Sihanoukville has undergone a massive transformation in the last few years. Carved out from a jungle in the 1950s, the city has emerged as one of the most important urban and trade centers in the Kingdom of Cambodia.
Development in Sihanoukville is evident in massive residential development projects and the many high-rise buildings that dot the once empty city skyline. But development also comes at a price. Environmental damage and pollution are its most obvious downsides, and Sihanoukville is no exemption.
To learn more about the transformation of Sihanoukville and its impact, Realestate.com.kh talked to the Australian couple, Mark and Kerry Morton. The Mortons are managing Purely Projects, a real estate consultancy firm based in Sihanoukville. The following is excerpts from their interviews, which have been lightly edited for length and clarity.
REAKH: Please, could you tell me briefly about your company(ies), your background in general and how long you have lived in Sihanoukville for?
Purely Projects: Purely Projects is a boutique real estate consultancy firm. We have been consulting in South East Asia for the last five years, for the last 12 months, we have been based in Sihanoukville, Cambodia.
We provide consultancy services to many sectors of the industry, specializing in retail, commercial, hotel and residential development and management.
Kerry is Managing Director of Purely Projects. She has over 20 years’ experience in the retail environment both in Australia and South-East Asia. Kerry specializes in Retail Development, Concept, Tenancy mix and design, lease management and marketing.
Mark Morton is the firm’s Executive Director. He has specialized in the asset management of many leading developments in Australia, Cambodia, Laos and Vietnam.
REAKH: Could you elaborate on any changes you have seen in terms of the real estate market in the time you have lived in Sihanoukville?
Purely Projects: The changes in Sihanoukville and its outlying areas over the last 12 months has been incredible. This is not restricted just to Chinese investment in casinos. For example, in Otres Village, sixteen new hotels and bungalow resorts have either been completed or are under construction within a 1-kilometre radius of the Village center.
The majority of these are Cambodian owned. Interestingly, a high percentage of these developments are “For Sale or Rent” on speculation. All have signage in Chinese or Khmer, few are in English. Let’s not forget the major mixed-use developments such as D’Seaview, Blue Bay and Seagate to name a few are well underway in Sihanoukville.
REAKH: It is undisputed the Chinese investment is major in Sihanoukville, what effect has this had on you as both an individual person (quality of life) and a business owner?
Purely Projects: We live adjacent to the Chinatown development. This is a massive project covering nearly 100 hectares. In truth there has been quite an impact on the lifestyle of the local community. The high number of truck movements daily through Otres Village is creating issues with the road condition and the impact of dust and noise on the residents and business in the area.
As a consultant, it is difficult to create a dialogue with the developers, due to the lack of signage on the projects or contact details to establish the identity of the development company. Those firms with Chinese speakers have a great opportunity to establish a positive relationship.
REAKH: What are your thoughts regarding Chinese investment in Sihanoukville in general? Do you believe this is positive/negative and why?
Purely Projects: Any form of investment, whether foreign or local, creates an impact on the community. Whether large or small, investment will influence both lifestyle and the economy.
China and Japan have contributed billions of dollars to Cambodian infrastructure, as has Australia, the UK and the USA. The positives of the Chinese investment are the accompanying improvement to infrastructure, whether roads, water reticulation or electricity.
REAKH: What do you think the impact has been on the local Khmer's that live in Sihanoukville?
Purely Projects: There is no doubt there has been an impact on local Khmer lives, again some positive and some negative. Those Khmer landholders that possessed a hard title are selling for prices they would never have hoped to achieve would they have marketed their property to local investors.
Within Sihanoukville city limits, there has been anecdotal evidence of tenants, both expat and Khmers not having their leases renewed, or the lease amount is beyond their individual budgets due to the upward pressure on prices created by the Chinese interest.
REAKH: Do you still believe that Sihanoukville offers viable opportunities in real estate and business for both expatriates/local Khmers?
Purely Projects: There are opportunities available in both real estate and business if the expat investor applies and follows a well thought out business plan.
At present, there is one “major” supermarket (with limited offerings) and a handful of mini marts. The first major retail player to enter in Sihanoukville will be enjoying a booming environment with minimal competition.
A number of long standing Khmer businesses in the hospitality sector in Otres Village have expanded their operations.
REAKH: Do you believe there is a shortage of available housing in Sihanoukville?
Purely Projects: The majority of rentals are studios marketed as one bedroom. The nearest alternatives are three to four-bedroom villas. There is a shortage of mid-size housing, namely two separate bedrooms, kitchen, etc. favored by the expats.
If purchasing, there are a number of quality developments in Sihanoukville. These range from High End to Mid-range.
REAKH: From what I have seen on social media, there is a major anti-Chinese sentiment, do you think that this sentiment would be the same if there was overwhelming investment from say: UK or USA or a western nation? Or do you believe there is a racial element involved?
Purely Projects: When large scale development occurs, there is an impact on the lifestyle and the environment. This is a major source of discussion on social media, not only in Cambodia, but across the globe.
When one particular nation, whether US, Russia, UK or China or another nationality is the dominate investor in a region, the community can feel their former lifestyle, “ownership” and nationality is threatened.
REAKH: In absence of the influx of Chinese investment in Sihanoukville, what do you think the province would look like today?
Purely Projects: Sihanoukville beaches and beauty, combined with the SSEZ and the port, would continue to attract foreign investment, mainly targeting hotel and resort beachside lots, albeit perhaps at a slower pace, without Chinese investors.
REAKH: What is your personal outlook on the real estate market, and the future of Sihanoukville in the coming years?
Purely Projects: It is difficult to forecast the outlook for both the market and Sihanoukville in the future, however I would venture that eventually land prices and rents will stabilize, as they did in Australia after the Japanese investment boom of the 1980's. In addition to this one can expect to see better roads, infrastructure and a healthier, cleaner environment for Cambodians and tourists alike, no matter where they come from.