Preah Sihanouk real estate market braces for reopening scheme

Content image - Phnom Penh Post
Prime Sihanoukville real estate currently goes for around $4,000-$4,500 per sqm, down from $5,500-$6,000 at its pre-Covid heights, and as low as $800-$1,200 in residential areas. Yousos Apdoulrashim

The outset of Cambodia’s economic reopening process, which notably includes plans to roll out the welcome mat for international travellers who are fully jabbed against Covid-19, bears positive implications for a gradual recovery in Preah Sihanouk province’s real estate market, experts have said.

The Ministry of Tourism on October 26 announced plans to reopen to fully-jabbed international tourists from November 30 following a sustained optimistic decline in Covid-19 metrics.

The ministry has selected Preah Sihanouk – including Koh Rong island – and the Dara Sakor area of neighbouring Koh Kong province for the first phase of the scheme.

In addition, the Ministry of Economy and Finance last month selected China’s Urban Planning Design Institute of Shenzhen (UPDIS) of China to prepare a master plan for the development and transformation of Preah Sihanouk into a “Model Multi-Purpose Special Economic Zone”, Southeast Asia’s next logistics and resort hub and innovation centre.

The master plan will serve as a key roadmap to develop the provincial capital Sihanoukville into a “second Shenzhen city”, in line with the implementation of the Industrial Development Policy 2015-2025.

Anticipated to take around 18 months, development will be divided into four major phases – Phase 1: Data Collection and Site Survey; Phase 2: Assessment and Proposal; Phase 3: Preparation of Master Plan; and Phase 4: Completion of the Master Plan Project.

Im Seng Hour, branch manager of Century 21 Zillion Holding in the provincial capital Sihanoukville, told The Post on November 10 that every bit of new information regarding reopening plans has boosted Preah Sihanouk’s property market to some extent.

The firm has seen an uptick of people looking to buy or rent business properties, with plans to start up soon, he said.

However, there is no boom in the market, he emphasised, saying that activity was mostly limited to locals buying and selling properties.

“Recently, I have noticed that some local investors have started to buy buildings that are under construction – or have had construction suspended – for resale or to invest on their own, although prices are not at 2018 levels, back when the rates in Sihanoukville had risen as high as in Phnom Penh,” he said.

According to Seng Hour, the best real estate in Sihanoukville currently costs around $4,000-$4,500 per sqm, down from $5,500-$6,000 at their height, and as low as $800-$1,200 in residential areas.

One of the obstacles that has kept the real estate market in Preah Sihanouk from gaining strong momentum is an increase in international travel prices, especially from China, a country with a multitude of potential investors that accounts for the largest share of investors in the province, he said.

“If airfare falls to between $400-$500, as it’d been before the Covid-19 crisis, both the number of investors and tourists, as well as property prices, will rise even more,” he added.

Lucky Realty CEO Dith Channa said the real estate market in Preah Sihanouk has been largely muted due to the Covid-19 crisis, and was now slowly beginning to recover, mostly driven by locals.

However, a meaningful recovery will take time, he said, adding that the process would be accelerated when travel rules for foreign investors are eased and quarantine requirements are lifted.

He underscored that a lot of adequate infrastructure has been developed in Preah Sihanouk in anticipation of the return of foreign nationals, which he said account for the majority of real estate investment in the province.

“I know that the real estate market in Preah Sihanouk has recovered a bit now compared to half a year ago,” Channa said.