B2B Cambodia's ‘Real Estate Update’ features in-depth conversations on Cambodia's developing real estate industry with guest speakers from the local property market.
For this segment's inaugural episode, Tom O'Sullivan, CEO of Realestate.com.kh and Director at B2B Cambodia, sat down with William Naramore, Owner and CEO of Borey Williams Co., Ltd., to discuss his experience as a foreign borey developer in Cambodia.
How Did Borey Williams Get Started In Cambodia?
Naramore shares that Borey Williams started very small, initially just selling houses on individual land lots then evolving into a full borey housing development project that continued to expand. He explained that the main focus of Borey Williams is single family villas built with Western concept designs, though there are some shophouses and townhomes included in each project as well. The first project was launched in 2019, and now in 2024, Naramore is working on his third development project.
“We wanted to prove a concept, so we started with land lots, and we sold very well,” said Naramore. “Then we [decided to] convert the remaining lots to housing development, and started with 10-12 homes… we sold out very quickly, so in about a month or so, it was like, oh, we need more homes to sell, so let's buy some more adjacent land, let's expand. We expanded, sold, expanded again, sold and we repeated that process about 10 times in project number one, until we couldn't really expand anymore.”
Acquiring Land For Borey Housing Development
Naramore said he would buy land, particularly agricultural land, from people living in the villages where the property development was planned, then his team would convert it into residential land, re-zone and merge the land under one big land title, and then subdivide it according to the borey development's master plan.
“Some challenges you face are sometimes you'll pin a location with GPS – a representative from the Ministry of Land Management will come and pin it – but it may be not exact with someone else's pin…,” he said.
This would then result in some disputes with neighbouring land owners about the land boundaries and where one piece of land starts and ends.
“[We were] working with 50, 60, 70, different land sellers all at the same time. But there's usually a go between, an agent or representative that typically lives in the village or has some of the land that you're trying to acquire. They can kind of act as a liaison to lock in prices, terms, timelines and down payments. With 80 or however many different land sellers, there can all be different pricing, but [with someone acting as a go between] you can end up with an average price that you're trying to get," he added about the acquisition process.
Summary Of Borey Williams Developments
Project One of Borey Williams is close to 400 homes and 20 hectares of land, with a market located in the development area, as well as other facilities like a swimming pool and tennis courts. Project One also features a total of four home designs/models.
Project Two has close to 300 properties on 20 hectares of land, and also includes a market that is currently under construction called Williams Plaza, which will be a boutique community shopping mall, similar to TK Avenue. Project Two also has an international school located within its premises, through a partnership with Paññāsāstra International School. Land within the project is currently also allocated for a clinic, parks, swimming pools and other facilities.
Project Three was acquired in 2023 and is still in early stages of infrastructure development, such as in building and installing the septic and drainage systems, utilities, roads, sales office, model home, etc.
Lifestyle Development In Borey Projects In Cambodia
Naramore stressed the importance of accounting for lifestyle and including varied facilities within housing development projects to make them more attractive to home buyers.
“The marketplace is at the centre of Cambodian culture, so it was a good move for us to start a market [in our development project], and it was an underserved area as well,” he said.
Having extra facilities like a market, pool, playground, and more Naramore said helps to make home buyers see the development as “a great place to live, not just a great place to sleep and hurry off to work in the morning”.
Our mission is to build homes that customers love, and so [this is a huge part of the equation] that's in the project. It's not just a home, but it's where you live.
Watch Part 2 of B2B Cambodia's Interview with William Naramore:
Comparing Property Development In Cambodia To Other Markets
One of the biggest differences Naramore sees in Cambodia's property development market compared to his home country, the United States, for instance, is the distinct lack of ‘master developers’ who buy large amounts of land and build the infrastructure before selling them to businesses doing housing development projects.
"Some of our partners in the US, they've asked me why do we buy raw land"?… It's very uncommon for a lot of American builders," he said. “Often you have a master developer that will buy large swaths of land, do a planned development… and do all the infrastructure, [allocating where there will be] parks, a landfill, drainage, roads, power utilities, etc. They do all the subdivision work, and they sell finished lots to builders.”
“So someone like me in the States would go to a master developer or a building complex that's pre-planned, and say I want to buy 50 lots, which the master developer would then sell [to me], and sell another 100 to another developer, and [so on]. The developers will then form a collaboration and build right next to each other, under different brands, but still with cohesion, and they look well together. It doesn't look like a weird hodgepodge of a factory next to housing, [for example]. But [this concept] is very rare here… I would like to see this more in Cambodia, I think it would benefit the market,” he added.
Difficulties Faced In Cambodia's Property Market
Reflecting on the overall state of the market in 2023, Naramore also noted the difficulty faced by most property developers and buyers due to rate hikes, including an increase in fixed deposit rates at banks to maintain deposit holders.
“There were some bank problems [in the US and worldwide], some pretty big names out there were involved, so I think a lot of local banks here jumped on the fear bandwagon… coupled with the [U.S. Federal Reserve] raising rates, I think it was the sharpest consecutive rate hikes in the states… and [since Cambodia has a] a dollarized economy… banks here, they're using US dollars as their source of capital… so they all raised their rates in tandem with each overnight,” he explained.
Last year, it was a total switch, among a large number of banks, to fixed deposit, doing whatever it takes to ramp up the rates for fixed deposit to keep their deposit holders. I'm not a banker, but maybe behind the scenes there was nervousness about a run on the bank…
He described this as having a huge impact on buying power, which negatively impacted sales.
“Customers' buying power was diminished, so if a customer could afford a USD 1,000 a month payment to buy a USD 100,000 house, because rates went up, they could still afford to spend USD 1,000 a month, but they can't buy the same house, not the house they wanted” said Naramore.
There was a mentality of 'let's wait and see', ‘maybe this thing will blow over’, 'let's see what happens', kind of thing. And I think that really negatively affected home sales for developers around the country who were anticipating or planning for things to continue on going from a white hot market [from a few years prior], and even throughout COVID when developers were still selling homes.
Quality Control In Cambodia's Property Market – Buying From Reputable Builders
Naramore wanted to highlight one particular lacking aspect of regulations in Cambodia's real estate market, which is quality control.
“In the States, once you frame in a house, you can't move on to the next step until you have it inspected and signed off. Cambodia is definitely not there yet. Eventually, it will be, undoubtedly it will be, but when that will happen, I don't know,” he said.
Right now, especially for consumers and buyers, they need to know that the quality control is on the builder, so that's why it's so important to buy from a reputable builder who's not going to cut corners. I would say it takes a lifetime to build reputation and a moment to destroy it, so anyone who is cutting corners and not building with a reputation, sooner or later, there won't be a business.
Advice For Property Developers In Cambodia
Sharing his advice for other property developers in Cambodia, Naramore emphasised that there are lots of opportunity everywhere, but he recommends in the early stages to be open to more collaborative situations.
“If you can find a place that has finished lots with hard title already subdivided, that can mean a lot of steps just out of the way, so you don't have to buy raw land, rezone it, subdivide it, you don't have to have headaches with neighbours demarcating the border, or during the landfill stage," he said.
He also advised people who are just entering the property market to be very clear about their strategy and whether they want to be a home builder or master developer that buys land and does everything A to Z.
Furthermore, Naramore suggested that some aspects of sales should remain internal and not outsourced to ensure that a housing development project has cohesive marketing.
“We always think about sales at the forefront, whether it's a match for customers and how we're going to communicate the product to our customers, and I think a lot of developers may say they'll choose to use an agency, but we found that in many cases, they don't represent us 100% the way we want to represent ourselves to the customer. We definitely work with agencies and we're happy to… but don't put too much faith or too much expectancy on outsourcing that function, there will probably be some functions you need to keep in house,” concluded Naramore.