Cambodian property proves popular with Chinese buyers as mainland investment drives economic growth

By Zheng Yangpeng / South China Morning Post | June 7, 2019 12:04 PM SGT
Cambodia's housing market is on a roll.
A thriving job market as a result of the booming economy has boosted demand for housing. This has pushed rental yields to 8 to 10 per cent, and asset appreciation to 15 per cent per year, making the Southeast Asian nation's property sector an ideal bet for Chinese investors seeking overseas assets as a hedge against yuan devaluation, say market observers.
The country's gross domestic product grew 7.5 per cent and exports surged 17.6 per cent last year, thanks to massive inflow of Chinese investment in infrastructure projects on the back of the Belt and Road Initiative, and factories relocating from the mainland to take advantage of the cheap labour and dodge punitive tariffs imposed by Washington in the ongoing US-China trade war.
"Much of the growth in Cambodian exports is actually due to Chinese firms expanding or relocating to Cambodia," said Carrie Law, chief executive of Juwai, which helps Chinese investors buy overseas properties, adding that as more Chinese nationals move to Cambodia to work, they will need a place to live and often have a higher housing budget than the typical local.
Cambodian garment workers at a factory in Phnom Penh. Many companies are relocating their factories to the Southeast Asian country from the mainland because of the trade war. Photo: Reuters
She said that Cambodia's popularity among Chinese investors looking to buy overseas property had jumped to 12th place this year, from 17th in 2018.
Two million Chinese visited the country last year, representing the largest overseas group, or 32.6 per cent of its international arrivals. Nearly a quarter of them came for business, according to the World Bank.
Thida Ann, director of CBRE Cambodia, said consistently high GDP growth and tax benefits for industrial investors were the main reasons for the inflow of foreign investment into the property sector.
"They are driven by expectations of high-yield returns on their property investment and it is not intended for their own use," she said.
Cambodia approved over US$2.7 billion worth of real estate projects during the first four months of 2019, a 67.3 per cent increase from a year earlier, according to a Xinhua report on Monday, which quoted local media.
According to data provided by Uoolu, nearly 84 per cent...