Why investing in Sihanoukville is ill-advised (or not)
Why investing in Sihanoukville is ill-advised (or not)
Another investor is ready to take its chances on the growing tourist hub that is Sihanoukville
The value proposition of taking a dip at one of Cambodia’s beaches is seemingly bigger than ever.
International investment company KC JSM Services Ltd will be ploughing USD119 million into a 60,000-square-metre resort project along White Horse Beach in the city of Sihanoukville.
Construction will begin in October and the target date of completion is within two years.
KC JSM’s announcement comes just over a month after the launch of the Cambodia Golden Silver Gulf Resort, a USD3-billion project by a Chinese consortium in the province of Sihanoukville.
Investors have renewed interest in the province as tourists continue to come in droves to Cambodia’s southern coast. According to provincial government estimates, more than 1.3 million tourists visited Sihanoukville in the first five months of 2016 alone, a 16 percent increase from 2015.
In addition, the success of recent projects like HLH Group’s D’Seaview offers an emboldening tale to many investors. The property firm has claimed to have sold more than 51 percent of its D’Seaview units.
More: 12 tips for investing in Cambodia property
Investors may be coming in to Sihanoukville with unrealistic expectations, however. According to Den Sakal, a Sihanoukville-based realtor, luxury property investments in the province in 2015 has not translated to demand this year, and oversupply may be in the offing.
“Some major development projects in Sihanoukville have become ghost towns already, and there is a risk that others will too,” he said.
In Phnom Penh, there are signs of a supply glut as well. Around 110 condominium projects, representing 36,742 units, were completed in the first half of the year in the Cambodian capital, compared with sales of 13,730 units over the same period, according to Century 21 Cambodia.
“There are investment opportunities in the market. Though there is an oversupply, sales can increase if we think strategically,” Century 21 Cambodia chairman Kuy Vat told Khmer Times.
“I do not have clear information about the oversupply of units. What I can say is that in the next three years we have to strive very hard to attract more investors,” he said.
Read next: Could Cambodia’s southern coast be Asia’s next resort hot spot?
Source: Property Report