiths expects foreign investment to move towards entertainment, hotels, condo-hotels, and retail rather than the residential sector as seen in 2015 and 2016.
The next real estate boom could be in Sihanoukville
From a geographical perspective, he expects the next real estate boom to be in Sihanoukville. Sihanoukville, also known as ‘Kampong Som’, is a coastal city in Cambodia. Sihanoukville is known for its beaches and the rapid growth in tourism numbers to the area. While Phnom Penh and Sihanoukville should continue to be the primary beneficiaries of real estate development in Cambodia, mid-tier cities like Poipet and Battambang are also expected to witness a rise in property prices, all attributable to urbanization and growth in this Asian frontier market (FRN) (FM).
“Expect more tourism, hospitality and entertainment investment but also residential investment, and, interestingly, that residential foreign investment may not just be in condos but also on the ground,” said Griffiths, who also highlighted the possibility of Sihanoukville gaining a ‘Special Status’ which would permit foreigners to buy land within specially licensed areas within the province.
