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Cambodia real estate sector to flourish in 2023. Many foreign investors have been sending inquiries

Construction & Property reported multiple openings of real estate developers in light of foreign investors taking interest. While the sector may take time to fully recover from the impact of the pandemic, it is expected to show signs of growth at the rate of the country’s overall economic recovery.

According to Cambodia Investment Review, there is no doubt that 2023 would be the year of bigger deals and inbound foreign investment that would bring the real estate sector back to its healthy pre-pandemic levels. Adam Fitzpatrick, country director at local property portal IPS, told the publication that foreign investors have been showing a stable amount of interest in long-term investments in Cambodian land and properties. In light of this growing interest, foreign investors are projected to encounter multiple opportunities to make hassle-free investments due the country’s history of managing units and securing long-term tenants. 

Nevertheless, Fitzpatrick cautioned that external factors will affect the market in 2023. The global economy, in particular, would be the main influence, especially with the growing cost of running a business, regional conflicts, and geopolitical threats.

“However, I’m still very optimistic about Cambodian real estate and I do believe we’re relatively insulated from global economics,” he added. “There are plenty of good opportunities in the market, but you have to understand real estate in Cambodia and the nuances of doing business here. If you want to make a splash in the commercial market, do your research, find a trusted agent, and focus on relationships with advisors, and good opportunities will be introduced in time.”

There are multiple other factors influencing the sector’s growth for 2023, noted private entity Aquarri. Apart from the global economy, some investors have been extra careful in choosing where to place their investments after the pandemic crisis. The re-opening of China also makes a bigger positive impact sinceMainland Chinese, Hong Kong, and Macau-based corporations have already been inquiring about local properties.

The Property Report editors wrote this article. For more information, email: propertyreport@propertyguru.com.




Financial experts predicting increase in foreign investors

Financial and private sector experts said that the removal of Cambodia from the “money laundering grey list” of the Financial Action Task Force (FATF) recently was an absolute necessity for Cambodia’s financial sector. They said it may bring added benefits with it as it could give more confidence to investors and thereby attract more foreign investment to Cambodia.

In Channy, president and group managing director of ACLEDA Bank, said on March 5 that the removal from the FATF’s “grey list” reflected the government’s efforts towards that end to improve its ability to combat money laundering crimes in Cambodia.

 

“Leaving the grey list not only enhances Cambodia’s image on the international stage, but also attracts foreign investment and facilitates the trade of local and international investors in all sectors,” said Channy.

Kaing Tongngy, Cambodia Microfinance Association (CMA) spokesman, said that it was a good and important thing for Cambodia’s financial sector as it would provide more convenience for foreign investors who need to transfer money to Cambodia. If Cambodia had remained on the grey list, investors would face a more complex and challenging process to do so.

 

“As we already know, the policy of the [government] is open encouragement of foreign investment. Unfortunately, in 2019, Cambodia was placed on the grey list, which made foreign investors face some difficulties. However, from now on, foreign investment in Cambodia should improve,” he said.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng said the private sector was very pleased with the removal as businesses were concerned about this issue as well.

“Today, Cambodia is a major exporter, especially for agricultural products for processing, while imports are also high, so there are many settlement transactions between local and foreign investors in US dollars. It is also good news for investors and it will give them confidence and be more convenient to invest in Cambodia,” he said.

Ky Sereyvath, an economics researcher at the Royal Academy of Cambodia and director of its China Studies Centre, said that when Cambodia was grey listed, it created reluctance for foreign investors to invest here because they feared trade restrictions and a difficult process of for financial transactions.

“I believe that Cambodia’s removal from the grey list will make it more attractive to foreign investors who wish to invest in Cambodia,” he said.

According to the economists and financial experts, when Cambodia was on the money laundering grey list, the international banks and foreign investors were reluctant to carry out financial transactions here or make investments in Cambodia due to concerns about problems and unforeseen risks.

During the meeting with the delegation of the US-ASEAN Business Council on February 28, Interior Minister Sar Kheng, who is chairman of the National Coordination Committee on Anti-Money Laundering, said that FATF’s decision in removing Cambodia from the grey list of money laundering countries was an achievement that would contribute in building investor confidence in the investment climate as well as business in Cambodia.

“We are very grateful to the FATF, including the United States, as a member of this organisation that gave its support to the Cambodian government’s years of efforts to remove Cambodia from the grey list,” he said.

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