From October 19-20, Realestate.com.kh (REAKH) successfully held its Property, Business & Lifestyle Expo 2024 at the Premier Centre Sen Sok in Phnom Penh, featuring more than 50 exhibitors and attracting over 4,000 attendees, resulting in USD 6 million in total sales.
The Cambodian Investment Forum was also held on the first day of the expo, which saw 12 sessions led by industry experts offering valuable insights into a range of different subjects relevant to the real estate industry. We detail some of the forum's main highlights.
This year’s Property, Business & Lifestyle Expo spotlighted some of Cambodia’s leading property developments including Picasso Sky Gemme, Diamond Bay Garden, Odom, Rose Apple Square, Borey Chankiri, Bay of Lights, Times Square 8, and more.
Property transactions surpassed USD 6 million over the two-day event, with developers like Megakim World Corporation, OCIC, and Le Conde seeing multiple deals closed on-site.
In addition to property-focused booths, other companies showcasing their services at the expo included several banks (such as ABA, Canadia Bank, Maybank, Bank of China, Shinhan Bank), electronics companies (Mitsubishi, BMSC), Nham24, Intercare Hospital, Liberty Carz, Macy Visa-Immigration, Venly Home, amongst others.
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Main Highlights From The Cambodian Investment Forum
REAKH’s ‘Connect’ CRM Platform
Tom O’Sullivan, Director and CEO of REAKH, kicked off the forum with an introduction and overview of REAKH’s new online customer relationship management (CRM) platform called ‘Connect’, which also recently saw the launch of its offline counterpart, called the ‘Connect Centre’.
O’Sullivan shared REAKH’s aspirations to transform the real estate industry into a more connected, efficient, and collaborative space with ‘Connect’, describing it as “empowering agents, developers and the market through proptech (property technology), like the Nham24 for real estate”.
Similar to how the Nham24 super-app revolutionised food delivery in Cambodia, O’Sullivan analogised that under Connect, the property agents would be like the delivery riders, and the houses would be like the restaurants.
Some of the highlights from the platform he mentioned were its state of the art listing management system, the use of AI to enhance listings, co-broking and property matching, as well as providing agents access to online and offline training opportunities.
Vatey Mom, Sales Director & General Manager at REAKH, told B2B Cambodia that REAKH will be publicly launching the Connect platform soon, following a successful internal launch.
“With ‘Connect’, every single dot in the real estate industry will be connected, from property transactions, searching, buying, closing, financials, insurance and more,” she said. “I'm confident that the Connect programs that we are going to launch will act as a central mechanism to bring the real estate industry in Cambodia forward, fostering a more sustainable market.”
Watch a snippet of our interview with Vatey Mom, Sales Director & General Manager at REAKH:
Guide To Trusts In Cambodia – Commercial Trusts And Property Trusts
Two speakers at the forum – Hay Sovanna, Acting Director of the Trust Registration Department under the Trust Regulator; and Paul Yang, Director of SM Global Trust – delivered presentations related to the trust market in Cambodia, with a focus on raising more awareness on how trusts function, as well as on their main benefits over other traditional methods of investment.
Sovanna presented on the general process of establishing a trust and also shared some of the latest statistics on the trust market. Since the regulator was established in 2021, the trust market in Cambodia has increased from a small 17 cases to a total of 1,042 cases as of October 2024.
These 1,042 cases are worth a total amount of USD 1.68 billion, of which the vast majority of cases (1,021) concern commercial trusts (accounting for USD 1.163 billion in value). Furthermore, real estate and property related trusts account for 62 per cent of all commercial trusts, which is equal to a value of USD 72.4 million.
“It's very easy to see why commercial trusts are the most popular, because to create a commercial trust is to generate profits… and within commercial trusts, real estate trusts, are the dominant one because people see the potential of the real estate market in Cambodia,” Sovanna told B2B Cambodia.
Trusts Allow Foreigners To Invest In Land In Cambodia
Importantly, trusts offer foreigners a safe and secure method of investing in real estate, as by law (Article 44 of the Constitution), foreigners do not have the right to own land in Cambodia. Foreign investors have previously had to rely on the nominee structure, putting down the name of a Cambodian partner on the hard title of a land or property, which comes with a lot of risk as the person on the hard title holds full legal claim over that investment.
Trusts, including property trusts, can last up to 99 years, said Sovanna, further detailing how trust ownership is secured and verified through a unique trust ID, trust code and authentic certificate issued by the regulator.
Speaking further on the greater level of investment security trusts afford, Paul Yang, Director of SM Global Trust, told B2B Cambodia:
Trusts are very secure, because the trust regulator, who manages and controls the trust system, is a government party under the Ministry of Economic and Finance, so they guarantee that investment assets held under a trust are secured… Also when creating a trust, it will be secured by a third party (trustee) as well… so property assets are secured under a trust in a way that no one can touch or interrupt those assets.
Giving advice to foreign investors, Yang stressed the importance of receiving a good consultation on the investment and trust establishment process.
“There are a lot of operator companies, but it is really important that the operator company has a good history and which gives the correct valuation. We (SM Global Trust) are registered under the trust regulator and we act as a trust operator, while also providing other operator services for properties, inventory, and all kinds of valuable assets,” he offered.
Future Outlook Of The Trust Market
Sovanna shared some of the main plans the regulator has for the future of the trust market, which includes the launch of a new trust registration system and hosting a Trust Forum 2024 at the end of October, which will be presided over by H.E. Aun Pornmoniroth, Minister of Economy and Finance and the Chairman of the Non-Bank Financial Services Authority.
“We hope that we will have a digitalised platform for all the trust operators to make sure that trust services can be provided very smoothly, fast and with more convenience to all operators in the trust sector,” Sovanna added.
When [foreign investors] can see their investments are secure and safe, they will promote from one person to another saying that investment in Cambodia is quite safe through the trust mechanism, so I believe more capital flow will be coming into Cambodia.
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Unique Features Of Cambodia’s Real Estate Market 2024
Kinkesa Kim, Managing Director at CBRE Cambodia, affirmed that by and large, Cambodia’s real estate market is experiencing the same cycles observed in other countries in the region and the world. However, she also highlighted a few unique characteristics that make Cambodia’s real estate market stand out, with both positive and negative implications.
“We have quite a low barrier for entry, especially in the development market, making it easy for new real estate developers to come in,” Kinkesa told B2B Cambodia.
Her presentation also detailed how certain rules and regulations, especially regarding urban planning, are still quite loosely defined, making it easier and providing more flexibility to developers.
“But this also probably works against the market, in a way, because it's too easy to enter, so the competition can be difficult to manage for people who have already entered,” she added.
Other than that, we also are a very young market. Fifty-five per cent of our population is under the age of 35, so there's a lot of areas or stages of development that we can probably skip through. For example, within the digital realm, our population has a very quick absorption of technology. We have a very high mobile penetration rate as well, so it is a new trend for developers, even if they are experienced in the market, to have to keep up with the new generation of demand. The old playbook, or old experience, might not work the same way under this new wave of demand.
Other unique aspects of the market she mentioned are:
- Lack of a work-from-home (WFH) culture in Cambodia – while in countries like Singapore, the office utilisation rate hovers around 50 per cent, in Cambodia, most businesses are back to operating face-to-face and in offices.
- Cambodia has many small real estate developers, meaning decision making in the market is quite dispersed – with a lot of people making decision on developments, this is sometimes not necessarily the best for a development
Watch a snippet of our interview with Kinkesa Kim, Managing Director at CBRE Cambodia:
Where Do The Opportunities In Cambodia’s Real Estate Market Lie?
Kinkesa outlined a number of areas in the real estate market, as well as some of the more ‘untapped’ segments of the broader economy connected to real estate, that offer promising opportunities for foreign investors, including:
- Affordability of Phnom Penh’s residential sector compared to other cities in the region – “Where else in Southeast Asia can you find property that is priced, in most cases, under USD 2,000 per square metre, and in some spaces, even under USD 1,500 per square metre within five kilometres of the CBD?” Kinkesa asked, further highlighting the convenience of travel, free-hold ownership opportunities and flexible payment terms that developers offer foreigners as well.
- Development of special economic zones (SEZs) – Kinkesa shared that CBRE Cambodia is currently dealing with several large-scale inquiries into industrial spaces for SEZs, which she said is an encouraging sign for the Cambodian market as SEZs offer special incentives that can attract more investment into the country.
- Purpose-built student accommodation and senior living – Both types of accommodation are currently rare asset classes in Cambodia, despite the large school-going youth population, and despite neighbouring countries like Vietnam and Thailand being well into the development of senior living options, having identified an opportunity in this segment.
- Data centres – Kinkesa said that this is a growing area that CBRE across Southeast Asia has been focusing on because of the high demand, including in Cambodia, which is seeing its financial and even government sectors make the shift to digital. Phnom Penh, currently only has about four or five professional data centres, so not a lot of big players are present in this area of the market yet.
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