The year is coming to an end, and it has proven to be golden for Cambodia and investors in the construction and real estate sectors. Simultaneously, we are looking forward to 2018 to see if there will be any changes. Oknha Rithy Sear, chairman of the board of World Bridge Group, spoke with Post Property reporter Meng Siv about the coming year.
2017 is coming to an end. Can you tell us about the state of the real estate sector?
If we compare the situation of investments in the real estate market in 2017 and 2016, we see that in 2016, investment came from foreigners. However in 2017, the Chinese have taken over as the figure in Cambodia, which has a higher percentage than the rest, especially concerning investment in Sihanoukville and Koh Kong. To sum up, the investments made in 2016 and 2017 are similar. There was no decrease.
2018 is approaching, so what is your vision for the future?
When looking forward to 2018, we have to look at two things. For the locals, the market will stagnate as we are getting close to the National Election, and therefore they might have different perspectives. They are not afraid, but they pause during the period. This is not the case for foreign investors. They will continue to invest because foreign investors don’t take the election factor seriously as they can foresee the post-election situation and that the economy will continue to grow sustainably.
Foreign investors are the ones investing in Cambodia. They invest with low capital. For example, they buy the same size condo units in Cambodia at $200,000. However, a condo with the same size unit in other countries or neighbouring countries would cost around $400,000 or about $1 million. This means they invest a lower capital.
We want these kinds of investments as it is like betting on a football match. “Chak Kao Ov”. Because they see our country’s political stability and the sustainable growth of the economy. That is why they are not afraid to invest from $200,000 to $300,000 in Cambodia due to our political stability and good economic growth. The success factor is economic growth.
Is the condo market looking positive for the coming year?
The condo market still has potential. It is just that the developers need to study to distinguish who their potential market is. If they don’t study clearly, they will face issues and the market will die. However, in general, this sector is not affected. Therefore, we need to know what the Chinese, the Japanese, the Singaporeans or the Hong Kongers desire. We need to study this clearly. If we target all kinds of customers, then how do we plan to get them all?
Developers must be smart when it comes to this. However, if we are not smart and affect ourselves and the real estate market is facing problems, then that is not how it works. All in all, 2018 won’t be a problematic period, although things will be stagnant. However, it won’t go down. The situation will be similar to what happened in 2016 and 2017.
What is your perspective on the incoming flow of foreign direct investment in a multitude of sectors?
If we talk about this point, we need to talk about the current incoming flow of direct capital investment as it is already the end of the year. My thoughts for 2018 are that we will not be affected. For example, if I am an investor and I want to invest in a country, I must already have a plan prepared. If I want to invest in Cambodia, I must already have a plan and budget ready for it. Therefore, if I don’t come to invest, I will be the one that loses.
Political issues seem to have intensified. Do you think the stable society will face any trouble?
They should be able to understand that the election is marching forward, and there is nothing to worry about. We can understand if there is a punishment of closing the export gate to Europe. It is one thing. However, that won’t happen. Also, not everyone opens a factory. There are many other businesses and they are different.
If we talk about ordering products from Cambodia for the next year, orders have been made and arranged already. Therefore, I think 2018 won’t be a problem.
Will the trend of real estate investment face changes?
The trends of real estate investment go up, stagnate and stagnate. I always say that, within a period of 5-8 years, there will be a construction period. If we look back to 2018, some projects have been delayed while others were launched on to the market and reconstructed. This is the cycle of the real estate sector. This is the normal trend of the sector. It’s just that the developers need to convert their market from condos to Boreys or vice versa depending on the market demand.
Concerning your projects, The Peak and The Bridge, what is the current progress?
By today, 60 percent of the Peak has been sold and it is expected to be completed by 2020. However, my projects normally finish before schedule. The Bridge was finished before schedule and this project will open units to the owners with its own supermarket early in 2018.