Despite the impact of COVID-19 on Southeast Asian economies, Cambodia remains an appealing investment option for real estate investors because of its unique location at the crossroads of multiple trends.
Cambodia has witnessed substantial change since the Khmer Rouge collapsed 20 years ago. The country that was previously renowned for severe poverty and persistent civil unrest has outperformed expectations, reaching lower-middle-income status by 2015 and aiming for upper-middle-income status by the end of the decade.
No Recession For More Than 20 Years
Cambodia is an essential member of ASEAN and a critical entry point for China’s Belt and Road Initiative. At the same time, the country has also seen an increase in foreign investment from a variety of sources in recent years.
It looks to be benefiting recently from a reshoring push as corporations seek to move or grow their operations in Southeast Asia. Cambodia not only provides inexpensive labor, but the youthful vigor of one of the world’s youngest countries holds potential for long-term industrial and commercial ventures. The Cambodian government has at the same time cultivating a stable environment for business goals in the long run.
As a result, there has been an inflow of global corporations establishing themselves in the country. It has contributed to a boom in the country’s construction sector, which previously depended solely on the tourist industry’s steady expansion. At the same time, as a result of China’s strong economic recovery, Chinese visitors, many of whom are also prospective property owners, are gradually returning to Sihanoukville and Phnom Penh.
A number of conglomerates, like Prince Holding Group, have seized the chance. The Group’s chairman, Neak Oknha Chen Zhi, has contributed to Cambodia’s economic possibilities by launching or supporting more than 80 companies, which have added to the lively corporate scene.
Not only have Cambodia Chen Zhi and Prince Group member firms given investment, but they have also brought in foreign talent to improve Cambodians’ standard of life and create a key link that connects Cambodia to the international community.
The bulk of the Kingdom’s real estate expansion in recent times has been propelled by Chinese investment. According to a Bloomberg article, China’s interest in Cambodian real estate investment has consistently expanded year after year – in 2018, Chinese corporations invested $7 billion to assist develop motorways and real estate projects. Construction operations behind the boom in Cambodian property development, on the other hand, typically include hundreds of businesses from many nations.
Cambodian property is likely to increase as an investment offer in the next years, owing to robust economic growth and an appealing investment climate. Because Cambodia has one of the world’s fastest-growing economies – the Cambodian economy has grown more than 7% on average for more than a decade, according to the World Bank – a thriving job market has emerged, assisting the country in diversifying its income base away from tourism, garment exports, and agriculture.
Cambodians’ Increased Need For Homes of Their Own
Because of its strategic location in Southeast Asia, sharing borders with Thailand, Laos, and Vietnam, as well as the Gulf of Thailand to the southwest, Cambodia has become a favored low-cost manufacturing alternative for companies with the intention to export finished goods to developed markets.
Based on the data from The Observatory of Economic Complexity, foreign direct investments going into Cambodia have grown 800% over a decade since 2008.
Manufacturing in particular has expanded, thanks in part to reduced labour costs compared to China. The Asian Development Bank (ADB) stated that the industry has grown from a small beginning to currently accounting for more than 30% of the total GDP.
Furthermore, the ADB predicts that the economy would increase by 4% this year and 5.5% the next year as a result of economic recovery in major trading partners. The country appears to be recovering from the epidemic faster than the rest of the area.
In recent publications, other organizations such as the International Monetary Fund and the World Bank have supported the ADB’s judgment. It’s also worth mentioning that a successful vaccination program has lifted spirits locally, with Cambodia becoming only the second country in the region to secure the first shot for more than 10% of the population.
Clearly, Cambodian real estate is projected to garner more attention in the next years, and this tendency is especially visible when compared to its equivalent in the Mekong Delta.
Cambodian property is not only cheaper, but it also offers considerably greater value than comparable properties and has a broad spectrum of possible buyers and investors.
The present decade might be a watershed moment in Cambodian history, as the country gains international recognition as one of the most promising investments and employment destinations in the world.