Foreign investment in Cambodia has risen by 800% over the past decade, according to new data. Multinationals like Starbucks, Samsung Electronics, Toyota Motors, and Nike already have a foothold in this undervalued Asian economy, setting up shop in the lively capital, Phnom Penh.
The economy’s full potential has remained unnoticed by many for years. Even now, it is far from saturated by foreign capital. According to Simon Griffiths, 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.”
Griffiths has high hopes for foreign investment through 2017: “If Phnom Penh is a cup, then that cup is brimming with development,” he reckoned in January this year. For 2017, the expert anticipates foreign investment will move towards entertainment, hotels, condo-hotels, and retail rather than the residential sector as in 2015 and 2016.
From a geographical perspective, Griffiths expects the next real estate boom to be in Sihanoukville, or ‘Kampong Som’, a coastal city in Cambodia which is known for its beaches and the rapid growth in tourism numbers. While Phnom Penh and Sihanoukville set to continue as 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, attributable to urbanisation and growth in this Asian frontier market.
“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,” according to 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.