With the ASEAN Economic Community (AEC) now in full effect, Cambodia is hoping its economy can catch up with Thailand and Vietnam. Government officials believe the country’s growing real estate market can help close the gap between itself and its more established neighbors.
“With sustained gross domestic product growth, attractive returns and the widespread adoption of the US dollar, Cambodia is well-placed to attract continued real estate investment from the wider region over the course of 2016,” CBRE Cambodia manager Chris Hobden told the Nikkei Asian Review.
According to the World Bank, Cambodia’s economy grew by 7.5 percent per year on average between 2005 and 2014. And the ever-evolving skyline of Phnom Penh, the country’s capital, is one of the most visible signs of this growth. CBRE is predicting that Phnom Penh’s condo supply will rise by a staggering 794 percent in 2018.
However, experts are not so certain that this growth is positive for the country. Stephen Higgins, a principal at investment and corporate advisory firm Mekong Strategic Partners, expressed reservations about the building of skyscrapers. He claimed they are a symbol of the government’s flair for “vanity projects” with no stringent market research.
During a recent real estate conference in Phnom Penh, Cambodian Valuers and Estate Agents Association president Kim Heang told property developers to build houses for lower-income residents as there seems to be an oversupply of condos and villas for high-spending Cambodians.
“Seventy percent of our people are under 35 years old, and there are only very few who have spending power,” he said. “Who else is left to buy all the high-priced homes?”
The retail sector in Cambodia could possibly be the country’s shining star in regards to real estate. CBRE expects retail supply in Phnom Penh to significantly grow over the next two years with several international complexes either finished or under construction.
Malaysia-based retail chain Parkson is currently developing two shopping malls in the capital city while Japanese retail group Aeon built Cambodia’s largest mall in Phnom Penh in 2014 and is considering developing further projects.
This story was originally published on property-report.com and is reproduced as part of an editorial partnership between DDproperty.com and Property Report.
