Buoyed by a strong economy and massive infusion of cash from abroad, the Cambodian real estate industry, in the last half-decade, is enjoying some of its best years.
Once-empty skylines in Phnom Penh, Siem Reap, Sihanoukville, and other urban areas are now filled with high-rises that rival those seen in other major cities in Southeast Asia. Even the once-sleepy provinces of Battambang, Kep, Kampot, and Koh Kong have received their own share of property investors and real estate development.
The media is filled with stories on how foreign investors, attracted by the business potential and affordable land and other real properties, are pouring capital into Cambodia, with most of this funding going to real estate.
But a lesser known, but equally significant trend is also flourishing in the background: Cambodians investing in real properties in the other countries.
After several decades of tumult, Cambodia transformed itself to become one of the fastest-growing economies in Southeast Asia. In the last decade, the Cambodian economy has grown by an average of 7 percent. In the process, many locals also became wealthy. Many of these newly-wealthy personalities and families are in the real estate business.
Between 2005 and 2015, the number of Cambodians with net assets approaching US$30 million has increased by more than 170 percent, according to a Knight Frank study.
Nicholas Holt, Head of Research at Knight Frank Asia Pacific, explained to the local media that these super rich people are products of Cambodia’s strong economic growth.
While most and the leading players in the nation’s real estate are investing locally, there are some who are opting to invest abroad for a variety of reasons.
The most popular destinations of outbound Cambodian property investments include Australia, New Zealand, and neighboring Thailand. Other wealthy Cambodians have invested in property in the United States, Malaysia, Singapore, and Cyprus.
Some of these countries actively court wealthy Cambodians to invest in their own territories. For the first time, three years ago, a Malaysian-based developer, GuocoLand, pre-sold residential units to Cambodian investors.
The prospect of higher return, anxieties regarding political and economic stability, and strong competition are the main forces behind this capital flight.
Many of these people are also lured by the prospect of gaining another citizenship or permanent residency, which afford them lots of benefits, including the ability to travel to most countries in the world visa-free and have their children educated in top schools abroad, which are hard to come by with only a Cambodian passport in tow.
The latest (2018) Henley Passport Index puts the Cambodian passport in 86th place, with visa-free access to only 49 countries.
A lawyer from Sokha Law Office earlier told the media that Australia has proven to be a popular destination for Cambodian developers and their money because of the quality of life and the many benefits it provides.
“It has always been viewed as a safe haven with a strong and established legal structure, asset protection and multi-cultural society. “Cambodian buyers are purchasing properties in Australia so that it can benefit their kids to stay during the time of their education, or doing business,” said Chan Mlop.
The cities of Melbourne, Sydney, and lately, Brisbane, are where most of the Cambodian property investments are located.
The same thing is said of New Zealand, of which the city of Auckland has proven to be the top drawer for Cambodian investors. For its part, Thailand is aided by the rich variety of properties on offer and relatively cheap prices.
Meanwhile, Cyprus is popular because a minimum property investment of 2 million Euro (US$2.3 million) provides a straightforward path to EU Citizenship.
While it was a long and complicated task before, the process of investing in other countries, especially for permanent residency and citizenship purposes, has become simpler and easier, thanks to an array of local and international law offices and consultancy firms that specialize in providing such services.